As filed with the Securities and Exchange Commission on ~~June 4~~April 29, ~~2002~~ 2015

Registration No. 333-

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

~~Form~~ FORM S-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

~~Beagle~~Alion ~~Holdings,~~Science ~~Inc.~~ and Technology Corporation

(Exact ~~Name~~name of ~~Registrant~~registrant as ~~Specified~~specified in its ~~Charter~~ charter)

Delaware	~~8731~~8711	54-2061691
(State or Other Jurisdiction of Incorporation or Organization)	(Primary Standard Industrial Classification Code Number)	(I.R.S. Employer Identification Number)
(State or other jurisdiction of incorporation or organization)	(Primary standard industrial classification code number)	(I.R.S. employer identification number)

10 West 35th Street Chicago, IL 60616 (312) 567-4000 1750 Tysons Boulevard Suite 1300 McLean, VA 22101 (703) 918-4480

(Address, including Zip Code and Telephone Number,

including Area Code of Registrant’s Principal Executive Offices)

Stephen Trichka

Beagle Holdings, Inc.

1750 Tysons Boulevard

Suite 1300

McLean, Virginia VA 22102

(703) 918-4480

(~~Name,~~ Address, including ~~Zip~~zip ~~Code~~code, and ~~Telephone~~ ~~Number~~telephone number, including area code, of registrant’s principal executive offices)

~~including~~Bahman ~~Area~~Atefi ~~Code, of Agent for Service)~~

President, Chairman and Chief Executive Officer

Alion Science and Technology Corporation

1750 Tysons Boulevard

Suite 1300

McLean, Virginia 22102

(703) 918-4480

(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copies to:

Kevin T. Boyle, Esq. Alion Science and Technology Corporation 1750 Tysons Boulevard Suite 1300 McLean, Virginia 22102 (703) 918-4480 Stuart H. Gelfond, Esq. Joshua Wechsler, Esq. Fried, Frank, Harris, Shriver & Jacobson LLP One New York Plaza New York, New York 10004 (212) 859-8000 Marc RD. ~~Paul~~ Jaffe, Esq. Senet S. Bischoff, Esq. Latham & Watkins LLP 885 Third Avenue New York, New York 10022 (212) 906-1200

~~Baker~~Approximate &date ~~McKenzie~~of commencement of proposed sale to the public: As soon as practicable after the effective date of this registration statement.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 ~~815~~under ~~Connecticut~~the ~~Avenue,~~Securities NAct of 1933 check the following box.W. ¨

If this Form is ~~Washington~~filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, DCplease ~~20006~~check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

~~Approximate~~If ~~date~~this ofForm ~~commencement~~is ofa ~~proposed sale~~post-effective amendment filed pursuant to Rule 462(c) under the ~~public:~~Securities ~~From~~Act, ~~time~~check tothe ~~time after~~following ~~this~~box ~~Registration~~and ~~Statement~~list ~~becomes~~the ~~effective~~Securities ~~and~~Act ~~after closing~~registration statement number of the ~~proposed~~earlier ~~acquisition~~effective ~~described~~registration instatement ~~this Registration~~for ~~Statement.~~the same offering. ¨

If ~~the~~this ~~only~~Form ~~securities~~is ~~being~~a ~~registered~~post-effective onamendment ~~this Form~~filed ~~are being offered~~ pursuant to ~~dividend~~Rule 462(d) orunder ~~interest reinvestment~~the ~~plans~~Securities Act, ~~please~~ check the following box~~: o~~ and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

IfIndicate ~~any~~by ofcheck ~~the~~mark ~~securities~~whether ~~being~~the ~~registered~~registrant onis ~~this Form~~a ~~are~~large toaccelerated befiler, ~~offered~~an onaccelerated filer, a ~~delayed~~non-accelerated filer, or ~~continuous~~a ~~basis pursuant~~smaller toreporting ~~Rule 415~~company. ~~under~~See the ~~Securities~~definitions ~~Act~~ of ~~1933,~~“large ~~other~~accelerated ~~than securities~~filer,” ~~offered~~“accelerated ~~only~~filer” inand ~~connection~~“smaller ~~with~~reporting ~~dividend~~company” orin ~~interest reinvestment~~Rule ~~plans,~~12b-2 ~~check~~of the ~~following box~~Exchange Act. þ (Check one):

IfLarge ~~this~~Accelerated ~~Form~~Filer is¨ ~~filed~~Accelerated tofiler ~~register~~¨ ~~additional securities~~Non-accelerated ~~for~~filer anx ~~offering pursuant to Rule 462~~(b)Do ~~under the~~not ~~Securities Act, please~~ check ~~the~~if ~~following~~a ~~box~~smaller ~~and~~reporting ~~list~~company) ~~the Securities~~Smaller ~~Act~~reporting ~~registration~~company ~~statement number of the earlier effective registration statement for the same offering. o~~ ¨

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. o

If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. o

CALCULATION OF REGISTRATION FEE

		Proposed Maximum	Proposed Maximum	Amount of
Title of Each Class of Securities to be Registered	Proposed MaximumAggregate Offering Price(1)(2)	Amount of Registration Fee
Title of each Class of	Amount to be	Offering Price	Aggregate	Registration
Common Stock, $0.0001 par value per share	$100,000,000	$11,620
Securities to be Registered	Registered	Per Unit	Offering Price(3)	Fee
Common Stock (1)	7,500,000(2)	$10.00	$75,000,000	$6,900.00

(1)	Pursuant to Rule 416(c) of the Securities Act of 1933, as amended, this registration statement also covers an indeterminate number of plan interests to be offered and sold pursuant to The Beagle Holdings, Inc. Employee Ownership, Savings and Investment Plan. In accordance with Rule 457, no separate fee is required with respect to the plan interests.
(2)	Represents shares of our common stock to be issued to the employee stock ownership plan, or ESOP, component of The Beagle Holdings, Inc. Employee Ownership, Savings and Investment Plan. The number of shares of common stock being registered is based on the estimated aggregate funds to be invested by the ESOP trustee in our common stock over the next two years.
(3)	Estimated solely for the purpose of calculating the registration fee.

(1)	Includes offering price of shares of common stock which the underwriters have the option to purchase.

~~The~~(2) ~~registrant~~Estimated ~~hereby~~solely ~~amends~~for ~~this~~the ~~registration statement~~purpose onof ~~such~~calculating ~~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~~fee ~~thereafter~~pursuant ~~become~~to ~~effective~~Rule ~~in accordance with Section 8~~457(ao) of the Securities Act of 1933, as amended~~, or until the registration statement shall become effective on such date as the SEC, acting pursuant to said Section 8(a), may determine~~.

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, as amended, or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

The information in this preliminary prospectus is not complete and may be changed. WeThese securities may not ~~sell~~be ~~these~~sold ~~securities~~ until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell ~~these~~nor ~~securities~~does ~~and~~it isseek ~~not soliciting~~ an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

Subject to Completion. ~~completion,~~Dated ~~preliminary~~April ~~prospectus dated~~ 29, ~~2002~~ 2015.

~~Common~~ Shares ~~Stock of Beagle Holdings, Inc.~~

LOGO

Alion Science and Technology Corporation

~~Offering~~Common ofStock ~~Interests~~

This is our initial public in offering. We are offering shares of common stock.

~~The~~Prior ~~Beagle~~to ~~Holdings~~this offering, ~~Inc~~there has been no public market for the common stock. ~~Employee~~It ~~Ownership,~~is currently estimated that the initial public offering price per share ~~Savings~~will be between $ and ~~Investment~~$ . ~~Plan~~We intend to list the common stock on under the symbol “ ”.

We are ~~distributing~~an ~~this~~“emerging ~~prospectus~~growth tocompany” ~~the employees~~and ofwe ~~IIT~~are ~~Research~~eligible ~~Institute~~for, ~~and~~but ~~Human~~have ~~Factors Applications,~~not ~~Inc.~~elected to ~~raise~~adopt atin ~~least~~this ~~$30.0 million~~prospectus, ~~and~~reduced upreporting requirements. toSee a“Prospectus ~~maximum~~Summary—Implications ~~offering~~of ~~amount~~Being ~~of $l million~~an Emerging Growth Company”.

See “Risk WeFactors” ~~are~~on ~~making~~page ~~eligible~~17 ~~employees an offer~~ to ~~acquire~~ aread ~~beneficial~~about ~~interest in~~ the ~~common~~factors ~~stock~~you ofshould ~~the newly-formed~~consider ~~Beagle~~before ~~Holdings,~~buying ~~Inc.,~~shares ~~or Newtek, by directing the investment~~ of ~~their eligible retirement account balances in~~ the ~~employee~~ stock ownership plan, or ESOP, component of the Beagle Holdings, Inc. Employee Ownership, Savings and Investment Plan, which we refer to as the KSOP. Employees who accept this offer and invest in the ESOP component will be making what we refer to as the “one-time ESOP investment election.” After the acquisition is completed, existing employees will not have another opportunity to rollover or transfer any retirement plan account balances to the ESOP component for investment in Newtek common stock.

WeNeither ~~are~~the ~~offering~~Securities and ~~interests~~Exchange inCommission ~~our~~nor ~~KSOP~~any toother ~~eligible employees~~regulatory ofbody ~~IITRI~~has ~~and~~approved ~~HFA~~or ~~who,~~disapproved ~~upon completion~~ of ~~our acquisition~~these ofsecurities ~~substantially~~or ~~all~~passed ofupon the ~~assets~~accuracy or adequacy of ~~IITRI,~~this ~~become employees~~prospectus. ofAny ~~Newtek~~representation orto ofthe ~~HFA~~contrary asis ~~Newtek’s~~a ~~subsidiary~~criminal offense.

~~The~~PerShare ~~proceeds~~Total ~~from~~Initial ~~this~~public offering ~~will~~price be$ ~~used~~$ ~~by the~~Underwriting ~~ESOP~~discount ~~trustee~~$ to$ ~~purchase~~Proceeds, ~~shares~~before ofexpenses, ~~Newtek~~to ~~common~~us ~~stock.~~ $ $

~~Newtek~~To ~~will~~the ~~apply~~extent that the ~~funds~~underwriters ~~received~~sell ~~from the~~more ~~sale~~than shares of ~~its~~ common stock, to the ~~ESOP~~underwriters tohave the ~~purchase~~option ~~price paid in our acquisition of IITRI’s assets. If eligible employees do not elect~~ to ~~direct~~purchase ~~the~~up ~~rollover or transfer of at least $30.0 million in eligible retirement account balances~~ to ~~the~~ ~~ESOP~~an ~~component~~additional shares ~~of Newtek’s KSOP, then we may finance~~from ~~the~~us ~~shortfall~~at in the ~~acquisition~~initial ~~purchase~~ price ~~from~~to ~~other sources, if available, or terminate this offering and~~ the ~~acquisition~~ ofpublic ~~IITRI’s~~less ~~assets. If~~ the ~~offering~~underwriting ~~and acquisition were to be terminated, your retirement account balances would remain untouched in IITRI’s and HFA’s retirement plans~~discount.

~~Neither~~The ~~our~~underwriters ~~common~~expect ~~stock nor our KSOP interests will be publicly traded. You will be able~~ to ~~sell~~deliver the ~~common stock~~shares ~~allocated~~against topayment ~~your~~in ~~ESOP~~New ~~account~~York, New ~~only~~York toon , ~~Newtek~~2015.

~~Your~~Credit ~~investment~~Suisse inJefferies ~~the~~Wells ~~ESOP~~Fargo ~~component involves risks. We urge you to read the “Risk Factors” section of this prospectus beginning on page 9 which describes risks associated with your investment.~~ Securities

~~Neither~~Prospectus ~~the SEC nor any state securities~~dated ~~commission~~ , ~~has approved or disapproved of these securities or determined if this prospectus is truthful or complete~~2015. ~~Any representation to the contrary is a criminal offense.~~

TheTable date of this prospectus is , 2002. Contents

TABLE OF CONTENTS

Qualitative and Quantitative Disclosure about Market Risk Revenue By Sponsor As of May 10, 2002 Properties Legal Proceedings Example of Company Retirement Plan Contribution Only: Example of Company Retirement Plan and Matching Contributions: The One-Time ESOP Investment Election Your Investment Options in the Non-ESOP Component Description of Our Common Stock and KSOP Interests Management Executive Compensation Certain Relationships and Related Transactions Where You Can Find More Information Legal Matters Experts Index to Financial Statements Independent Auditors’ Report BEAGLE HOLDINGS, INC. Balance Sheet As of March 15, 2002 SELECTED OPERATIONS OF IIT RESEARCH INSTITUTE Consolidated Statements of Changes in Owner’s Net Investment Selected Operations of IIT Research Institute Valuation and Qualifying Accounts For the years ended September 30, 1999, 2000 and 2001 (in thousands) PART II SIGNATURES Savings and Investment Plan Silverstein and Mullens Opinion Asset Purchase Agreement Bahman Atefi Retention Agreement Stacy Mendler Retention Agreement Randy Crawford Retention Agreement Barry Watson Retention Agreement Stephen Trichka Retention Agreement KPMG Consent


INDUSTRY AND MARKET DATA			i
TRADEMARKS			i
CERTAIN DEFINED TERMS			i
NON-GAAP FINANCIAL MEASURES AND OTHER FINANCIAL INFORMATION			iii
PROSPECTUS SUMMARY			1
RISK FACTORS			17
CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS			34
USE OF PROCEEDS			35
DIVIDEND POLICY			36
CAPITALIZATION			37
DILUTION			39
SELECTED CONSOLIDATED FINANCIAL DATA			41
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS			43
BUSINESS			78
MANAGEMENT			100
EXECUTIVE COMPENSATION			108
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS			122
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT			124
DESCRIPTION OF CERTAIN INDEBTEDNESS			126
DESCRIPTION OF CAPITAL STOCK			131
SHARES ELIGIBLE FOR FUTURE SALE			138
MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS			139
UNDERWRITING			143
LEGAL MATTERS			146
EXPERTS			146
WHERE YOU CAN FIND ADDITIONAL INFORMATION			146
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS			F-1

Through and including , 2015 (the 25th day after the date of this prospectus), all dealers that effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to a dealer’s obligation to deliver a prospectus when acting as an underwriter and with respect to an unsold allotment or subscription.

No dealer, salesperson or other person is authorized to give any information or to represent anything not contained in this prospectus or any free writing prospectus that we, or someone on our behalf, have prepared. Neither we nor any underwriter take responsibility for, or can provide assurance as to the reliability of, any other information that others may give you. This prospectus is an offer to sell only the shares that we are offering in this prospectus, but only under circumstances and in jurisdictions where it is lawful to do so. The information contained in this prospectus is current only as of its date.

~~Table~~INDUSTRY ofAND ~~Contents~~ MARKET DATA

Prospectus Summary			2
Risk Factors			9
		Risks Related to the Offering:	9
		Risks Related to the Acquisition of IITRI’s Assets:	13
		Risks Related to Our Business:	13
Special Note Regarding Forward-Looking Statements			20
S Corporation Status			21
The Acquisition			22
Description of Notes and Warrants			26
	Senior Credit Facility		26
	Mezzanine Note		28
	Subordinated Note		30
	Warrants		31
Use of Proceeds			34
Plan of Distribution			35
Distribution, or Dividend, Policy			35
Capitalization			36
Selected Financial Data			37
Unaudited Pro Forma Consolidated Financial Data			39
Management’s Discussion and Analysis of Financial Condition and Operating Results			44
	Overview		44
	Results of Operations		47
	Liquidity and Capital Resources		50
	Critical Accounting Policies and Estimates		53
Qualitative and Quantitative Disclosure about Market Risk			56
Business			57
	Overview		57
	Our Business Strategy		58
	Market Background		58
	Our Services		61
	Resources		64
	Promotional Activities		64
	Competition		65
	Our Sponsors		65
	Patents and Proprietary Information		65
	Culture, People and Recruiting		66
	Environmental Matters		66
Properties			67
Legal Proceedings			67
The Beagle Holdings, Inc. Employee Ownership, Savings and Investment Plan			68
	Introduction		68
	Eligibility and Enrollment		70
	Pre-Tax Deferrals and Rollovers to the KSOP		70

We obtained the industry, market and competitive position data used throughout this prospectus from our own research, surveys or studies conducted by third parties and industry or general publications. Industry publications and surveys generally state that they have obtained information from sources believed to be reliable, but do not guarantee the accuracy and completeness of such information. While we believe that each of these studies and publications is reliable, we have not independently verified such data. Similarly, we believe our internal research is reliable but it has not been verified by any independent sources.

TRADEMARKS

This prospectus contains registered and unregistered trademarks and service marks of Alion Science and Technology Corporation and its affiliates, as well as trademarks and service marks of third parties. All brand names, trademarks and service marks appearing in this prospectus are the property of their respective holders. The following terms which may be used in this prospectus are our trademarks and/or trade names: Alion and the Alion logo.

CERTAIN DEFINED TERMS

The following are definitions of certain key terms used throughout this prospectus:

•

“2010 Warrants” means the warrants issued by the Company on March 22, 2010 to holders of Secured Notes;

•

“2014 Refinancing” means the series of transactions that occurred on August 18, 2014, as described in the section entitled “Business – 2014 Refinancing”;

•

“2014 Warrants” means the warrants issued by the Company on August 18, 2014 to ASOF, Phoenix, and other holders of the Existing Third Lien Notes and the lenders under the Existing Second Lien Term Loan which, immediately prior to consummation of this offering and assuming consummation of the Transactions, will be exercised in full;

•

“ASOF” means ASOF II Investments, LLC;

•

“Company” means, unless the context requires otherwise, Alion Science and Technology Corporation, a Delaware corporation, and its subsidiaries on a consolidated basis;

•

“ESOP” means the Alion Science and Technology Corporation Employee Ownership, Savings and Investment Plan, as amended, which is sometimes referred to as the “Plan”, the “KSOP” or “Alion KSOP”;

•

“ESOP Trust” means the Alion Science and Technology Corporation Employee Ownership Savings and Investment Trust;

•

“Existing Credit Agreements” means the credit agreements entered into as part of the 2014 Refinancing governing the Existing First Lien Term Loan and the Existing Second Lien Term Loan, and the Existing Revolving Credit Facility, collectively;

•

“Existing Debt Instruments” means the Existing Credit Agreements and the indenture governing the Existing Third Lien Notes, collectively, entered into as part of the 2014 Refinancing;

•

“Existing First Lien Term Loan” means our first lien term loan in an initial aggregate principal amount of $285 million entered into as part of the 2014 Refinancing, which includes two tranches: Tranche A (in an initial aggregate principal amount of $110 million) and Tranche B (in an initial aggregate principal amount of $175 million);

	Company Contributions	73
	Investing In Your KSOP Account	76
	Valuation of Your Accounts and Your Statement	80
	Vesting	81
	Requesting A Distribution	82
	Loans	85
	Hardship Withdrawals	86
	Taxation of Distributions	87
	Other Important Facts	88
The One-Time ESOP Investment Election		91
	General	91
	Procedure for Making the One-Time ESOP Investment Election	95
	Closing of the Acquisition	97
	Your Role and Responsibilities as a Named Fiduciary under ERISA	98
	Role and Determination of the ESOP Trustee	99
	Opinion of Duff & Phelps	100
Your Investment Options in the Non-ESOP Component		101
Description of Our Common Stock and KSOP Interests		105
	Authorized Capital Stock and KSOP Interests	105
	Authorized but Unissued Shares	105
	Delaware Law and Certain Certificate of Incorporation and Bylaw Provisions	106
Management		108
	Information Regarding the Directors of the Registrant	108
	Compensation of Directors	109
	Information Regarding the Executive Officers of the Registrant	110
Executive Compensation		112
	Employment Agreements	113
	Retention Incentive Agreements	116
	Stock Appreciation Rights Plan	116
Certain Relationships and Related Transactions		117
Where You Can Find More Information		117
Legal Matters		117
Experts		117
Forecasted Financial Information		118
[Some Additional Information About ESOPs and the Newtek-IITRI Transaction			]
Index to Financial Statements		F-1

•

“Existing Revolving Credit Facility” means our $65 million (subject to borrowing base limitations) revolving credit facility entered into as part of the 2014 Refinancing, with Wells Fargo Bank, National Association, as administrative agent and the lenders party thereto;

•

“Existing Second Lien Term Loan” means our second lien credit agreement entered into as part of the 2014 Refinancing, in an initial aggregate principal amount of $70 million, with ASOF and JLP Credit Opportunity Master Fund Ltd., an affiliate of Phoenix, as lenders;

•

“Existing Third Lien Notes” means third lien notes (i) in initial aggregate principal amount of $208.1 million issued by the Company as part of the 2014 Refinancing, in exchange for approximately 90% of the Company’s Unsecured Notes, plus (ii) $2.9 million in aggregate principal amount issued for cash at a discount;

•

“Existing Warrants” means the 2010 Warrants and the 2014 Warrants;

•

“New Credit Agreement” means that new credit agreement or credit agreements the Company expects to enter into pursuant to the IPO Refinancing;

•

“Phoenix” means Phoenix Investment Adviser, LLC;

•

“Secured Notes” means the 12% Senior Secured Notes due 2014, which were refinanced in their entirety in 2014;

•

“Series A Preferred Stock” means shares of our outstanding Series A Preferred Stock, par value $0.01 per share, issued in August 2014, all of the outstanding shares of which, assuming the consummation of the Transactions, we expect will be eliminated in their entirety;

•

“Transactions” means (a) our initial public offering and (b) the refinancing, or the IPO Refinancing, in full of our currently outstanding debt, a portion of which we expect to refinance through committed financing and the remainder of which will be repaid in full with the proceeds of this offering;

•

“U.S. GAAP” means accounting principles generally accepted in the United States; and

•

“Unsecured Notes” means the 10.25% Senior Notes due 2015, which are no longer outstanding.

~~Prospectus~~NON-GAAP ~~Summary~~ FINANCIAL MEASURES AND OTHER FINANCIAL INFORMATION

~~This~~We ~~summary~~have ~~highlights~~included ~~information~~certain ~~contained elsewhere~~financial measures in this prospectus that are not recognized under U.S. ~~You~~GAAP, ~~should~~including ~~read~~earnings ~~the~~before ~~entire~~interest, ~~prospectus~~income ~~carefully~~taxes, ~~including~~depreciation and amortization, which we refer to as EBITDA, and Consolidated EBITDA, which is defined in the ~~“Risk~~Existing ~~Factors”~~Credit Agreements. We believe that the presentation of EBITDA and Consolidated EBITDA enhances an investor’s ~~section~~understanding ~~beginning~~of onour ~~page 9~~financial performance. We believe EBITDA is useful in assessing operating performance and in comparing our ~~consolidated~~performance to other companies in the same industry. EBITDA is a common financial metric in the government contracting ~~statements~~industry, in part because it excludes from performance the effects of a company’s capital structure, in particular taxes and ~~notes~~interest. ~~thereto~~In addition, ~~before~~we ~~making~~believe anConsolidated ~~investment~~EBITDA can be useful in evaluating our ability to meet our debt ~~decision~~covenants. Consolidated EBITDA information for the trailing four-quarters is used by management and is important to our security holders as our Existing Credit Agreements require that we achieve minimum trailing four-quarter Consolidated EBITDA levels and maintain a minimum one-to-one fixed charge coverage ratio, which is also measured on a trailing four-quarter basis at the end of each quarter. EBITDA and Consolidated EBITDA are not measures under U.S. GAAP and our use of the terms EBITDA and Consolidated EBITDA varies from others in our industry. EBITDA and Consolidated EBITDA should not be considered as alternatives to net income (loss), operating income or any other performance measures derived in accordance with U.S. GAAP, as measures of operating performance or operating cash flows or as measures of liquidity.

~~Because~~EBITDA weand ~~will~~Consolidated ~~acquire~~EBITDA ~~substantially~~have ~~all of~~material ~~IITRI’s~~limitations ~~assets in the acquisition, in this prospectus we refer to IITRI on a historical basis~~ as ~~“our”~~analytical ~~company. These~~tools ~~historical~~and ~~references~~you doshould not ~~include~~consider ~~discussion~~them ~~of IITRI’s~~in ~~Life~~isolation ~~Sciences~~or ~~Operation,~~as ~~which~~substitutes isfor ~~the~~analysis ~~only business unit~~ of ~~IITRI~~our ~~that~~results weas ~~will~~reported ~~not~~under ~~acquire in the acquisition~~U. ~~References~~S. ~~in this prospectus to “we,” “us” and “our” refer to IITRI in its present form including its subsidiary, Human Factors Applications, Inc~~GAAP., ~~but~~For ~~excluding the Life Sciences Operation~~example, orEBITDA ~~to Newtek following the acquisition, as the context indicates. References to Newtek after the acquisition refer to Newtek~~ and ~~its~~Consolidated ~~subsidiary,~~EBITDA: ~~HFA, and references to Newtek employees include employees of HFA.~~

~~Beagle~~• ~~Holdings,~~do ~~Inc.,~~not orreflect ~~Newtek~~ any cash capital expenditure requirements for assets being depreciated and amortized that may have to be replaced in the future;

~~Newtek~~• ~~was~~do ~~organized on October 10, 2001, as a for-profit Delaware corporation for the purpose of purchasing substantially all of the assets of IITRI, a~~ not~~-for-profit Illinois~~ ~~corporation,~~reflect inchanges an acquisition which will be completed promptly after completion of this offering of KSOP interests. Proceeds from the offering will be used by the ESOP trustee to purchase shares of our common stock. We will then use the funds we receive from the sale of our common stock, together with other funds described elsewhere in ~~this prospectus~~, toor ~~purchase IITRI’s~~cash ~~assets,~~requirements ~~except~~ for ~~those related to its Life Sciences Operation. The acquired assets will include the stock of Human Factors Applications~~, ~~Inc.,~~our ~~which we refer to as HFA. Upon completion of the acquisition, we will offer employment to all IITRI employees at that time, except those~~ working ~~exclusively~~ ~~for~~capital ~~and~~needs; ~~in support of the Life Sciences Operation. HFA employees will continue to be employed by HFA, which will become a subsidiary of Newtek upon completion of the acquisition.~~ and

~~Since~~• ~~Newtek~~do ~~was~~not ~~formed,~~reflect ~~our~~the ~~activities~~significant ~~have~~interest ~~been primarily organizational. All of Newtek’s currently outstanding capital stock~~expense, ~~consisting~~or ~~of 100 shares of common stock, is owned by~~ the ~~ESOP~~cash ~~component~~requirements ofnecessary ~~our KSOP. The offering of KSOP interests will allow employees~~ to ~~establish~~service ~~ownership~~interest ~~of Newtek~~or ~~through~~principal ~~investing in our ESOP component. After the offering is completed the ESOP component will own 100 percent of Newtek’s outstanding common stock~~payments, ~~although,~~ ason ~~part of the purchase price paid in the acquisition, IITRI will have warrants to purchase up to 40 percent of~~ our ~~common stock at $l per share~~debt.

~~Newtek’s~~In ~~principal~~addition, ~~executive~~Consolidated ~~offices~~EBITDA, ~~are located~~as atdefined 10in ~~West~~the ~~35th~~Existing ~~Street,~~Credit ~~Chicago~~Agreements, ILreflects ~~60616~~the ~~with~~cash aimpact relating to the Company’s ESOP ~~telephone~~and ~~number~~other oflong-term incentive plans (~~312) 567~~by adding back non-~~4000~~cash items and atsubtracting ~~1750~~cash ~~Tysons Boulevard,~~items ~~Suite 1300,~~that ~~McLean,~~had VAbeen ~~22102~~previously ~~with~~included ain ~~telephone number~~Consolidated ofEBITDA ~~(703~~in prior periods), ~~918-4480~~while EBITDA does not reflect such adjustments.

~~IIT~~Numbers ~~Research~~and ~~Institute,~~percentages orpresented ~~IITRI~~ in the tables in this prospectus may not sum to the totals presented due to rounding.

~~IITRI,~~iii is a not-for-profit corporation organized in 1936 and controlled by the Illinois Institute of Technology. IITRI’s activities include the research and development of technological solutions to problems relating to public health, safety and national defense. IITRI is primarily a government contractor, providing research services mainly to agencies of the federal government, with the U.S. Department of Defense being its largest sponsor. IITRI also provides research services to departments of state and local governments, foreign governments, and commercial sponsors. Applying its scientific and engineering expertise, IITRI offers services to its sponsors in the following core research fields:

•Table wirelessof communications, • defense operations, • information technology, • industrial technology, • chemical, environmental and biodefense technologies,Contents

PROSPECTUS SUMMARY

This summary highlights selected information contained elsewhere in this prospectus, but is not complete and may not contain all of the information that is important to you or that you should consider before making an investment decision. To understand all of the terms of this offering and to attain a more complete understanding of our business and financial situation, you should read the entire prospectus carefully, including the “Risk Factors” section and the financial statements and related notes contained elsewhere in this prospectus.

Our Company

We are a leading provider of engineering solutions and services to the Federal Government for national defense, security and other critical government areas. Founded in 1936 as the Illinois Institute of Technology Research Institute, or IITRI, Alion and its highly skilled and educated employees have consistently been at the forefront of originating, developing and applying innovative scientific, engineering, technology and research and development solutions to our customers’ most complex challenges. Based in McLean, Virginia, we operate in three core business areas:

•

Naval Architecture and Marine Engineering core business area, in which we provide technical expertise for ship and systems design as well as acquisition and production supervision, testing, delivery and engineering support to naval and commercial markets, both domestically and internationally.

•

Systems Analysis, Design and Engineering core business area, in which we provide services and technologies designed to enhance the performance and safety of complex systems and reduce costs.

•

Modeling, Simulation, Training and Analysis core business area, in which we leverage our proprietary software, services and technologies to improve mission effectiveness and readiness through the cost effective application of virtual training.

A significant focus of our solutions and services is our agile engineering work, almost all of which is currently conducted in our systems analysis, design and engineering core business area. Agile engineering is the design, rapid prototyping, testing and limited production of systems and components. This is a substantial and growing part of our business. Within our agile engineering service we provide a broad range of solutions that respond directly to product line managers’ needs, usually on a time-critical basis. Our ability to progressively design, prototype, test and field solutions to emergent problems in close collaboration with (and often embedded in) customer teams results in effective, affordable and timely solutions. We believe our ability to combine traditional services with technological and engineering expertise in a time-critical, cost-efficient manner sets us apart in our industry.

Our solutions and services span the full lifecycle of key programs and provide us with long-standing, entrenched relationships with our customers. The long-term nature of our service offering also allows us to expand our footprint on existing programs and to use our capabilities and relationships to capture new growth opportunities. For fiscal year 2014, which ended on September 30, 2014, we generated revenue of $804.8 million, $68.0 million in Consolidated EBITDA and reported a net loss of $44.0 million. For the three months ended December 31, 2014 and 2013, we generated revenue of $227.9 million and $185.4 million, respectively, $19.2 million and $14.9 million in Consolidated EBITDA, respectively, and reported a net loss of $9.9 million and $18.5 million, respectively. This represents an increase in revenue and Consolidated EBITDA of 22.9% and 28.9%, respectively, and a decrease in net loss of 46.5%. For a discussion of our use of Consolidated EBITDA and a reconciliation to net loss, please refer to “– Summary Historical Consolidated Financial Data”.

We provide high-end research and development capabilities, technical expertise and operational support to a diverse group of U.S. government customers and, to a lesser degree, commercial and international customers. We serve customers in all branches of the U.S. military, a number of Cabinet-level U.S. government agencies, state and foreign governments and commercial customers. As of December 31, 2014, we had more than 200 distinct

customers and over 500 active contracts. For calendar year 2014, U.S. Department of Defense, or DoD, customers represented 93.8% of our revenue and other civilian agencies and commercial customers accounted for 6.2% of our revenue.

As illustrated in the diagram below, our value proposition is based on the strength of our customer relationships, combined with the quality, depth and skills of our people. This blend of capability and experience enables us to provide innovative and cost-efficient solutions to our customers’ most pressing problems. Our relentless focus on client-centric innovation is rooted in our heritage as a spin-out of IITRI and the passion and commitment of our highly educated workforce. Our business model is built upon a foundation of high-visibility, long-term programs with our long-standing customers, enabling us to continuously expand our presence into high-growth areas, both by responding to our customers’ identified needs as well as current or future challenges that we identify and work to solve for our customers.

LOGO

We further attribute our growth to being well-aligned with priorities in the Navy, the Army, the Air Force and other DoD customers, which accounted for 54.7%, 16.0%, 15.2% and 8.0%, respectively, of our calendar year 2014 revenues. The overwhelming majority of our revenues are funded by the DoD base budget. Of our calendar year 2014 revenue, 93.7% was generated from cost reimbursable and time and material contracts, which carry lower risk, are more predictable and provide greater revenue visibility than fixed price contracts. With over 88% of our calendar year 2014 revenue generated as a prime contractor, we have direct relationships that provide deep insight into our customers’ priorities.

•The ~~explosive~~following ~~science,~~charts show our revenue by core business area and •contract ~~transport~~type ~~systems.~~for the 2014 calendar year:

LOGO

Our innovative technology solutions in all of our core business areas are supported by our skilled employee ~~The~~base, ~~Acquisition~~which includes engineers, scientists, analysts and former military personnel. As of December 31, 2014, approximately 80% of our employees had security clearances, with approximately 30% of our employees holding clearances at the Top Secret level or above, allowing us access to highly classified DoD information systems and networks. Our workforce is highly educated with approximately 30% of degreed employees having PhDs or Masters degrees, 75% of which are in Engineering, Science or Math / Computer Science. To enhance our technology solutions, we have over 100,000 square feet of laboratory facilities, which we use to conduct customer-funded research and development activities, and to a lesser degree, internally-funded research and development activities.

IfWe wehave ~~are~~a ~~able~~long tooperating ~~raise~~history atof ~~least $30.0 million~~providing ~~from~~a ~~investments~~broad inrange ~~the ESOP component through the sale~~ of ~~KSOP interests~~engineering-based solutions, ~~these~~from ~~funds~~requirements ~~will~~development beto ~~used by~~ the ~~ESOP~~actual ~~trustee~~implementation, tomaintenance ~~purchase~~and ~~Newtek~~upgrading ~~common~~of ~~stock~~systems. ~~Newtek~~We ~~will then~~have ~~use~~supported the ~~funds~~Information itAnalysis ~~receives~~Centers ~~from~~for the ~~sale~~Defense ofTechnical ~~its~~Information ~~common stock,~~Center ~~together~~for ~~with~~over ~~other~~45 ~~sources~~years ofand ~~financing,~~have tobeen ~~purchase~~providing ~~IITRI’s~~the ~~assets,~~U.S. ~~except~~Navy ~~for~~with ~~its~~naval ~~Life~~architecture ~~Sciences~~and ~~Operation.~~marine ~~The aggregate~~engineering ~~purchase~~support ~~price~~for weover ~~will~~55 ~~pay~~years. ~~IITRI~~Illustrative ~~for~~examples ~~its~~of ~~assets~~our ~~is made~~engineering upand oftechnology solutions include:

• a $56.0 million cash component, which consists of
	— $30.0 million from the sale of our common stock to the ESOP;	$	30.0 million
	— $26.0 million in proceeds from a loan to Newtek arranged by LaSalle Bank National Association;	$	26.0 million
• a $63.1 million debt component, which consists of
	— issuance of a promissory note, the mezzanine note, by Newtek to IITRI with a face value of $21.2 million;	$	21.2 million
	— issuance of a promissory note, the subordinated note, by Newtek to IITRI with a face value of $41.9 million;	$	41.9 million
• warrants to purchase up to 40 percent of our common stock;			Warrants
• the assumption by Newtek of IITRI’s outstanding bank debt which is projected to be approximately $11.0 million at closing;		$	11.0 million
• payment of up to $2.0 million for IITRI’s costs related to the acquisition.		$	2.0 million
		$	132.1 million	plus warrants plus assumption of additional liabilities

•

Alion provides agile engineering support for the modernization and upkeep of 146 Maritime Patrol and Reconnaissance Aircraft including multiple systems upgrades in the crew, electronics and radar systems.

~~Newtek~~• ~~will~~Alion ~~also~~is ~~assume~~the ~~IITRI’s~~prime ~~contingent contractual~~contractor ~~liabilities~~for tothe ~~AB Technologies~~in-service ~~related~~support toservices ~~an earnout~~that ~~arrangement,~~lead ~~which~~maintenance ~~will~~and ~~not~~upgrade ~~exceed~~management ~~$11.5 million,~~ for the Navy’s 158 surface combatant and itamphibious ~~will~~ships. ~~acquire~~We ~~all~~coordinate ~~deferred~~the ~~revenues~~maintenance ~~and~~periods ~~accounts receivable~~to ofensure ~~IITRI’s~~these ~~Life~~combatants ~~Sciences~~are ~~Operation~~available to support operational needs.

~~The~~• ~~purchase~~Alion ~~price~~provides ~~will~~agile beengineering ~~increased~~and byin-service ~~the amount~~support ofto the ~~deferred~~U.S. ~~revenues,~~Army ~~the~~to ~~accrued~~upgrade ~~payroll expenses~~ and ~~the~~maintain ~~accounts~~over ~~payable~~200 ofground-based ~~IITRI’s~~mobile ~~Life~~surveillance ~~Sciences Operation at the closing date~~systems. ~~Such~~Our ~~additional~~work ~~purchase~~integrated ~~price~~multiple ~~shall~~technologies ~~be paid~~and byupgrades ~~transferring accounts receivable of IITRI’s Life Sciences Operation~~ to ~~IITRI.~~extend Iftheir ~~the~~service ~~additional~~life ~~purchase~~and ~~price exceeds~~enhance ~~the~~system ~~accounts receivable of IITRI’s Life Sciences Operation, the excess amount shall be paid in cash to IITRI~~effectiveness.

If the acquisition closes after October 15, 2002, the purchase price will be increased by 75 percent of the net income earned by IITRI’s business, excluding its Life Sciences Operation, from October 1, 2002, to the closing date of the acquisition. We will pay this addition to the purchase price in cash.

If we do not raise at least $30.0 million from investments in the ESOP component, we may not be able to proceed with the acquisition. If this happens you will continue to be employed by IITRI or HFA, as the case may be, and your retirement plan account balances will remain untouched in IITRI’s or HFA’s existing plans. If, on the other hand, employees elect to invest more than $30.0 million, up to a maximum offering amount of $l million, in the ESOP component then all such additional funds will be used by the ESOP to purchase additional shares of our common stock. We may, in turn, use some or all of the additional funds we receive from the sale of our common stock to the ESOP for working capital

~~and~~• ~~general~~Alion ~~corporate~~is ~~purposes~~the ~~unless~~prime ~~IITRI permits~~contractor usproviding todesign, ~~contribute~~production, ~~some~~and orin-service support across all of ~~these additional funds to~~ the ~~cash~~Navy’s ~~component~~submarine ofclasses for the ~~acquisition~~Program ~~purchase~~Executive ~~price~~Officer Submarines. ~~This will~~Our ~~give~~work usspans ~~the~~design ~~option~~engineering, tosystems ~~decrease~~integration, ~~the~~logistics, ~~amount~~production wesupport, ~~will~~training, ~~owe~~and ~~IITRI under~~in-service support across the ~~subordinated~~70 ~~note.~~in-service Wesubmarines, ~~would~~six ~~only~~currently dounder ~~this~~construction, ifand wethe ~~could agree~~ongoing ~~with~~design ~~IITRI~~of onthe aOhio ~~mutually~~Replacement ~~acceptable~~Ballistic ~~price~~Missile Submarine Program.

~~Upon~~• ~~completion~~Alion ofis the ~~acquisition,~~prime wecontractor ~~expect that~~responsible ~~Newtek~~for ~~will~~the bedesign, ~~treated~~development, asintegration, antest Sand ~~corporation~~operation ~~for~~of ~~federal income~~the ~~tax~~Navy ~~purposes.~~Continuous WeTraining ~~expect~~Environment, ~~that~~or ~~this~~NCTE. ~~tax~~The ~~treatment~~NCTE ~~will result~~integrates insimulation ~~corporate tax savings~~ and ~~enhanced~~stimulation ~~cash~~systems ~~flow~~into ~~that Newtek would not have if it were~~ a Csingle ~~corporation.~~environment, ~~Because~~which ~~IITRI is~~enables ~~also~~Navy apersonnel ~~not-for-profit~~to ~~entity~~train and ~~therefore~~experiment ~~also~~in ~~not~~virtual ~~subject to~~worldwide ~~federal~~locations ~~income~~with ~~tax~~realistic weapons, ~~Newtek’s~~communications, ~~S corporation~~command ~~status will~~and ~~not~~control ~~result~~systems inoperations, ~~tax~~and ~~savings for Newtek as compared to IITRI~~interactions.

~~The~~• ~~KSOP~~Alion is the developer of the Mobile Technology and ~~Your~~Repair ~~Investment Decision~~ Complex for the Special Operations Forces, or SOF. These systems allow SOF to repair, modernize and fabricate equipment and material to execute a broad range of responsive engineering operations that address SOF-specific requirements and improve the effectiveness of deployed SOF mission capabilities in austere environments.

~~Our~~The ~~KSOP~~Market isOpportunity a qualified retirement plan and is comprised of an ESOP component and a non-ESOP component. If you invest in the ESOP component, you indirectly invest in Newtek common stock. If you invest in the non-ESOP component, you are investing, at your direction, in any of a number of mutual funds offered by Fidelity Investments.

~~Eligible Employees:~~For WeU.S. ~~are~~government ~~making~~fiscal ~~eligible employees~~year 2015, ~~acting as “named fiduciaries” under~~ the ~~federal~~ ~~Employee~~approved ~~Retirement~~DoD ~~Income~~appropriations ~~and~~totaled ~~Security~~$560 ~~Act~~billion. ofOf ~~1974~~that amount, ~~which~~ we$496 ~~refer~~billion towas asfor ~~ERISA,~~the anbase budget ~~offer~~and tothe ~~acquire~~remainder awas ~~beneficial interest~~for inwhat ~~our~~are ~~common~~termed ~~stock,~~overseas bycontingency ~~giving~~operations. ~~them~~While the ~~opportunity~~Budget ~~to direct~~Control ~~the~~Act ~~investment~~ of ~~their~~2011 ~~eligible~~is ~~IITRI~~still ~~or HFA retirement account balances~~ in ~~the~~effect, ~~ESOP~~lawmakers ~~component~~have ofmade ~~Newtek’s~~efforts ~~KSOP, where~~over itthe ~~will~~past beseveral ~~invested~~years into ~~our~~protect ~~common stock~~U.S. Wedefense ~~refer~~appropriations, toincluding ~~their~~the ~~decision~~Ryan-Murray toAgreement ~~accept this offer~~ and ~~to invest in~~ the ~~ESOP component~~Bipartisan asBudget ~~the~~Act ~~one-time~~of ~~ESOP investment election~~2013. ~~After completion~~We ofbelieve ~~the~~that ~~acquisition,~~these ~~existing~~efforts ~~employees~~ will ~~not~~continue ~~have another opportunity~~ to ~~invest~~stabilize inactual ~~our~~budget ~~common stock by electing to direct the rollover or transfer of their retirement plan account balances to the ESOP component of the KSOP~~allocations.

LOGO

~~You~~Note: ~~are~~FY’08 ~~eligible~~through toFY’15 ~~participate~~represents inactuals. FY’16 through FY’20 represents the ~~one-time~~President’s FY20l6 ~~ESOP~~Budget ~~investment~~request ~~election~~and ifforecast ~~you~~ as submitted to Congress in February 2015.

•Source: ~~are~~Department ~~employed by IITRI or HFA on the date we distribute the final prospectus; • are a legal resident~~ of ~~the~~Defense ~~U.S.;~~FY2016 • are a participant in IITRI’s Employee Pension Plan, IITRI’s Employee Tax Sheltered Annuity Plan, or HFA’s Profit Sharing & 401(k) plan on the first day of the one-time ESOP investment election period; and • are an employee of either IITRI or HFA on the closing date, which we expect to be on or about September 9, 2002Budget.

IfThe ~~for~~overwhelming ~~any~~majority ~~reason~~of ~~you~~Alion’s ~~are~~work noand ~~longer~~services ~~employed~~are ~~by IITRI~~performed orwithin ~~HFA after you make~~ the ~~one-time~~DoD’s ~~ESOP~~base ~~investment election,~~budget ~~but~~and ~~before~~in ~~closing~~many ofcases ~~the~~focus ~~acquisition,~~on upgrading ~~your~~or ~~one-time ESOP~~optimizing ~~investment~~existing ~~election~~programs ~~will~~and beplatforms ~~deemed~~efficiently ~~void~~and cost-effectively.

Eligible Funds: The balances from which eligible participants may rollover or transfer funds are:

• IITRI’s Employee Pension Plan, which we refer to as the IITRI 401(a) plan; • IITRI’s Employee Tax Sheltered Annuity Plan, which we refer to as the IITRI 403(b) plan; and • HFA’s Profit Sharing & 401(k) Plan, which we refer to as the HFA 401(k) plan.

If you wish to invest qualified plan monies that are not currently in the IITRI or HFA plans, you must roll these funds into the IITRI or HFA plans prior to the end of the one-time ESOP investment election period in order for them to be eligible.

Role of the ESOP Trustee: Proceeds from this offering will be used by the ESOP trustee to purchase Newtek common stock. We will then use the funds we receive from the sale of our common stock to the ESOP to acquire substantially all of IITRI’s assets. As a condition to the ESOP trustee’s purchase of our common stock, the trustee must receive a written opinion from its financial advisor, Duff & Phelps LLC.

~~The~~Alion ~~opinion~~growth ofopportunities ~~Duff~~are &well-aligned ~~Phelps~~with ~~will,~~U.S. ifdefense priorities. As ~~rendered~~illustrated in the chart below, ~~state~~Alion ~~that~~maintains ~~the~~a ~~purchase~~strong ~~price~~alignment ~~the~~with ~~trustee~~U.S. ~~will~~defense ~~pay~~priorities. ~~for our~~The ~~common~~DoD’s ~~stock~~emphasis on an increased presence in the Asia-Pacific region is ~~not~~aligned ~~more~~with ~~than~~our ~~fair~~work ~~market~~supporting ~~value~~the ~~and~~DDG-51 ~~that~~AEGIS Destroyer and the ~~terms~~Flight III design and ~~conditions~~integration of Ballistic Missile Defense and the ~~acquisition~~replacement ~~are~~fleet ~~fair~~oiler required to support the ~~ESOP~~Pacific region. DoD’s continuous investments to maintain technical superiority are aligned with our current engineering and ~~from~~technical awork ~~financial~~on ~~point~~critical ofprograms, ~~view~~including F-35 Lightning II and the Ohio Replacement Ballistic Missile Submarine Program. Most importantly, our competency in agile engineering and rapid prototyping align with the DoD’s ongoing investments in existing platforms to address obsolescence, integrate new systems, upgrade legacy systems, extend in-service lives, and improve operational performance.

LOGO

~~Your~~Attractive ~~Role~~addressable asmarket. ~~Named Fiduciary:~~We ~~You~~believe ~~are~~that the ~~named fiduciary~~total ~~under~~addressable ~~ERISA~~market for ~~your~~our ~~own~~three core ~~account.~~business ~~Fiduciaries~~areas ~~under ERISA~~is approximately $68 billion per annum, ~~including~~comprising ~~persons~~three ~~designated~~main asend ~~named~~customers: ~~fiduciaries~~(1) the DoD, ~~are required~~representing toapproximately ~~comply~~$55 ~~with~~billion, ~~ERISA.~~(2) the ~~State~~commercial/international ~~Street~~market, ~~Bank &~~representing approximately $7 billion and ~~Trust~~(3) the ~~Company~~federal ~~has~~civilian ~~been~~market, ~~appointed~~representing byapproximately $6 billion. Based on our ~~board~~size, our market share within each of ~~directors~~these ~~to serve~~three ascore ~~the~~areas ~~trustee~~is ~~for~~less ~~the~~than ~~ESOP~~3%, ~~trust~~with an overall market share of approximately 1%. ByWe ~~law,~~believe ~~State~~that ~~Street~~based on our ~~acts,~~ability into ~~this~~win ~~capacity,~~and retain business as anwell ~~independent~~as ~~fiduciary,~~expand ~~which~~our ~~means that~~footprint itwith ~~must~~constantly ~~act~~evolving ~~prudently~~products and ~~solely~~solutions, gains in ~~the~~market ~~best~~share ~~interests~~should ~~of the~~continue ~~ESOP~~to support Alion’s growth profile.

Innovative science, engineering and technology solutions. We offer innovative science, engineering and technology solutions in ~~Because~~all ~~you~~of ~~are~~our ~~designated~~core asbusiness aareas, ~~named~~which ~~fiduciary~~have been developed over our 79 year history. For example, our work in agile engineering sets us apart from our peers within the DoD market. Agile engineering is based in an approximately $5 billion per annum ~~with~~market ~~respect~~for reset, repair and modernization of mature systems. For example, we are currently involved in upgrading the electronic warfare pod for the F-15 fighter aircraft to: allow the radar warning receiver to better identify new threats. We are also involved in upgrading the Apache helicopter blade folding systems to develop an easier, less labor-intensive folding mechanism for helicopter

• your election to direct the ESOP trustee to invest your IITRI rollover balances or HFA transfer balances in the ESOP component; and • your decision to direct State Street to invest future pre-tax payroll deferrals in our common stock;

State Street is generally required to follow your directions to the extent they are in accordance with the terms of the KSOP and are not contrary to ERISA.

Named fiduciaries are required to act prudently, solely in the interest of the plan’s participants and beneficiaries and for the exclusive purpose of providing benefits to the plan’s participants and beneficiaries. A fiduciary, including a named fiduciary, who breaches the fiduciary responsibility rules of ERISA, may be liable to the plan for any losses caused by the fiduciary’s conduct. Therefore, when you act as a named fiduciary, you should do so in a prudent manner. If you do not wish to act as named fiduciary, you can decline to do so by not providing any directions to the ESOP trustee.

Please remember that the ESOP trustee has no responsibility or liability under ERISA or any other law to make a determination as to the advisability or prudence of any individual’s decision whether or not to direct the investment of all or any portion of his or her IITRI rollover or HFA transfer account balances or future pre-tax payroll deferrals in our common stock.

You can acquire a beneficial interest in our common stock in several ways:

• by participating in the one-time ESOP investment election; • by making pre-tax payroll deferrals; and • through our company retirement plan and matching contributions.

The One-Time ESOP Investment Election: The period during which you can elect to invest IITRI rollover or HFA transfer balances in the ESOP component of Newtek’s KSOP is called the one-time investment election period. If you make the one-time ESOP investment election, you will acquire an indirect interest in Newtek’s common stock upon completion of the acquisition. Although we will allocate shares of our common stock to your account within the ESOP component, the common stock will continue to be held in the ESOP trust. State Street, the ESOP trustee, will hold record title to our common stock and you will have a beneficial interest in the shares of common stock allocated to your ESOP account. As an ESOP participant, you will have a right to receive the value of the shares of common stock allocated to your account in the ESOP component subject to the terms and conditions of the KSOP.

Any decision you make to invest all or any portion of your eligible IITRI or HFA retirement account balances in our common stock is voluntary on your part. You are not obligated to do so and your failure to invest in our common stock will have no effect on your continued employment with us. Although all employees of IITRI on the closing date of the acquisition will become Newtek employees upon completion of the acquisition, and HFA employees will continue to be employed by HFA as Newtek’s subsidiary, no right to employment or continuing employment with Newtek, IITRI or HFA currently exists or is created by this offering and/or this acquisition.

transport. ~~The~~There ~~one-time~~is ~~ESOP~~an ~~investment~~additional ~~election~~approximately ~~period will~~$3 ~~run from l , 2002, until l , 2002,~~billion ~~unless~~per weannum ~~extend~~addressable itmarket ~~with~~where ~~the~~our ~~consent~~competency ofin ~~the~~agile ~~ESOP~~engineering ~~trustee. If~~can webe ~~extend~~applied ~~the~~to ~~one-time~~address ~~ESOP~~obsolescence ~~investment~~in ~~election~~fielded ~~period~~mature systems. For example, we ~~will~~ ~~notify~~are ~~you~~currently ofinvolved ~~this~~in ~~change.~~reverse ~~The~~engineering ~~one-time~~component ~~ESOP~~designs ~~investment election~~to ~~forms~~upgrade ~~will~~the beP-3 ~~included~~radar systems in ~~the~~support ~~packet~~ of ~~offering materials~~the ~~mailed~~Naval toAir ~~you~~Command ~~with~~because ~~your~~existing ~~final~~spare ~~prospectus.~~part ~~Employee retirement~~inventories ~~funds~~were ~~which~~exhausted. ~~cannot~~We beare ~~invested~~also insupporting the ~~ESOP component~~Army’s ~~due~~program tomanager anfor ~~oversubscription~~electro-optic ~~will~~infrared besensors ~~refunded~~ to ~~the~~reset ~~account~~perimeter ~~from which~~monitoring ~~the~~towers ~~funds~~that were ~~rolled~~brought ~~over~~back orfrom ~~transferred,~~Iraq ~~subject~~and ~~to your reinvestment direction~~Afghanistan. AsThis ofreset ~~May 10,~~includes ~~2002,~~integrating ~~the~~new ~~value~~full-spectrum ~~of the~~sensors ~~eligible account balances of IITRI~~ and ~~HFA~~full ~~employees~~motion ~~was $92~~video.~~5 million.~~

~~Pre~~Government focus on efficient, cost-~~Tax~~effective ~~Payroll Deferrals:~~solutions ~~The~~and ~~KSOP~~procurement practices. Criticism of government inefficiencies has led to a ~~401(k) feature~~focus ~~which~~on ~~permits~~identifying ~~employees~~opportunities to ~~defer~~achieve ~~pre-tax~~“more ~~income~~with less”. ~~After the~~We ~~acquisition~~believe government demand for solutions that enhance, asupgrade, asustain ~~Newtek~~and ~~employee~~improve ~~you~~existing ~~will~~platforms beand ~~able~~programs will continue to ~~direct~~increase. Offering holistic ~~future~~packages ~~pre~~that combine strong technical and economic solutions with effective, customer-~~tax~~tailored ~~payroll~~contract ~~deferrals~~structures ofrepresents ~~Newtek~~a ~~salary~~significant tocompetitive ~~either:~~ advantage.

•Our ~~the~~Value ~~ESOP~~Proposition ~~component of our KSOP; • the non-ESOP component of our KSOP; or • any combination of the two.~~

Relative revenue outperformance versus competitors in a challenging defense environment. Alion generated cumulative revenue ~~Your~~growth ~~pre-tax~~of ~~deferrals~~9.1% tofrom ~~the~~calendar ~~ESOP~~year ~~component~~2011 ~~may~~through 2014, ~~however~~ and 2.1% from calendar year 2013 through 2014, ~~not~~which ~~exceed~~favorably ~~seven~~compares ~~percent~~with the average of ~~your~~our ~~compensation.~~public ~~Any deferrals~~company ~~you~~industry ~~direct~~peers inof ~~excess~~cumulative revenue declines of ~~this~~(24.2)% ~~amount~~and ~~will~~(8.2)%, ~~automatically~~respectively, as beshown ~~re-invested~~below. inWe ~~the~~believe ~~non-ESOP~~Alion ~~component~~significantly ~~according~~outperformed that peer group due to ~~your current~~our ~~direction~~alignment with ~~Fidelity~~enduring defense priorities, and our ability to provide high-end, cost-effective services and solutions.

LOGO

Retirement Plan Contributions and Matching Contributions: Newtek will make retirement plan contributions to all its employees who are eligible participants in the Newtek KSOP. These contributions will be made to your accounts in both the ESOP and the non-ESOP components of the KSOP. We will also make matching contributions on your behalf, in the ESOP component, based on your future pre-tax deferrals of your Newtek salary.

Important KSOP Features: Our KSOP includes a number of features beyond those required by law:

• Special Price Protection: In order to provide an incentive for our older workers to participate in the one-time ESOP investment election, we have made special price protection a part of this offering. You qualify for special price protection if you are at least 55 years of age or older on the date of closing of the acquisition, and you request a distribution at any time during the first five years after closing, due to your death, disability or retirement on or after reaching age 60. If you qualify for special price protection, we will purchase the shares of common stock allocated to your ESOP account that are attributable to your one-time ESOP investment election at a per share price equal to the greater of (1) the original per share purchase price of the common stock on the closing date of the acquisition, or (2) the then fair market value of the common stock. This feature expires on the fifth anniversary of closing of the acquisition. Special price protection will not be available to any employees hired by Newtek in the future even if these employees are eligible to participate in a one-time ESOP investment election similar to the one-time ESOP investment election available to current IITRI and HFA employees. • Special Diversification Feature: Diversification is a process which allows you to move a portion of your account balance invested in company stock to other investment alternatives in the non-ESOP component. Our KSOP provides you with a special diversification feature. Beginning in the first quarter of the plan year following five years of participation in the KSOP, and then in the first quarter of each year thereafter, you will be permitted to move 10 percent of your ESOP component account balance to the non-ESOP component, provided this does not violate any of our loan covenants in effect at that time. This 10 percent is in addition to amounts you may diversify under the diversification right you are entitled to as an ESOP participant, as described in “The Beagle Holdings, Inc. Employee Ownership, Savings and Investment Plan — Investing in Your KSOP Account — Diversification.” • Valuation of Your ESOP Account: By law, we are required to value the common stock held in the ESOP component at least once a year. We have elected to have the common stock in the ESOP component valued twice a year — as of March 31 and September 30. Because all ESOP

~~transactions~~Combining ~~must~~science, ~~occur~~engineering atand ~~the~~technology. ~~current~~We ~~fair~~offer ~~market~~innovative ~~value of the common stock held in the trust~~science, engineering ~~this~~and ~~provision~~technology ~~affords~~solutions ~~you the opportunity to invest~~ in ~~company~~all ~~stock and request distributions~~ of ~~your~~our ~~account~~core atbusiness ~~the end of each semi-annual period~~areas, ~~rather~~which ~~than~~we ~~waiting~~have ~~until~~developed ~~the~~over ~~end~~our ~~of each plan~~ 79-year history. • Our ~~Retirement~~innovative ~~Plan~~solutions ~~Contribution~~are ~~and~~supported ~~Matching~~by ~~Contribution:~~our ~~Our~~skilled ~~retirement~~employee ~~plan~~base, ~~contributions~~which toincludes ~~your~~engineers, ~~KSOP~~scientists ~~account~~and ~~will~~former bemilitary personnel. ~~greater~~This ~~than~~allows ~~IITRI’s~~us ~~historical retirement plan contributions~~ to ~~its~~combine ~~401(a)~~engineering ~~plan.~~capabilities, ~~All~~scientific ~~HFA~~skills ~~employees~~ and ~~all~~domain ~~IITRI~~expertise ~~employees~~to ~~who~~provide ~~are~~solutions ~~hired~~that byincorporate ~~Newtek~~current ~~will~~technologies ~~upon~~with ~~closing~~real-world understanding of ~~the~~and ~~acquisition,~~experience ~~automatically~~with beDoD ~~eligible for Newtek’s retirement plan contributions~~programs, ~~whether~~systems orand ~~not~~networks. We ~~you~~employ ~~have~~approximately ~~satisfied~~2,800 ~~any year of service requirement. In addition~~people, ~~all~~at ~~HFA~~least ~~employees~~52% ~~and all IITRI employees hired by Newtek will upon completion~~ of ~~the~~whom ~~acquisition~~have ~~receive~~been ~~Newtek’s~~with ~~matching~~us ~~contribution~~for tomore ~~participants’~~than ~~accounts~~five infiscal ~~the~~years. ~~ESOP~~Our ~~component.~~workforce Inis ~~other~~highly ~~words~~educated, ~~you~~with ~~will~~approximately be30% ~~immediately~~of ~~eligible~~degreed ~~for~~employees ~~our~~having ~~matching~~PhDs ~~contributions~~or ~~made~~Masters todegrees, ~~your~~with ~~ESOP~~75% ~~account~~of ifthose ~~you~~degrees ~~are~~in Engineering, ~~employed~~Science byor ~~Newtek~~Math ~~upon~~/ ~~completion~~Computer ~~of the acquisition~~Science. •Approximately ~~You~~34% ~~Can Vote on Any Sale~~ of ~~Newtek:~~our Weemployees ~~have~~are ~~elected~~veterans. toAs ~~extend to you the right to direct the trustee to vote the shares~~ of ~~common stock allocated to your account on any tender offer for~~December 31, ~~or other offer to purchase~~2014, ~~the~~approximately ~~shares~~80% of ~~Newtek~~our ~~common~~employees ~~stock~~had ~~held~~security ~~by the ESOP component~~clearances, ~~even~~with ~~though~~approximately by30% ~~law~~of ~~participants~~our inemployees ~~the~~holding ~~KSOP~~clearances ~~only have voting rights in~~ at the ~~event~~Top ofSecret alevel ~~sale of all~~ or ~~substantially~~above, ~~all~~allowing ofus ~~Newtek’s~~access ~~assets,~~to ahighly ~~merger~~classified ofDoD ~~Newtek~~systems and ~~several other specific corporate transactions~~networks. •To ~~Purchase~~further ~~Price~~enhance ofour ~~Newtek’s~~technology ~~Common~~solutions, ~~Stock:~~we ~~Your~~have ~~pre-tax~~over ~~payroll~~100,000 ~~deferrals~~square ~~will~~feet ~~be used to purchase shares~~ of ~~our~~laboratory ~~common~~facilities, ~~stock~~which ~~based~~we onuse ~~the~~to ~~per~~conduct ~~share~~customer- ~~price~~and internally- onfunded ~~the~~technology ~~valuation~~and ~~date~~research ~~preceding~~and ordevelopment ~~following~~activities, ~~the~~often ~~date~~times onembedded ~~which~~within ~~you~~our ~~make~~customers ~~each pre-tax payroll deferral, whichever is lower~~facilities.

Large ~~This~~contract ~~offering~~backlog ofand ~~interests~~significant inrevenue ~~the~~visibility. ~~KSOP~~As isof ~~being made~~December 31, ~~pursuant~~2014, toour ~~exemptions~~backlog ~~from~~was ~~registration~~approximately ~~under state securities laws~~$1.5 Inbillion ~~the~~and ~~event~~approximately ~~that~~$499 anmillion ~~applicable exemption from registration is not available under the laws~~ of ~~any~~this ~~state,~~backlog orwas ~~in the~~funded. ~~event~~The ~~that~~strength ~~qualification~~ of ~~the~~our ~~securities~~backlog inprovides ~~any~~us ~~state~~with islonger-term ~~impracticable~~visibility inof ~~the~~our ~~judgment~~future ofrevenue ~~management,~~and the ~~offering~~long-term ~~will not~~nature beof ~~available~~our tocontracts ~~employees~~provides inan ~~those~~ongoing ~~states~~revenue stream. ~~The~~As ~~sale~~a result of ~~common~~ ~~stock~~our bystrong ~~Newtek~~backlog, toas ~~the~~of ~~ESOP~~December 31, is2014, ~~being~~our ~~made~~fiscal ~~pursuant~~year to2015 ~~an exemption~~revenue ~~from~~forecast ~~registration~~was 92% under ~~state securities laws~~contract.

Strong free cash flow generation. Our business model generates strong free cash flow as a result of low capital expenditure requirements and modest working capital needs. Our capital expenditures have been less than 1% of revenue on average over the past five fiscal years. We intend to utilize our strong free cash flow to continue to deleverage the business going forward. In addition, as of December 31, 2014, we had net operating loss carryforwards, or NOLs, and other deferred tax assets, of $241 million and $127 million, respectively.

Long-standing customer relationships. As a result of our innovative technology solutions and long operating legacy of superior performance, we have developed a strong reputation within our industry and with our customers for providing quality expertise in our core business areas. Our relationships across the DoD span decades.

Diverse government customer base with multiple contract vehicles. As of December 31, 2014, we perform services for a broad base of more than 200 distinct customers, including Cabinet-level government departments and agencies, and state and foreign governments. We earn revenue from our diverse customer base through a broad array of task orders that are issued under multiple contract vehicles awarded by U.S. government agencies and through other customers. Our multiple contract vehicles provide us with more flexibility to obtain tasking and associated funding from the U.S. government. For calendar year 2014, U.S. government contracts accounted for 97.3% of our revenue, with 93.8% of our revenue derived from DoD contracts. As of December 31, 2014, we had more than 200 distinct customers and over 500 active contracts. We are the prime contractor for 88% of the revenue generated in calendar year 2014 from our contracts. Our largest individual contract (stand-alone contract) accounted for approximately 8.0% of our revenues for calendar year 2014.

Experienced, consistent management team. The six senior members of our management team average more than 30 years of experience in the defense and related industry sectors, and have significant experience in government contracting. Members of senior management hold equity stakes through investment in our common stock through our ESOP.

~~Summary~~Our ofStrategy ~~Historical~~for ~~and~~Continued ~~Unaudited~~Growth ~~Pro Forma~~

Our engineering capabilities are aligned with DoD budget and mission priorities. A critical part of the DoD’s success in the future will ~~Consolidated~~depend ~~Financial~~on ~~Data~~cost-effective, rapid engineering solutions for critical platform and operational programs. Alion’s high-end agile engineering solutions provide a differentiated capability to support the DoD’s missions through modernization and upgrade of platforms and systems. Our design engineering and systems analysis services continue to address the DoD requirements for development of new programs and solutions to maintain the country’s technology edge and to meet the decisive superiority requirements of the 2014 Quadrennial Defense Review, or 2014 QDR. Alion’s deep domain knowledge, turn-key solutions approach, and design, production and in-service support offering directly support our current and continued growth. Our strategy to maintain our growth will leverage our experience and reputation to expand our work for existing and new customers. We will continue to leverage our high-end engineering and agile engineering services to support the modernization and upgrade of existing systems. We will further continue to broaden our core business areas through internal investment and organic growth that complements our customer-funded research and development in new capabilities, technologies, and solutions.

The following table presents summary historical and pro forma consolidated financial data for Newtek for the periods and dates indicated. The information set forth below should be read in conjunction with “ManagementAlion’s ~~Discussion~~ ~~and~~technical ~~Analysis~~services ofspan ~~Financial~~the ~~Condition~~product ~~and~~life ~~Results~~cycle, ~~of Operations”~~which ~~and~~allows ~~our~~us ~~historical consolidated financial statements and notes~~ to ~~those~~service ~~statements~~both ~~included~~new ~~elsewhere~~systems ~~in this prospectus. The consolidated operating results data for the years ended September 30, 1999, 2000~~ and ~~2001,~~programs ~~and~~as ~~the consolidated~~well ~~balance sheet data~~ as ~~of September 30, 2000~~deliver ~~and~~agile ~~2001,~~engineering ~~are derived from,~~ and ~~are~~in-service ~~qualified~~support byservices ~~reference to, our audited consolidated financial statements included elsewhere~~ in ~~this prospectus. The consolidated operating results data for~~ the ~~24-week~~operations ~~period ended March 15, 2002, are derived from,~~ and ~~are~~sustainment ~~qualified by reference to, our unaudited consolidated financial statements included elsewhere in this prospectus. The consolidated balance sheet data as~~ of ~~September 30,~~existing ~~1999~~platforms ~~is derived from our unaudited consolidated financial data that are not included in this prospectus. The unaudited pro forma financial information for the year ended September 30, 2001~~ and ~~for the 24-week period ended March 15~~equipment, ~~2002 gives effect to the incurrence of debt and the acquisition of IITRI’s assets~~ as ifshown ~~those transactions had been consummated on October 1, 2000 and were~~ in ~~effect for~~ the ~~year~~ ~~ended~~following ~~September 30, 2001 and for the 24-week period ended March 15, 2002~~diagram. ~~These transactions are described in “Unaudited Pro Forma Financial Data” found elsewhere in this prospectus.~~

LOGO

~~The~~Continue ~~historical~~to ~~consolidated~~prioritize ~~financial~~organic ~~information~~revenue and cash flow growth. We completed our most recent ~~for~~corporate ~~the~~acquisition ~~years~~in ~~ended~~calendar ~~September 30,~~year ~~1999~~2007. Subsequently, ~~2000~~our revenue has grown at a compounded annual growth rate of 2.2% despite a difficult defense budget environment, ~~and~~from ~~2001~~$745.1 million for calendar year 2008 to $847.3 million for calendar year 2014. More recently, our revenue has ~~been~~ ~~carved~~grown ~~out~~on ~~from~~a ~~the~~sequential ~~consolidated~~basis ~~financial~~for ~~statements~~each quarter of ~~IITRI~~ ~~using~~calendar year 2014. For the ~~historical~~three ~~results~~months ofended ~~operations~~December 31, ~~and~~2014, ~~bases~~revenue ~~of assets~~increased ~~and~~by ~~liabilities~~22.9% ofover the ~~portion~~three ofmonths ~~IITRI’s~~ended ~~business~~December 31, 2013. Going forward, we plan to becontinue ~~sold~~to prioritize organic revenue and ~~gives~~cash ~~effect~~flow growth and to ~~allocations~~further ofdeleverage ~~expenses~~our ~~from IITRI~~balance sheet. ~~Our~~For ~~historical~~more ~~consolidated~~than ~~financial~~five ~~information~~years, ~~may~~Washington ~~not be~~Technology ~~indicative~~and ofDefense ~~our~~News ~~future~~has ~~performance~~continued ~~and~~to ~~does~~rank ~~not~~us ~~necessarily reflect~~among ~~what~~the ~~our~~top ~~financial~~professional services ~~position~~government ~~and~~contractors. ~~results~~Washington ofBusiness ~~operations would~~Journal ~~have~~continues ~~been~~to ~~had~~rank weus ~~operated~~in asits atop ~~separate,~~20 ~~stand-alone entity~~technology ~~during~~government ~~the~~contractors ~~periods~~and ~~presented~~government contract awardees.

	Year Ended September 30,
												24-Week Period Ended
	1999		2000			2001			2001			March 15, 2002
	Historical								Pro Forma			Historical			Pro Forma
	(in thousands)
Consolidated Operating Data:
Contract revenue	$	117,500	$	156,137		$	193,152		$	193,152		$	88,554		$	88,554
Operating income		3,306		5,324			10,823			4,263			2,984			44
Other income (expense)(1)		12		(694	)		(1,072	)		(10,416	)		(191	)		(4,517	)
Income tax (expense) benefit(2)		246		(398	)		(302	)		(302	)		(366	)		(366	)
Net income (loss)		3,564		4,232			9,449			(6,455	)		2,427			(4,839	)
Consolidated Balance Sheet Data at End of Period:
Net accounts receivable		37,706		59,654			56,095						60,435			60,435
Total assets		65,328		85,460			74,153						81,176			174,579
Current portion of long-term debt		5,500		3,646			141						19,145			27,645
Long-term debt, excluding current portion		2,642		22,289			11,886						1,116			77,989
Other Data:
Depreciation and amortization		1,832		3,754			3,488						1,512			4,452
EBITDA(3)		5,383		9,773			14,134						4,455			3,423
Capital expenditures		4,213		2,795			1,940						1,987			1,987

(1)	Other income (expense) in 2000 includes a gain of $1.3 million on the sale of land in Annapolis, Maryland and a $0.5 million loss in equity of an affiliate. Includes interest expense on our bank credit facility for working capital which was our primary financing requirement in years 1999 through 2001. Pro forma amounts reflect interest expense related to approximately $89.1 million of debt associated with this offering and the acquisition of IITRI’s assets.
(2)	Income tax expense (benefit) primarily relates to income (loss) of our for-profit subsidiary, HFA.
(3)	EBITDA refers to net income before income taxes, interest expense, depreciation of fixed assets and amortization of goodwill. EBITDA is not a measure of financial performance under U.S. generally accepted accounting principles. We may calculate EBITDA differently than other companies. You should not consider it in isolation from, or as a substitute for, net income or cash flow measures prepared in accordance with generally accepted accounting principles or as a measure of profitability or liquidity. We have included EBITDA as supplemental disclosure because it may provide useful information regarding our ability to service debt and to fund capital expenditures. Our ability to service debt and fund capital expenditures in the future, however, may be affected by other operating or legal requirements.

~~Risk~~Multiple ~~Factors~~engines of growth. Alion will continue to invest in multiple engines of growth, including:

~~You~~Agile ~~should~~engineering. ~~carefully~~Our ~~consider~~agile engineering business more than doubled over the ~~following~~last three ~~factors~~fiscal years, and ~~all~~accounted ~~other~~for ~~information~~approximately in20% ~~this~~of ~~prospectus~~our ~~before investing~~calendar inyear ~~the~~2014 ~~ESOP component~~revenue. ~~Investing~~Our competency in ~~the~~agile ~~ESOP~~engineering ~~component involves~~and arapid ~~degree~~prototyping ofalign ~~risk.~~with ~~Any of~~ the ~~factors~~DoD’s ~~set~~ongoing ~~forth~~investments ~~under “Risks~~in ~~Related~~existing systems to ~~the~~address ~~Acquisition~~obsolescence, ~~of IITRI’s~~integrate ~~Assets”~~upgrades, and ~~“Risks~~improve ~~Related~~operational toperformance. Our ~~Business”~~competency ~~could harm~~in ~~our~~agile ~~business~~engineering ~~and~~requires ~~materially~~a ~~adversely~~high ~~affect~~level ~~our~~of ~~future operating~~skill, ~~results~~but ~~and~~is ~~could~~cost-efficient, ~~result~~and inprovides a ~~partial~~fast orfix ~~complete~~for ~~loss of~~our ~~your investment~~customers.

Continued growth in engineering services. We are expanding our design engineering, production oversight, test and ~~Risks~~evaluation ~~Related~~and in-service support to the ~~Offering:~~Navy warfare center community and international customers including Canada. We are expanding our systems engineering, logistics and foreign military sales support for the F-35 Lightning II Joint Project Office, multiple Naval Aviation programs, and the Littoral Combat Ship programs.

IfExpansion ~~you~~of ~~rollover~~our ormodeling ~~transfer~~& simulation, ~~all~~information ortechnology ~~a significant~~and ~~portion~~cybersecurity ofsolutions. ~~your~~We ~~eligible~~will ~~IITRI~~carry orour ~~HFA~~prime ~~retirement plan~~role ~~account~~on ~~balances~~NCTE ~~into~~across the ~~ESOP~~fleet ~~component~~and shore-side infrastructure. We continue to grow our cyber capabilities to support training of ~~the~~cyber ~~KSOP,~~warriors ~~then~~by emulating ~~your~~the ~~retirement~~effects ~~portfolios~~and ~~will~~remediation beof ~~less~~cyber ~~diversified~~attacks. We are expanding our work across the cyber domain including electronic warfare, cyberspace operations, and ~~therefore~~ ~~subject~~military toinformation ~~greater~~support ~~risk~~operations.

~~Currently,~~Continue ~~IITRI’s~~to ~~and~~focus ~~HFA’s~~on ~~retirement plan~~operational ~~accounts~~efficiency ~~offer~~and aprofitability. ~~diversified~~We ~~portfolio~~remain offocused ~~investment options.~~on ~~Many~~growing ~~financial~~our ~~advisors~~business and ~~investors consider it~~continuously ~~prudent~~achieving tooperating ~~diversify~~efficiencies ~~investments~~that towill ~~spread~~benefit ~~the~~our ~~risk~~performance ofdirectly ~~any particular~~through ~~investment~~increased ~~decreasing~~profitability inand ~~value.~~indirectly Ifthrough ~~all~~our orincreased ~~a significant~~competitiveness ~~part~~vis-à-vis ofour ~~your~~customers. ~~retirement~~In ~~savings~~the ~~plan~~past ~~assets~~two ~~are invested~~fiscal inyears, ~~our~~we ~~common~~reduced ~~stock~~annual operating incosts ~~the~~by ~~ESOP~~approximately ~~component,~~$8.0 ~~then~~million. ~~those assets~~These ~~will~~operational ~~not~~improvements beand ~~diversified~~cost ~~and~~reductions ~~will~~have beenabled ~~subject~~us to ~~changes~~improve ~~in value~~our ~~based~~competitive onposition ~~our~~by ~~financial~~delivering ~~performance~~cost ~~and~~effective ~~the~~solutions ~~fair~~to ~~market value~~the ofFederal ~~our assets~~Government. ~~Furthermore~~In addition, ~~except~~in ~~for~~the ~~your~~first quarter ~~diversification~~of ~~rights~~fiscal asyear ~~described in this prospectus~~2015, ~~you~~we ~~will not~~began ~~have the ability~~ to ~~redirect~~implement ~~those~~additional ~~assets~~cost ~~into~~reductions ~~other non-ESOP~~that ~~investments~~we ~~once~~expect ~~they are transferred~~ to ~~the~~reduce ~~ESOP component,~~our ~~even~~annual ifoperating ~~you~~costs ~~later~~by ~~determine~~approximately ~~that~~$13.0 ~~those other investments are more desirable~~million.

~~Because~~Continue ~~there~~to ~~are~~attract ~~substantial~~and ~~restrictions on~~retain ~~the~~highly ~~ownership~~experienced ~~and~~employees. ~~transfer~~We ofplan to continue to expand our ~~common~~expertise, ~~stock~~in ~~held~~particular in the ~~ESOP~~areas ~~component~~of technological developments, ~~and~~where ~~because~~we ~~there~~believe iswe nohave ~~public~~a ~~market~~significant ~~for~~advantage over our ~~common~~ ~~stock~~competition. orWe ~~the~~hire ~~KSOP~~skilled ~~interests~~employees, ~~your~~engage ~~ability~~in business development initiatives and invest in projects to ~~liquidate~~expand our employees’ skill sets within ~~your~~our ~~investment~~strong ~~will~~culture beof ~~limited~~innovation. We increase our employees’ technological and program management skills through training, internally funded projects and mentoring. We offer our employees non-degree programs in information technology, business, and desktop applications through “Alion University” to maintain and enhance our employees’ skills and advance our reputation in the commercial technology solutions markets. Additionally for the past four years, Military Times EDGE has voted us a “Best for Vets Employer”.

IfContracting ~~you~~tools ~~participate~~promote ingrowth. ~~this~~Our ~~offering,~~Information ~~you will~~Analysis ~~acquire~~Centers, aor ~~beneficial~~IAC, ~~interest~~contracts inprovide ~~our~~an ~~common~~agile ~~stock~~contracting ~~held~~mechanism inacross the ~~ESOP~~ ~~trust.~~Federal ~~You~~Government ~~will~~for ~~not~~best ~~directly~~value ~~own~~for ~~the~~highly ~~common~~technical ~~stock allocated to your account in the ESOP component~~services. ~~The~~IAC ~~ESOP~~vehicles isare ~~the~~growing ~~legal shareholder of our common stock and the ESOP trustee holds record title to the common stock~~ in ~~the~~popularity ~~name~~as ~~of the ESOP trust. Because~~ our ~~common~~customers ~~stock~~across ~~is held in~~ the ~~ESOP~~Federal ~~trust~~Government ~~and~~use ~~not~~the ~~by individual~~IAC ~~participants, individual participants will not be~~vehicles ~~able~~ to ~~sell,~~rapidly ~~pledge~~access ~~or otherwise transfer~~ the ~~shares~~most ofeffective ~~common stock~~and ~~allocated~~advanced totechnologies ~~their accounts. Furthermore, there is no public market for our common stock or our KSOP interests,~~ and ~~it is not anticipated that such a market will develop in the future~~services. ~~Retirement~~Our ~~funds~~award ~~directed~~values tounder the ~~ESOP~~IAC ~~component~~programs ~~in connection~~grew ~~with~~52% ~~the~~from ~~purchase~~fiscal ofyear ~~KSOP~~2013 ~~interests~~to ~~will,~~fiscal ~~except~~year ~~for your~~2014 ~~diversification~~and ~~rights,~~our becurrent ~~held~~pipeline ~~by us until your separation from service with us. Accordingly, the purchase~~ of ~~KSOP interests,~~identified ~~the~~new ~~proceeds~~business ~~from which are directed to the ESOP component,~~ is ~~suitable~~over ~~only~~$2 ~~for persons who have limited need for liquidity in this investment~~billion.

~~Your~~Refinancing ~~investment in the ESOP component will be a long-term investment~~ and ~~your~~Operational ~~ability~~Initiatives ~~to realize the value of that investment will be limited.~~

~~Investment~~In inAugust ~~the~~2014, ~~ESOP~~we iscompleted ~~participation in~~ a ~~retirement~~ ~~plan~~series ~~subject~~of torefinancing ~~various~~transactions IRS and ERISA rules relating to distributions from retirement plans. There will also be specific limitations on distributions and transfers from the ESOP component. These provisions and limitations which, in ~~general,~~ ~~provide~~order ~~that you will only be entitled~~ to ~~a distribution~~extend ~~related~~our todebt ~~your investment in the ESOP upon termination of your employment~~maturities, ~~including~~reduce ~~due~~our tocash ~~death, disability~~interest orexpense ~~retirement,~~ and ~~that distributions may be made in~~ aprovide ~~series~~institutional ofsponsorship ~~installments~~(as ~~distributed~~described ~~over a period of no~~ more ~~than~~ ~~five~~fully ~~years, are described~~ in ~~the section of this prospectus called~~ “~~The Beagle Holdings, Inc. Employee Ownership, Savings and Investment Plan~~ Business—2014 ~~Requesting a Distribution.~~Refinancing”. ~~Additionally,~~Following ifthe ~~you~~2014 ~~resign~~Refinancing, ~~are dismissed or are laid off,~~ we ~~must~~reorganized ~~begin~~by shifting to ~~make~~a ~~your~~matrix ~~distributions~~structure ~~no later~~with ~~than~~four ~~the~~P&L ~~end~~centers ofreporting ~~the~~directly ~~sixth~~to ~~year following~~ the ~~plan year in which you resigned~~CEO, ~~were dismissed or were laid off. Because of~~which ~~these~~eliminated ~~limitations,~~management ~~your~~layers ~~ability to realize the value of your investment in the ESOP component will be restricted~~ and ~~your investment~~associated ~~will~~indirect ~~not be as liquid as an investment in a publicly traded security~~costs. ~~These~~We ~~restrictions~~also ~~may limit your ability to liquidate your investment in the ESOP component if the value of your ESOP account is declining.~~

Weengaged ~~may~~external ~~not~~consultants ~~have~~to ~~sufficient~~conduct ~~cash~~industry ~~resources~~benchmarking, which has resulted in identifying meaningful cost-savings opportunities that enhance our competitive position on new bids. We continue to ~~pay~~focus ~~you~~on ~~the~~gross ~~value~~margin ofexpansion ~~your~~through ~~ESOP~~improved ~~account~~program ~~balance~~execution, indiversification aof ~~single lump~~our ~~sum~~customer ~~following~~and ~~your~~contract ~~separation~~mix ~~from~~and ~~service~~increasing ~~with~~of usour labor content, ~~which may~~as ~~adversely~~well ~~affect~~as ~~the~~increased ~~value~~investment in and efficiency of ~~your~~our ~~retirement~~business development ~~funds~~efforts.

WeIPO ~~have~~Refinancing a legal obligation to repurchase the shares of common stock allocated to your account at the fair market value of the common stock at the time you receive your distribution. This obligation affects our cash flow, which could be exacerbated by several factors not under our control, including:

•In ~~significant~~connection ~~increases,~~with ifthis ~~any~~offering, inwe ~~the~~intend ~~fair~~to ~~market~~refinance ~~value~~all of ~~your~~our ~~account;~~currently •outstanding debt, a ~~large~~portion ~~number~~ of ~~participants~~which ~~separating~~we ~~from~~expect ~~service~~to ~~who~~refinance through ~~request~~committed ~~simultaneous~~financing ~~distributions~~and ~~from~~ the ~~ESOP~~remainder ~~component; • the exercise~~ of ~~any~~which ~~demand~~will ~~for~~be usrepaid toin ~~purchase~~full ~~warrants from mezzanine note warrantholders~~ with ~~put rights; and •~~ the ~~exercise~~proceeds of ~~any~~this ~~demand~~offering. ~~for~~See us“Use toof ~~purchase~~Proceeds”, ~~warrants~~“Capitalization” ~~from~~and ~~subordinated~~“Description ~~note~~of ~~warrantholders~~Certain ~~with put rights~~Indebtedness”.

AsRisks aRelating ~~result, our cash resources could be insufficient~~ to ~~meet~~Our ~~all~~Business ~~lump sum repurchase requests~~ and ~~the ESOP~~This ~~committee~~Offering could determine that the shares of common stock allocated to your ESOP account can only be repurchased in a series of installments over a period of not more than five years. If the ESOP committee makes this determination, then each installment purchase will be made at the then-current fair market value which may be more or less than the value determined on the previous installment purchase date.

~~Unless~~Participating ~~your~~in ~~investment~~this inoffering ~~the~~involves ~~ESOP component~~substantial risk. Our ability to execute our strategies is also subject to ~~special~~certain ~~price~~risks. ~~protection,~~The werisks described under the heading “Risk Factors” immediately following this summary may ~~repurchase~~ cause us not to realize the ~~shares~~full benefits of ~~common~~our ~~stock~~strengths ~~allocated~~or may cause us to ~~your~~be ~~ESOP account~~unable atto ~~less~~successfully ~~than~~execute ~~the~~all ~~price~~or ~~you~~part ~~paid~~of ~~for~~our ~~them~~strategies. Some of the more significant challenges and risks include the following:

~~The~~• ~~value~~we ofdepend ~~our~~on ~~common~~U.S. ~~stock~~government ~~may~~contracts ~~decline~~for assubstantially ~~a result~~all of ~~the~~our ~~risks discussed in this prospectus or other unanticipated risks~~revenue. ~~When~~Changes ~~your participation~~ in the ~~ESOP terminates,~~contracting weor ~~have~~fiscal ~~the~~policies ~~obligation to repurchase the shares~~ of ~~common~~ ~~stock allocated to your account in~~ the ~~ESOP component at the fair market value of the common stock at the time you receive your distribution~~U.S. ~~The~~government ~~fair~~could ~~market~~adversely ~~value~~affect ofour ~~your investment~~business, infinancial ~~the~~condition, ~~ESOP~~results ~~component at that time may be less than the per share price~~ of ~~the~~operations ~~common~~and ~~stock~~ability ~~allocated~~ to ~~your~~satisfy ~~ESOP account~~our atfinancial ~~the time of your investment~~obligations, ~~unless you qualify for special price protection under the KSOP. Special price protection is available to you only if (1) you are at least age 55 on the date of closing of the acquisition,~~ and ~~(2) you~~ ~~request~~grow aour distribution during the first five years following the closing of the acquisition due to death, disability or retirement on or after reaching age 60. This special price protection only applies to distributions of shares allocated to the ESOP component pursuant to your one-time ESOP investment election. business;

~~Our~~• ~~legal~~delays ~~obligation~~in the federal budget process, including actions related to ~~repurchase~~the ~~shares of~~need ~~common~~to ~~stock~~raise ~~from~~the ~~employees~~debt ~~who~~ceiling ~~terminate~~and ~~their~~any ~~employment with~~future usFederal ~~may~~Government ~~lead~~shutdown, tocould adelay ~~default~~procurement ~~under~~of, and payment for, the ~~agreements~~products, ~~governing~~services and solutions we provide and materially and adversely affect our ~~proposed~~ ~~indebtedness.~~ revenue, gross margin, operating results and cash flow;

We• ~~are required to repurchase shares of common stock allocated to your account in~~ the ~~ESOP~~Budget ~~component~~Control ifAct ~~you terminate your employment with us and request a distribution~~ of ~~your~~ ~~account~~2011 ~~balance.~~caused ~~The~~significant ~~agreements~~delays ~~governing~~or ~~the~~reductions ~~indebtedness, which~~in weFederal ~~will~~Government ~~take~~appropriations onfor ~~to finance a portion of the acquisition purchase price, however, will contain limitations on~~ our ~~ability to~~current ~~make~~and ~~these~~future ~~distributions.~~programs ~~The~~and ~~amount of our repurchase obligations~~ may atnegatively ~~any~~affect ~~time~~our ~~exceed~~revenue ~~these~~and ~~limitations.~~materially ~~Compliance with~~and ~~legally-imposed~~adversely ~~repurchase~~affect ~~obligations may cause us to violate the payment limitations contained in the agreements relating to~~ our ~~indebtedness.~~financial ~~This may ultimately result in a default under these agreements~~condition, ~~which,~~operating ~~if not waived~~results, ~~could result~~cash inflows ~~acceleration of our indebtedness~~ and ~~cause~~ability us to ~~dispose~~ ofsatisfy our ~~assets~~financial ~~or declare bankruptcy~~obligation, ~~any~~and ofgrow ~~which would have a material adverse effect on~~ our business ~~and may decrease the value of your investment.~~ ;

•

we face intense competition from many companies that have greater resources than we do. This could cause price reductions, reduced contract profitability, and loss of market share;

•

historically, a few contracts have provided most of our revenue. If we do not retain or replace these contracts our operations and financial condition will suffer;

•

if we are unable to achieve or manage growth, our business could be materially adversely affected;

•

we may lose one or more members of our senior management team or fail to develop new leaders, which could cause the disruption of the management of our business;

•

our business could suffer if we fail to attract, train and retain skilled employees;

•

our subcontractors’ failure to perform contractual obligations could damage our reputation as a prime contractor and our ability to obtain future business;

•

further adverse changes in market conditions, the stock market, the merger and acquisition environment in our industry or Federal Government budget constraints could adversely affect the value of our operating businesses which could cause us to recognize a goodwill impairment charge in the future;

•

our employees may engage in misconduct or other improper activities, which could harm our business;

•

many of our U.S. government customers produce goods and services through multiple delivery order type contracts under which we must compete for post-award orders;

•

U.S. government contracts contain termination provisions that are unfavorable to us;

~~Future~~• ~~pre-tax~~as ~~deferrals~~a ~~invested~~U.S. ingovernment ~~our ESOP~~contractor, ~~could~~we ~~have~~must acomply ~~dilutive~~with ~~effect~~complex onprocurement ~~your~~laws ~~ownership~~and ~~interest~~regulations and ~~the~~ ~~value~~our offailure ~~each~~to ~~share~~do ofso ~~common~~could ~~stock;~~result ~~our~~in ~~matching~~suspension ~~and retirement~~or ~~plan~~debarment ~~contributions~~from ~~could~~doing ~~also~~business with the U.S. government or otherwise have a ~~dilutive~~negative ~~effect on~~impact ~~your~~upon ~~ownership~~our ~~interest.~~ business;

~~You~~• ~~will~~we bederive ~~able~~significant torevenue ~~increase~~from ~~your ownership interest in the ESOP component by purchasing additional KSOP interests with pre-tax payroll deferrals and directing that your pre-tax deferrals be invested in the ESOP component~~U.S. ~~These pre-tax~~government ~~deferrals~~contracts ~~may~~awarded bethrough ~~used~~competitive ~~to purchase stock at a per share price that is less than the current fair market value~~bidding, which ~~may have~~is aan ~~dilutive~~inherently ~~effect~~unpredictable ~~on both the ownership interest and the value of each share of common stock allocated to your ESOP amount.~~ process;

~~Our~~• ~~business strategy includes growth through acquisitions. Employees of acquired companies who become~~ our ~~employees~~ onbusiness ~~completion~~could ~~of an acquisition will~~ be ~~eligible~~materially ~~to invest~~negatively inimpacted ~~our ESOP component both~~ by ~~making~~security athreats ~~one-time~~and ~~ESOP investment~~breaches, ~~election~~including tocybersecurity ~~rollover eligible retirement plan account balances into the ESOP component. In addition to these one-time ESOP investment elections by new employees~~threats, ~~our matching~~ and ~~retirement~~ ~~plan~~other ~~contributions made in common stock to the accounts of eligible employees could also dilute your ownership interest.~~ disruptions;

~~Future~~• ~~equity~~our ~~issuances~~failure ~~could~~to ~~have~~maintain ~~a dilutive~~necessary ~~effect~~security onclearances ~~your~~may ~~ownership~~limit ~~interest~~our ability to carry our confidential work for U. S. government customers, which could cause our revenue to decline; and

~~Under~~• the ~~anti-dilution provisions of the warrants, if in the future we issue additional common stock to the ESOP component of the KSOP or~~ other ~~capital~~factors ~~stock~~set atforth ~~less than~~under ~~fair market value,~~ the ~~exercise~~“Risk ~~price~~Factors” ~~of the outstanding warrants will decrease. There is an exception for issuances of common stock to the ESOP resulting from pre-tax payroll deferrals. A decrease~~ in ~~the~~this ~~exercise price of the outstanding warrants will decrease the value of your ownership interest~~prospectus.

Before you ~~The~~participate ~~existence~~in ofthis aoffering, ~~stock~~you ~~appreciation rights~~should ~~plan~~carefully ~~for~~consider all of the ~~benefit~~information ofin ~~our~~this ~~directors~~prospectus, ~~officers~~including ~~and employees~~those ~~could~~matters ~~decrease~~set ~~the~~forth ~~value~~under ofthe ~~your~~heading ~~ownership interest~~“Risk Factors”.

~~The~~Implications ~~initial price~~ of ~~the~~Being ~~common~~an ~~stock~~Emerging inGrowth ~~the~~Company ESOP component will be established at closing of the acquisition and will take into account the maximum number of stock appreciation rights which may be awarded under Newtek’s proposed stock appreciation rights plan. Issuance of stock appreciation rights will cause the per share value of our common stock to be lower than if the stock appreciation rights had not been issued. Additionally, the creation of additional stock appreciation rights plans or stock option plans could decrease the value of your ownership interest.

~~You~~As doa ~~not~~company ~~have~~with ~~the~~less ~~right~~than to$1.0 ~~vote~~billion ~~the common~~in ~~stock~~revenue ~~allocated~~during toour ~~your~~last ~~account~~fiscal year, ~~except~~we qualify as an “emerging growth company” as defined in the ~~event~~Jumpstart Our Business Startups Act of ~~extraordinary~~ ~~transactions~~2012, or JOBS Act. An emerging growth company may take advantage of specified reduced reporting and other requirements that are otherwise applicable generally to public companies. These provisions include:

~~The~~• ~~ESOP~~we ~~trustee,~~are asrequired ~~directed~~to byhave ~~the~~only ~~ESOP committee,~~two ~~votes~~years ~~the shares~~ of ~~common~~audited ~~stock~~financial ~~held~~statements inand ~~the~~only ~~ESOP trust.~~two Asyears aof ~~participant~~related ~~in the ESOP, you are entitled to direct the ESOP trustee~~Management’s ~~voting~~Discussion ofand ~~the~~Analysis ~~shares~~ of ~~common~~Financial ~~stock allocated~~Condition toand ~~your~~Results ~~account~~of ~~only~~Operations ~~with respect to certain corporate transactions, including:~~ disclosure;

• ~~merger,~~we •are ~~consolidation,~~not •required ~~recapitalization,~~to •engage ~~reclassification,~~an •auditor ~~liquidation,~~to •report ~~dissolution,~~on •our ~~sale~~internal ofcontrols ~~substantially~~over ~~all~~financial ofreporting ~~Newtek’s~~pursuant ~~assets, or • tender offer for, or other offer~~ to ~~purchase,~~Section ~~the~~404(b) ~~shares~~ of ~~Newtek~~the ~~common~~Sarbanes-Oxley ~~stock~~Act ~~held~~of ~~in the ESOP component.~~2002;

~~Therefore,~~• aswe anare ~~ESOP~~not ~~participant~~required ~~you~~to ~~will~~comply ~~have the~~with ~~power~~any torequirement ~~direct~~that ~~the~~may ~~ESOP~~be ~~trustee’s~~adopted ~~voting~~by of the ~~shares of~~Public ~~common~~Company ~~stock~~Accounting ~~allocated~~Oversight toBoard ~~your~~regarding ~~account~~mandatory inaudit ~~the~~firm ~~above instances,~~rotation ~~but~~or ~~you~~a ~~will~~supplement ~~not~~to bethe ~~able~~auditor’s toreport ~~vote~~providing ~~for~~additional ~~directors~~information orabout ~~on other~~the ~~business~~audit ~~matters~~and ~~subject~~the tofinancial ~~shareholder~~statements ~~approval~~(i. e., an auditor discussion and analysis);

•

we are not required to submit certain executive compensation matters to stockholder advisory votes, such as “say-on-pay”, “say-on-frequency” and “say-on-golden parachutes”; and

•

we are not required to disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the chief executive officer’s compensation to median employee compensation.

We may take advantage of these provisions until the last day of our fiscal year following the fifth anniversary of the completion of this offering or such earlier time that we are no longer an emerging growth company. We would cease to be an emerging growth company if we have more than $1.0 billion in annual revenue, have more than $700 million in market value of our common stock held by non-affiliates, or issue more than $1.0 billion of non-convertible debt over a three-year period. We may choose to take advantage of some but not all of these reduced burdens. We have not elected to adopt the reduced disclosure in this prospectus other than with respect to the reduced disclosure in the section entitled “Selected Consolidated Financial Data”.

The JOBS Act permits an emerging growth company like us to take advantage of an extended transition period to comply with new or revised accounting standards applicable to public companies. We are choosing to “opt out” of this provision and, as a result, we will comply with new or revised accounting standards as required when they are adopted. This decision to opt out of the extended transition period is irrevocable.

~~The~~Corporate ~~ESOP~~Information ~~committee, consisting of members of our senior management team, has indirect control over the appointment of our board members and senior officers, which could create conflicts of interest.~~

~~Members~~We ofare ~~our senior management team constitute~~ a ~~majority~~Delaware ofcorporation. ~~the~~Our ~~members~~executive ofoffices ~~the~~are ~~ESOP~~located ~~committee.~~at ~~Because~~1750 ~~the ESOP~~Tysons ~~committee~~Boulevard, ~~directs~~Suite ~~the ESOP trustee~~1300, ~~as sole shareholder~~McLean, ~~in how~~VA ~~to vote its shares of Newtek common stock after closing of the offering and acquisition~~22102, ~~directors~~ and ~~senior~~our ~~officers will~~telephone ~~have~~number ~~the~~is ~~opportunity to entrench themselves in office~~(703) 918-4480. ~~Since~~Our ~~the members~~corporate ofwebsite ~~our~~address ~~senior management team represent a majority of votes necessary to direct the ESOP trustee to elect Newtek’s board of directors, who will appoint Newtek’s senior officers, it~~ is ~~unlikely~~http://www.alionscience.com. ~~that~~Our ~~other~~website ~~members~~and of the ~~ESOP committee~~information ~~will~~contained beon ~~able~~our towebsite ~~change~~are ~~the~~not ~~composition~~part of the ~~board. Given the ESOP committee’s indirect control over the appointment of our senior officers~~prospectus, itand ~~may~~information ~~create~~contained ~~actual~~therein ~~or perceived~~should ~~conflicts~~not ofbe ~~interest~~relied ~~between~~upon ~~our senior~~when ~~officers’~~making ~~interests~~an ininvestment ~~being officers of Newtek and their representation of the interests of ESOP participants~~decision.

If the ESOP or Newtek does not continue to be exempt from federal income tax and any unrelated business income tax, the economic value of your investment will be adversely affected.

We have made an election to be taxed as an S corporation for federal income tax purposes. As an S corporation, we generally will not be subject to federal income taxation or state income taxation in most states. Rather, our income, gains, losses, deductions and credits should flow through to the ESOP. Under current provisions of the Internal Revenue Code, the ESOP trust is exempt from federal income taxation and any unrelated business income tax, which we refer to as UBIT. UBIT is a special federal income tax imposed on an otherwise tax-exempt entity (such as a tax-exempt charity or qualified pension plan, including an ESOP) to the extent it earns income from a trade or business unrelated to its exempt purpose. The Internal Revenue Code specifically exempts ESOPs that invest in S corporation stock of the employer from UBIT.

If for any reason we lose our S corporation status, we would be required to pay federal income tax, thereby reducing the amount of cash available to repay debt, reinvest in our operations or fulfill our repurchase obligation to ESOP participants, which would have a material adverse effect on the economic value of your investment in our ESOP component. Applicable laws and regulations may change in a way which results in the taxation of Newtek as a corporation other than as an S corporation. Furthermore, current law that exempts the ESOP trust from federal income taxation and UBIT may change. Similarly, if the ESOP becomes subject to federal income taxation, we may have to distribute cash to the ESOP to allow it to pay this tax, again reducing the amount of cash we have available to repay debt, to reinvest in our operations or to fulfill our repurchase obligations.

The passage of legislation requiring earlier diversification opportunities in defined contribution plans may significantly impair our ability to meet our repurchase obligations because of increased demands on our cash resources due to participants electing to diversify earlier than anticipated.

As a result of the bankruptcy filing of Enron Corp. and the loss suffered by Enron employees in their retirement accounts invested in Enron stock, various proposals are being considered by the U.S. Congress which would require earlier diversification opportunities than what are currently required by law. If after the acquisition is complete, a bill is passed which lowers the age or shortens the time period after which employees may diversify their investments in the ESOP component, our cash resources could be insufficient to meet our repurchase obligations. This may result in a delay in the distribution of your ESOP account balances and may adversely affect the amount of your benefits, because it may leave us with insufficient cash resources to perform our business plan or meet our debt obligations.

If the amount of pre-tax deferrals made by employees is less than we anticipate, we may not have sufficient cash flow to operate our business successfully and the value of your investment could decrease.

Our business model contemplates significant new purchases of stock by employees with pre-tax payroll deferrals. If pre-tax deferrals are less than we have forecast, our overall cash flow will decrease and a

~~portion~~The ofOffering our available cash resources may be required to meet our repurchase obligations rather than being utilized in the business. A decrease in the amount of available cash flow for use in our business operations could decrease the value of your investment.

~~The~~Issuer ~~proposed~~Alion ~~terms~~Science ofand ~~management’s incentive~~Technology ~~compensation creates a conflict of interest for them~~Corporation.

~~IITRI~~Common ~~has~~stock ~~agreed~~offered toby ~~provide~~us ~~financial incentives to our management, including our management negotiating team, in connection with Newtek’s purchase of IITRI’s assets~~shares. These incentives will be payable upon completion of the acquisition. These incentives may include any, or a combination of, a subordinated note, a mezzanine note, or warrants, the terms of each of which management is currently negotiating on behalf of Newtek. The proposed incentives create a conflict of interest between management’s own compensation interests and their representation of Newtek’s interests in negotiation of the subordinated note, the mezzanine note and the warrants.

~~Risks~~Option ~~Related~~ to ~~the~~purchase ~~Acquisition~~additional shares of ~~IITRI’s~~ ~~Assets:~~ common stock from us shares.

WeCommon ~~expect~~stock tooutstanding ~~incur~~immediately aafter ~~significant~~the ~~amount~~offering shares, assuming no exercise of ~~debt~~ the underwriters’ option to ~~complete~~purchase ~~the~~up ~~acquisition~~to ~~which~~an ~~will~~additional ~~limit~~shares ~~our operational~~of ~~flexibility~~common stock from us.

InUse ~~order~~of toproceeds ~~complete~~We ~~the~~estimate ~~acquisition~~that ~~of IITRI’s~~the ~~assets,~~net proceeds we will ~~need~~receive tofrom ~~assume~~the asale ~~substantial~~of ~~amount~~ shares of ~~indebtedness.~~our Oncommon astock ~~pro~~in ~~forma~~this ~~basis~~offering, after ~~giving~~deducting ~~effect~~underwriter todiscounts and commissions and estimated offering expenses payable by us (assuming the ~~acquisition,~~ ~~our~~shares ~~consolidated~~are ~~debt~~sold at the midpoint of the range on the cover of the prospectus), will be approximately $~~108.1~~ , million, ator ~~closing~~$ million if the underwriters’ exercise their option to purchase additional shares in full. We dointend ~~not~~to ~~have~~use ~~experience~~the innet ~~functioning~~proceeds ~~as a~~from ~~highly~~this ~~leveraged~~offering ~~company~~to repay debt. See “Use of Proceeds”.

~~Our~~Dividend ~~indebtedness~~policy ~~could:~~ Alion has never declared any cash dividends. Following the completion of this offering, we do not expect to pay any dividends in the future and the terms of our debt instruments will limit our ability to do so. See “Dividend Policy”.

•Risk ~~limit~~factors ~~our~~See ~~ability~~“Risk toFactors” ~~obtain~~beginning ~~additional~~on ~~financing~~page ~~for~~17 ~~working~~of ~~capital,~~this ~~capital~~prospectus ~~expenditures, acquisitions and other general corporate activities; • limit our flexibility in planning~~ for, ora ~~reacting~~discussion to, changes in our business and the industry in which we operate; • make it more difficult for us to satisfy our obligations to our creditors, including our repurchase obligations to ESOP participants, and, if we fail to comply with the requirements of ~~the~~factors ~~indebtedness,~~that ~~may~~you ~~require~~should ~~refinancing~~carefully onconsider ~~terms~~before ~~unfavorable~~deciding to ~~us,~~invest orin ifshares ~~refinancing is not possible, our creditors could accelerate the maturity~~ of our ~~indebtedness,~~common which could cause us to default under other indebtedness, dispose of assets or declare bankruptcy; • limit our ability to successfully withstand a downturn in our business or the economy generally; and • place us at a competitive disadvantage against other less leveraged competitorsstock.

~~The~~Listing ~~purchase~~We ~~price~~intend ~~being~~to ~~paid~~apply to ~~IITRI~~have ~~in the~~our ~~acquisition~~common ~~may~~shares belisted ~~too~~on ~~high~~the ~~because~~, ~~valuing~~under ~~private businesses~~the ~~can~~symbol be“ ~~difficult and uncertain~~”.

~~The~~Unless ~~purchase price and terms of the acquisition~~otherwise ~~were negotiated between IITRI~~indicated, ~~the~~all ~~Illinois~~information ~~Institute of Technology, the ESOP trustee, and representatives of our management team. In those negotiations, our business may have been overvalued because of the many difficulties and uncertainties~~ in ~~valuing~~this ~~private~~prospectus ~~business~~assumes ~~operations.~~or Ifgives ~~the purchase price and, therefore, the debt incurred in connection with the acquisition, are too great, repayment of that debt could prove difficult and may have a material adverse~~ effect ~~on our~~to: ~~operating results and financial condition and the value of your investment in the ESOP component.~~

~~Risks~~• ~~Related~~the toIPO ~~Our Business:~~ Refinancing;

We• ~~expect~~the toelimination ~~experience~~of ~~net~~all ~~losses~~of inour ~~at least~~outstanding ~~our~~Series ~~first~~A ~~year~~Preferred Stock as described in “Description of ~~operation.~~ Capital Stock – Preferred Stock”;

~~Our~~• ~~fiscal~~full ~~year~~exercise ~~begins~~of onthe ~~October 1~~2014 ~~and~~Warrants ~~ends on~~as ~~September 30.~~described ~~We expect to incur a net loss~~ in at“Description ~~least our first year~~ of ~~operation,~~Capital ~~fiscal~~Stock ~~year~~– ~~2003.~~2014 ~~Contributing factors to the initial net loss include the~~ Warrants”;

•

no exercise by the underwriters of their option to purchase additional shares of our common stock; and

•

an assumed initial public offering price of $ per share, the midpoint of the estimated offering price range set forth on the cover of this prospectus.

~~significant~~Summary ~~amount~~Historical ofConsolidated ~~interest~~Financial ~~expense~~Data associated with the debt financing for the acquisition of IITRI assets and the amortization expense related to intangible assets acquired. The amount of the initial net loss and our ability to regain future profitability are subject to our ability to achieve and sustain a significant level of revenue growth coupled with our ability to manage our operating expenses. If revenues grow more slowly than we anticipate, or if operating expenses exceed our expectations, we may not become profitable. Even if we become profitable we may not be able to sustain our profitability.

~~Our~~The ~~ability~~following totables ~~service~~present summary historical condensed consolidated financial data for each of our ~~debt~~last three fiscal years ended September 30, 2014, 2013 and ~~meet~~2012, for the three months ended December 31, 2014 and 2013, for the twelve months ended December 31, 2014, and as of September 30, 2014 and 2013 and December 31, 2014. The summary historical ~~other~~condensed ~~future~~consolidated ~~obligations~~financial isdata ~~dependent~~for onthe fiscal years ended September 30, 2014, 2013 and 2012 and as of September 30, 2014 and 2013 have been derived from our ~~future~~audited ~~operating~~financial statements which are included elsewhere in this ~~results~~prospectus. The summary historical condensed consolidated financial data for the three months ended December 31, 2014 and we2013 ~~cannot~~and beas ~~sure~~of ~~that~~December 31, we2014 ~~will~~has bebeen ~~able~~derived tofrom ~~meet~~our ~~these~~unaudited condensed consolidated interim financial ~~obligations~~statements aswhich ~~they~~are ~~come~~included ~~due~~elsewhere in this prospectus. The summary historical condensed consolidated financial data for the twelve months ended December 31, 2014 was calculated by adding amounts from our financial statements for the fiscal year ended September 30, 2014 to amounts from our unaudited financial statements for the three months ended December 31, 2014 and subtracting amounts from our unaudited financial statements for the three months ended December 31, 2013. In management’s opinion, the unaudited condensed consolidated financial statements reflect all adjustments and reclassifications that are necessary for a fair presentation of the periods presented.

~~Our~~The ~~ability~~results topresented ~~meet~~below ~~our~~are ~~payment~~not ~~obligations~~necessarily ~~and~~indicative of results that may be expected for any future period. The following information toshould ~~comply~~be read in conjunction with ~~the~~“Capitalization”, ~~financial~~“Management’s ~~covenants~~Discussion ~~contained~~and inAnalysis ~~the agreements~~of ~~relating~~Financial toCondition and Results of Operations”, “Business” and our ~~indebtedness~~audited isannual ~~subject~~and tounaudited ainterim ~~variety~~financial ofstatements ~~factors,~~and ~~including~~notes ~~changes~~included elsewhere in: this prospectus.

• funding of our contract backlog; • the time within which our sponsors pay our accounts receivable; • new contract awards and our performance under these contracts; • continued increase in revenues on an annual basis; • interest rate levels; • our status as an S corporation for federal income tax purposes; and • general economic conditions.


	Twelve Months Ended December 31, 2014			Three Months Ended December 31,						Fiscal Years Ended September 30,
	Twelve Months Ended December 31, 2014			2014			2013			2014			2013			2012
	(Dollars in thousands except per share data)
Consolidated Statement of Operations and Comprehensive Loss:
Contract revenue	$	847,301		$	227,871		$	185,380		$	804,809		$	848,972		$	817,204
Direct contract expense		665,907			181,870			145,275			629,311			669,504			632,831

Gross profit		181,394			46,001			40,105			175,498			179,468			184,373
Operating expenses		78,240			19,043			18,864			78,061			84,128			91,494
General and administrative expenses		45,113			12,947			18,993			51,159			53,139			52,441

Operating income		58,041			14,011			2,248			46,278			42,201			40,438
Other income (expense)
Interest income		58			14			11			55			55			78
Interest expense		(85,068	)		(22,353	)		(18,948	)		(81,661	)		(75,700	)		(74,934	)
Other		(105	)		(10	)		(28	)		(123	)		(84	)		(55	)
Change in warrant value		10,095			201			—			9,894			—			—
Gain (loss) on debt extinguishment		(11,458	)		—			—			(11,458	)		3,913			—

Total other expense		(86,478	)		(22,148	)		(18,965	)		(83,294	)		(71,816	)		(74,911	)
Loss before income taxes		(28,435	)		(8,137	)		(16,717	)		(37,016	)		(29,615	)		(34,473	)
Income tax expense		(6,980	)		(1,746	)		(1,745	)		(6,980	)		(6,977	)		(6,974	)

Net loss	$	(35,417	)	$	(9,883	)	$	(18,462	)	$	(43,996	)	$	(36,592	)	$	(41,447	)
Post-retirement actuarial gains (loss)		(149	)		—			—			(149	)		279			26

Comprehensive loss	$	(35,566	)	$	(9,883	)	$	(18,462	)	$	(44,145	)	$	(36,313	)	$	(41,421	)

Loss Per Share Data:
Net loss per share of common stock
Basic				$	(0.75	)	$	(2.41	)	$	(5.53	)	$	(5.39	)	$	(6.74	)
Diluted(a)				$	(0.75	)	$	(2.41	)	$	(5.53	)	$	(5.39	)	$	(6.74	)
Weighted average shares of common stock outstanding
Basic					13,106,777			7,659,817			7,952,248			6,787,660			6,148,438
Diluted(a)					13,106,777			7,659,817			7,952,248			6,787,660			6,148,438

Pro Forma Earnings (Loss) Per Share Data(b):
Net income (loss) per share of common stock (unaudited)
Basic				$						$
Diluted(c)				$						$
Weighted average shares of common stock outstanding used in computing pro forma net income (loss) per share of common stock (unaudited)
Basic
Diluted(c)

Our ability in the future to meet our obligations related to the put rights associated with the warrants and to our repurchase obligations under the KSOP will also be affected by these factors.

We have significant obligations which become due in 2007, 2008, 2009, and 2010.

We may not generate sufficient cash flows to meet these obligations when they become due. If we are unable to generate sufficient cash flow or otherwise obtain funds necessary to make the required payments on our indebtedness, then we may be required to refinance our indebtedness. We cannot be certain that our indebtedness could be refinanced, if at all, on terms that are favorable to us. In the absence of a refinancing, our lenders would be able to accelerate the maturity of our indebtedness, which could cause us to default under our other indebtedness, dispose of assets or declare bankruptcy. Any of these actions would result in a substantial diminution in the value of your investment in the ESOP and could result in the loss of your entire investment.

We are dependent on government contracts for substantially all of our revenues.

Approximately 92 percent of our revenues for fiscal year 1999, 89 percent of our revenues for fiscal year 2000, 95 percent of our revenues for fiscal year 2001 and 98 percent of our revenues for the 24-week period ended March 15, 2002, were derived from contracts with the federal government. Contracts with the U.S. Department of Defense accounted for approximately 85 percent, and contracts with other government agencies accounted for approximately 10 percent, of our total revenues in fiscal year 2001. We expect that government contracts are likely to continue to account for a significant portion of our revenues in the future. A significant decline in government expenditures, or a shift of expenditures away from government programs that we support, could adversely affect our business and result in a decline in our revenues.

Historically, a few contracts have provided us with most of our revenues, and if we do not retain or replace these contracts our operations will be adversely impacted, as will the value of your investment.

Five large federal government contracts accounted for approximately 50 percent of our revenues in fiscal year 2001. A few contracts are likely to continue to account for a significant percent of our revenues in the future. Termination of these contracts or our inability to renew or replace them when they expire

could have a material adverse effect on our business and ability to generate revenue, and thus on the value of your investment.


	Twelve Months Ended December 31, 2014			Three Months Ended December 31,						Fiscal Years Ended September 30,
	Twelve Months Ended December 31, 2014			2014			2013			2014			2013			2012
	(Dollars in thousands)
Other Financial Data:
Capital expenditures	$	(1,461	)	$	(552	)	$	(273	)	$	(1,182	)	$	(1,869	)	$	(2,731	)
EBITDA(d)		61,164			15,266			3,536			49,435			53,433			52,178
Consolidated EBITDA(d)		72,316			19,234			14,895			67,978			71,000			71,754

Government contracts contain termination provisions that are unfavorable to us.


	As of December 31, 2014			As of September 30,
	As of December 31, 2014			2014		2013
	(Dollars in thousands)
Consolidated Balance Sheet Data:
Cash and cash equivalents	$	12,984		$	10,732	$	25,613
Working capital		(2,554	)		1,412		42,569
Total assets		607,674			604,269		624,626
Total debt(e)		575,875			569,028		556,118

~~Generally, government agencies can terminate contracts with their suppliers at any time without cause. If~~ (a ~~government~~) ~~agency~~Does does terminate one of its contracts with us without cause, we will likely be entitled to receive compensation for the services provided or costs incurred up to the date of termination as well as a negotiated amount of the fee on the contract to the date of termination. We will not~~, however,~~ bereflect ~~eligible to receive compensation for~~ the ~~remainder of~~impact ~~expected fees after the date~~ of ~~termination. Further, we will not be eligible to receive compensation if a government contract is terminated because we defaulted under~~ the ~~terms~~exercise of ~~the contract.~~any Inwarrants ~~fact, if a default were to occur, we may be liable~~ for ~~excess costs incurred by the government in procuring the undelivered portion of the contract from another source. Termination of~~ any ~~of our large government contracts may negatively impact our revenues and, in turn, the value of your investment~~period.

We(b) ~~may~~Pro ~~not~~Forma ~~receive~~net income (loss) per share data reflects the Transactions, including the issuance of shares of common stock in this offering and the IPO Refinancing, and the use of proceeds therefrom, full ~~amount~~exercise of ~~our backlog~~the 2014 Warrants, ~~which~~and ~~could~~the ~~harm~~elimination ~~our~~of ~~business~~the Series A Preferred Stock, as if they had occurred on October 1, 2013.

~~The~~(c) ~~maximum~~Does ~~contract value specified under a government contract is~~ not ~~necessarily~~reflect indicative of revenues that we will realize under that contract. Congress normally appropriates funds for a given program on a fiscal year basis, even though actual contract performance may take many years. As a result, contracts ordinarily are only partially funded at the ~~time~~ ofimpact ~~award, and additional monies are normally committed to the contract by the procuring agency as appropriations are made by Congress in subsequent fiscal years. The portion~~ of ~~a government contract which has not yet been performed is referred to as backlog. The original value of a government contract is used in estimating~~ the ~~amount of our backlog. We define backlog to include both funded and unfunded orders for services under existing signed contracts, assuming the~~ exercise of ~~all options relating to those contracts that have been priced. We define funded backlog to be~~ the ~~portion~~2010 ofWarrants ~~backlog~~ for which funding currently is appropriated and obligated to us under a contract or other authorization for payment signed by an authorized purchasing authority, less the amount of revenue we have previously recognized under the contract. We define unfunded backlog as the total value of signed contracts, less funding to date. Unfunded backlog includes all contract options that have been priced but not yet funded. Estimates of future revenues attributed to backlog are not necessarily precise and the receipt and timing of any ~~of these revenues are subject to various contingencies such as changed federal government spending priorities, many of which are beyond our control~~period. ~~The backlog on a given contract may not ultimately be funded or may only be partially funded, which may cause our revenues to be lower than anticipated.~~

~~Because~~(d) ~~government~~We ~~contracts~~have included certain financial measures in this prospectus that are ~~subject~~not recognized under U.S. GAAP, including earnings before interest, income taxes, depreciation and amortization, which we refer to as EBITDA and Consolidated EBITDA, which is defined in our Existing Credit Agreements. We believe that the presentation of EBITDA and Consolidated EBITDA enhances an investor’s understanding of our financial performance. We believe EBITDA is useful in assessing operating performance and in comparing our performance to other companies in the same industry. EBITDA is a common financial metric in the government ~~audits~~contracting industry, ~~contract~~in ~~payments~~part ~~are~~because ~~subject~~it excludes from performance the effects of a company’s capital structure, in particular taxes and interest. In addition, we believe Consolidated EBITDA can be useful in evaluating our ability to ~~adjustment~~ meet our debt covenants. Consolidated EBITDA information for the trailing four-quarters is used by management and ~~repayment~~is important to our security holders as our Existing Credit Agreements require that we achieve minimum trailing four-quarter Consolidated EBITDA levels and maintain a minimum one-to-one fixed charge coverage ratio, which ~~may~~is ~~result~~also measured on a trailing four- quarter basis at the end of each quarter. EBITDA and Consolidated EBITDA are not measures under U.S. GAAP and our use of the terms EBITDA and Consolidated EBITDA varies from others in ~~revenues~~our ~~attributed~~industry. EBITDA and Consolidated EBITDA should not be considered as alternatives to ~~a contract~~net ~~being~~income ~~lower~~(loss), ~~than~~operating ~~expected~~income or any other performance measures derived in accordance with U. S. GAAP, as measures of operating performance or operating cash flows or as measures of liquidity.

~~Government~~EBITDA ~~contract payments received that are in excess of allowable costs are subject to adjustment~~ and ~~repayment~~ ~~after~~Consolidated ~~audit~~EBITDA ~~by government auditors. Government audits~~ have ~~been~~material ~~completed~~limitations onas ~~indirect~~analytical ~~costs~~tools ~~related to our federal government contracts through September 30, 2000,~~ and ~~are continuing~~you ~~for~~should ~~subsequent~~not ~~periods.~~consider ~~We have included estimated~~them ~~reserves~~ in ~~our~~isolation ~~financial~~or ~~statements~~as substitutes for ~~excess~~analysis ~~billings~~of ~~and contract losses, which we believe are adequate based on~~ our ~~interpretation~~ ofresults ~~contracting~~as ~~regulations~~reported ~~and~~under ~~past experience~~U. ~~These~~S. ~~reserves, however, may not be adequate~~GAAP. IfFor ~~our reserves are not adequate~~example, ~~revenues~~EBITDA ~~attributed~~and toConsolidated aEBITDA: ~~contract may be lower than expected.~~

~~Failure~~• todo ~~perform~~not ~~contractual~~reflect ~~obligations by~~any ~~our~~cash ~~subcontractors~~capital ~~could~~expenditure ~~adversely~~requirements ~~affect~~for ~~our~~assets ~~performance~~being depreciated and ~~reputation~~ asamortized athat ~~prime~~may ~~contractor~~have ~~and~~to ~~our~~be ~~ability~~replaced toin ~~obtain future~~the ~~business.~~ future;

As• ado ~~prime~~not ~~contractor,~~reflect wechanges ~~often~~in, ~~rely significantly upon other companies as subcontractors to perform work we are obligated to deliver to our sponsors. A failure by one~~ or ~~more~~cash ofrequirements ~~our~~for, ~~subcontractors to satisfactorily perform the agreed-upon services on a timely basis may materially and adversely affect~~ our ~~ability~~working tocapital ~~perform~~needs; ~~our duties as a prime contractor. We have limited involvement in the work performed by~~ and

•

do not reflect the significant interest expense, or the cash requirements necessary to service interest or principal payments, on our debt.

In addition, Consolidated EBITDA, as defined in the Existing Credit Agreements, reflects the cash impact relating to the Company’s ESOP and other long-term incentive plans (by adding back non-cash items and subtracting cash items that had been previously included in Consolidated EBITDA in prior periods), while EBITDA does not reflect such adjustments.

~~our~~The ~~subcontractors,~~following ~~and~~table asprovides a ~~result,~~reconciliation ~~we may have exposure to problems incurred by our subcontractors. Performance deficiencies on the part~~ of our ~~subcontractors~~net ~~could~~loss ~~result~~to inEBITDA ~~a government~~and ~~sponsor terminating our contract for default. A~~Consolidated ~~default~~EBITDA ~~termination could expose us to liability~~ for the ~~sponsor’s~~ ~~costs~~periods ofpresented: ~~reprocurement, damage our reputation, and hurt our ability to compete for future contracts.~~

If we fail to recover pre-contract costs, it may result in reduced fees or in losses.


	Twelve Months Ended December 31, 2014			Three Months Ended December 31,						Fiscal Years Ended September 30,
	Twelve Months Ended December 31, 2014			2014			2013			2014			2013			2012
	(Dollars in thousands)
Net loss	$	(35,417	)	$	(9,883	)	$	(18,462	)	$	(43,996	)	$	(36,592	)	$	(41,447	)
Interest expense		85,068			22,353			18,948			81,662			75,700			74,934
Income tax expense		6,980			1,746			1,745			6,980			6,977			6,974
Depreciation and amortization		4,533			1,050			1,305			4,789			7,348			11,717

EBITDA	$	61,164		$	15,266		$	3,536		$	49,435		$	53,433		$	52,178

Gain on asset sales		(1,500	)		—			—			(1,500	)		(157	)		(104	)
Debt extinguishment gain		11,458			—			—			11,458			(3,913	)		—
Change in fair value of warrants(1)		(10,094	)		(201	)		—			(9,894	)		—			—
Non-cash stock-based compensation expense (credit)		(21	)		1			1			(21	)		(219	)		(90	)
Non-cash LTIP expense (credit)		1,744			626			804			1,922			2,281			1,400
Non-cash ESOP and 401(k) contributions		14,174			3,555			3,576			14,195			13,844			13,735
Employee salary deferrals used to purchase Alion common stock		—			—			—			—			1,968			2,427
Cash paid for ESOP obligations		(457	)		(13	)		(238	)		(682	)		(1,636	)		(857	)
Cash paid for stock-based compensation		—			—			—			—			—			—
Cash paid for LTIP grants		(1,858	)		—			—			(1,858	)		(1,843	)		(1,869	)
Non-recurring expenses		(2,293	)		—			7,216			4,923			7,242			4,934

Consolidated EBITDA	$	72,316		$	19,234		$	14,895		$	67,978		$	71,000		$	71,754

Consolidated EBITDA margin		8.5	%		8.4	%		8.0	%		8.4	%		8.4	%		8.8	%

~~Any~~(1) ~~costs~~The we2014 ~~incur~~Warrants ~~before~~are ~~the~~derivative ~~execution~~instruments ofmeasured ~~a contract or contract renewal are incurred~~ at ~~our~~fair ~~risk, and it is possible that the sponsor will not reimburse us for these pre-contract costs~~value. AtTheir ~~May 10,~~initial ~~2002,~~fair wevalue ~~had~~was ~~pre-contract costs of~~ $616.0 4 million. ~~While~~From ~~such~~August ~~costs~~2014 ~~were~~to ~~associated with~~September a2014 ~~specific~~the ~~anticipated~~estimated ~~contract~~value ~~and~~of ~~their~~the ~~recoverability from~~shares ~~such~~underlying ~~contract~~the is2014 ~~probable,~~Warrants wedeclined. ~~cannot~~From beOctober ~~certain~~2014 ~~that contracts~~through orDecember ~~contract~~2014, ~~renewals~~the ~~will~~risk befree ~~executed~~interest orrate ~~that~~used weto ~~will recover~~value the ~~related~~2014 ~~pre-contract~~Warrants ~~costs~~declined.

Our Existing Credit IfAgreements wedefine doConsolidated ~~not~~EBITDA. ~~accurately~~Each ~~estimate~~quarter the ~~expenses,~~ ~~time~~Company ~~and~~must ~~resources~~achieve ~~necessary~~$50 million in minimum Consolidated EBITDA (on a trailing twelve-month basis) in order to ~~satisfy~~maintain ~~our~~access to the Existing Revolving Credit Facility and avoid potential ~~contractual~~cross ~~obligations~~default under Alion’s other debt instruments. Alion exceeded the requirement by approximately $22.3 million for the twelve months ended December 31, ~~our~~2014. ~~revenues~~Neither ~~will~~EBITDA benor ~~lower~~Consolidated ~~than~~EBITDA is a measure of financial performance in ~~expected~~accordance with generally accepted accounting principles. The Existing Credit Agreements permit Alion to exclude certain expenses and requires it to exclude certain one-time gains when computing Consolidated EBITDA.

~~Cost-plus~~(e) ~~contracts~~Total ~~provided~~debt ~~59 percent~~as of ~~our~~ ~~revenues~~December ~~for~~31, ~~the~~2014 ~~fiscal~~and ~~year ended~~ September 30, ~~2001 and~~2014 ~~60 percent~~consisted of obligations under the Existing Debt Instruments, as well as that portion of our ~~revenues~~Unsecured ~~for~~Notes that remained outstanding after the ~~24-week~~2014 ~~period~~Refinancing, ~~ended March~~which 15were repaid in January 2015, ~~2002.~~and ~~Fixed-price~~is ~~contracts~~net ~~provided~~of ~~23 percent our~~unamortized ~~revenues~~debt ~~for~~issue ~~the~~costs ~~fiscal~~and ~~year~~original ~~ended~~issue discount. Total debt as of September 30, ~~2001 and~~2013 ~~18 percent~~consisted of ~~revenues~~obligations ~~for~~under ~~the~~our ~~24-week~~prior ~~period~~revolving ~~ended March 15~~credit facility, ~~2002~~our Secured Notes and our Unsecured Notes, as well as accrued PIK interest, and is net of unamortized debt issue costs and original issue discount.

In a cost-plus contract, we are allowed to recover our approved costs plus a fee. The total price on a cost-plus contract is based primarily on allowable costs incurred, but generally is subject to a maximum contract funding limit. Federal government regulations require us to notify our sponsors of any cost overruns or underruns on a cost-plus contract. If we incur costs in excess of the funding limitation specified in the contract, we may not be able to recover those cost overruns. As a result, on a cost-plus contract we may not earn the fee anticipated.

In a fixed-price contract, we estimate the costs of the project and agree to deliver the project for a definite, predetermined price regardless of our actual costs to be incurred over the life of the project. We must fully absorb cost overruns. Our failure to anticipate technical problems, estimate costs accurately or control costs during performance of a fixed-price contract may reduce the fee margin of a fixed-price contract or cause a loss. Although we have not historically experienced significant contract losses on fixed-price contracts, the provisions in our financial statements for estimated losses on our fixed-price contracts may not be adequate to cover all actual future losses.

As a federal government contractor, we must comply with complex procurement laws and regulations and our failure to do so could have a material adverse impact upon our business.

We must comply with and are affected by laws and regulations relating to the formation, administration and performance of federal government contracts, which may impose added costs on our business. If a government review or investigation uncovers improper or illegal activities, we may be subject to civil and criminal penalties and administrative sanctions, including termination of contracts, forfeiture of fees, suspension of payments, fines and suspension or debarment from doing business with federal government agencies, which may materially adversely affect our ability to conduct our business. To the knowledge of management, we are not at present the subject of any investigation that may adversely affect our ability to secure future government work.

Our failure to obtain and maintain necessary security clearances may limit our ability to carry out confidential work for government sponsors, which could have an adverse effect on our revenues.

Some of our government contracts require us to maintain facility security clearances, and require some of our employees to maintain individual security clearances. If we lose a facility clearance or our employees lose or are unable to timely obtain security clearances, the government sponsor can terminate the contract or decide not to renew it upon its expiration. If we cannot obtain the required security clearances for our facilities or employees, or we fail to obtain them on a timely basis, we may be unable to

~~perform~~RISK ~~the~~FACTORS ~~contract, bid on or win new contracts, which could have a material adverse effect on our current research activities, reputation and financial condition.~~

WeAn ~~derive~~investment ~~significant~~in ~~revenues~~our ~~from contracts~~common ~~awarded~~stock ~~through~~involves a ~~competitive~~high ~~bidding~~degree ~~process~~of ~~which~~risk. isYou should carefully consider the following risks as well as the other aninformation ~~inherently~~included ~~unpredictable~~in ~~process~~this prospectus, including under “Selected Consolidated Financial Data”, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated and combined financial statements, as applicable, and related notes included elsewhere in this prospectus, before investing in our common stock. Any of the following risks could materially and adversely affect our business, financial condition or results of operations. In such a case, the trading price of our common stock could decline, and you may lose all or part of your investment in us.

WeRisks ~~obtain~~Related ~~most~~to ofOur ~~our~~Business ~~government~~and ~~contracts through~~Operations ~~a competitive bidding process that subjects us to risks associated with~~

•We ~~the~~depend ~~frequent need to bid~~ on ~~programs~~U.S. ingovernment ~~advance~~contracts offor ~~the~~substantially ~~completion~~all of ~~their~~our ~~design,~~revenue. ~~which~~Changes ~~may result~~ in ~~unforeseen~~the ~~technological~~contracting ~~difficulties and/~~or ~~cost~~fiscal ~~overruns;~~policies •of the ~~substantial~~U.S. government ~~time~~could ~~and~~adversely ~~effort,~~affect ~~including~~our ~~design~~business, ~~development~~financial ~~and promotional activities~~condition, ~~required~~results toof ~~prepare~~operations ~~bids~~ and ~~proposals~~ability ~~for contracts that may not be awarded~~ to ~~us;~~satisfy ~~and~~our •financial ~~the~~obligations, ~~design complexity~~ and ~~rapid~~grow ~~rate of technological advancement of most of~~ our ~~research offerings~~business.

~~Upon~~For ~~expiration~~the calendar year 2014, U.S. government contracts ~~may~~accounted ~~be subject~~for to97.3% aof ~~competitive~~our ~~rebidding~~revenue, ~~process~~with 93.8% Weof ~~may~~our ~~not~~revenue bederived from DoD ~~successful~~contracts. inThe ~~winning~~U.S. ~~contract~~Navy ~~awards~~is orour ~~renewals~~largest insingle ~~the~~customer, ~~future~~generating 54. ~~Our~~7% ~~failure~~of toour ~~renew~~calendar oryear ~~replace~~2014 ~~these~~revenue. ~~contracts~~Changes ~~when~~in ~~they~~U.S. ~~expire may~~government ~~have~~contracting apolicies ~~material~~could ~~adverse~~directly ~~effect~~affect on our ~~ability~~financial toperformance. ~~continue~~Factors ~~to provide~~that ~~substantial~~could ~~research~~materially ~~support~~adversely affect toour U.S. government ~~programs.~~ contracting business include:

~~Intense~~• ~~competition~~budgetary inconstraints ~~the~~affecting ~~technology~~U.S. ~~and defense~~government ~~industries~~spending ~~could~~generally, ~~limit~~or ~~our~~specific ~~ability~~departments toor ~~win~~agencies ~~and~~in ~~retain government contracts.~~ particular;

As• achanges ~~for-profit company we expect to encounter significant competition for government contracts from other companies, especially~~ in ~~our information technology and defense operations research units~~U.S. ~~Some~~government offiscal ~~our~~policies ~~competitors~~or ~~will~~available ~~have substantially greater financial, technical and marketing resources than we do.~~ funding;

~~Our~~• ~~ability~~U.S. togovernment ~~compete~~shutdowns, ~~for~~threatened ~~these~~shutdowns ~~contracts~~or ~~will depend~~budget ~~on:~~ delays;

• ~~the~~changes ~~effectiveness~~in ofU.S. ~~our~~government ~~research~~defense and ~~development~~homeland ~~programs;~~security ~~• our ability to offer better performance than our competitors at a lower or comparable cost~~priorities; ~~• the readiness of our facilities, equipment and personnel to perform the programs for which we compete; and • our ability to attract and retain key personnel.~~

If• wechanges doin ~~not~~U.S. ~~continue~~government toprograms ~~compete~~or ~~effectively and win contracts, our future business will be materially compromised.~~ requirements;

If• weU.S. ~~are~~government ~~unable~~curtailment toof ~~manage~~its ~~our~~use ~~growth,~~of ~~our revenues~~technology ~~may~~services ~~not increase at the same levels as they have in the past three years which will affect the value of your investment.~~ firms;

~~Our~~• ~~revenues~~adoption ~~have increased over the past three fiscal years and much~~ of ~~this~~new ~~growth~~laws, ~~was~~regulations, ~~through~~or ~~acquisitions. Our~~enforcement ~~ability to manage future growth effectively will require us:~~ policies;

• totechnological ~~attract, retain, train, motivate and manage new employees successfully~~developments; • to integrate new management and employees into our overall operations; • to continue to improve our operational, financial and management systems and controls; and • to identify and attract complementary acquisition candidates and integrate them into our overall operations.

~~Our~~• ~~failure~~competition toand ~~manage~~consolidation ~~any~~in ~~growth effectively may have a material adverse effect on~~ our ~~ability~~industry; ~~to grow our business.~~ and

•

general economic conditions.

These or other factors could cause U.S. government departments or agencies to reduce their purchases under contracts, to exercise their right to terminate contracts or fail to exercise options to renew contracts, any of which could have a material adverse effect on our business, financial condition, operating results and ability to meet our financial obligations.

Many of our U.S. government customers are subject to tightened constraints. We have substantial contracts in place with many U.S. government departments and agencies. Our continuing performance under these contracts, or the possibility of new contracts from these agencies, could be materially adversely affected by agency spending reductions or budget cutbacks. Such reductions or cutbacks could materially adversely affect our business, financial condition, operating results and ability to meet our financial obligations.

WeDelays ~~depend~~in onthe ~~key~~federal ~~management~~budget ~~and~~process, ~~personnel~~including actions related to the need to raise the debt ceiling and ~~may~~any ~~not~~future beFederal ~~able~~Government toshutdown, ~~retain~~could ~~those~~delay ~~employees~~procurement ~~due~~of, toand ~~competition~~ payment for, ~~their~~the products, services and solutions we provide and materially and adversely affect our revenue, gross margin, operating results and cash flow.

We ~~believe~~derive ~~that~~a significant portion of our ~~future~~revenue ~~success~~from ~~will~~the beFederal ~~due,~~Government and from prime contractors to the Federal Government. inWe ~~part,~~expect to continue to do so. Funding under those contracts is conditioned upon the ~~continued~~continuing ~~services~~availability of ~~our~~Congressional ~~senior~~appropriations ~~management~~and agency budgets. Congress usually appropriates funds on a fiscal year basis even though contract ~~team~~performance may extend over many years. The ~~loss~~programs ofin ~~any~~which ~~one~~we ofparticipate ~~these~~must ~~individuals~~compete ~~could~~with ~~cause~~other ~~our~~Federal Government programs and policies for funding during the budget and appropriation process. Concerns about increased deficit spending, along ~~operations~~with continued economic challenges, continue to ~~suffer~~place pressure on federal customer budgets. WeWhile dowe ~~have~~believe ~~employment~~that ~~agreements~~our programs are well aligned with national defense and other priorities, legislative shifts in domestic spending and tax policy, ~~these~~changes ~~individuals~~in ~~for~~security, ~~terms~~defense, and intelligence priorities, the affordability of upour toproducts ~~four~~and services, general economic conditions and developments, and other factors may affect a decision to ~~five~~fund ~~years~~or the level of funding for existing programs under which we perform contracts or proposed programs under which we might bid for future work. WeIn doaddition, a continuing resolution allows U.S. government agencies to operate only at spending levels equal to or less than levels approved in the ~~not~~prior budget cycle, ~~however~~which can delay or even cancel new initiatives which could adversely affect our business, ~~maintain~~financial ~~key~~condition, ~~man~~operating ~~life~~results, ~~insurance~~cash ~~policies~~flows onand ~~any~~our ability to meet our financial obligations. Even if our contracts are fully ~~members~~funded, full or partial furloughs of ~~management~~government employees may also result in delays in our customers approving or paying our invoices.

Congress’ failure to agree on deficit reduction goals and disputes on whether to increase the debt ceiling create constraints on and Inuncertainties ~~addition,~~about ~~competition~~the level of future federal spending. While specific budgetary decisions for ~~essential~~the ~~employees~~Federal Government’s next fiscal year are not yet known, such asconstraints ~~scientists~~could delay or cancel key programs in which we are involved and ~~engineers~~could materially and adversely affect our cash flows, isliquidity ~~intense~~and operating results. ~~Our~~If ~~ability~~the federal budget process were to ~~implement~~ ~~our~~result ~~business~~in ~~plan~~a isprolonged ~~dependent~~Federal onGovernment ~~our~~shutdown, ~~ability~~we tocould ~~hire and~~incur ~~retain~~substantial ~~these~~unreimbursed ~~technically~~labor ~~skilled~~or ~~professionals.~~other ~~Our~~costs, ~~failure~~or it could delay toor ~~recruit~~cancel ~~and~~key ~~retain~~programs, ~~qualified~~which ~~scientists~~could materially and ~~engineers may~~ adversely affect our ~~ability~~operating toresults, ~~obtain~~cash flow and ~~perform future contracts~~liquidity.

In addition, when the ~~Environmental~~U.S. ~~laws~~government requires supplemental appropriations to operate or fund specific programs, and ~~regulations~~legislation to approve any supplemental appropriation bill is delayed, credit markets can react adversely to the uncertainty. Budgetary uncertainties and our lower credit rating could materially and adversely affect our access to credit and our overall liquidity. If we were to use ofour ~~hazardous~~revolving ~~materials~~credit ~~may~~facility ~~subject~~to a greater extent and for greater amounts than we have in the recent past, this could also increase the cost of credit to us if our floating interest rates were to ~~significant liabilities~~rise.

~~Our~~The ~~operations~~Budget ~~are~~Control ~~subject~~Act toof ~~federal,~~2011 ~~state and~~caused ~~local~~significant ~~environmental~~delays ~~laws~~or ~~and~~reductions ~~regulations,~~in asFederal ~~well~~Government ~~as environmental~~appropriations ~~laws~~for ~~and~~our ~~regulations~~current inand ~~the~~future ~~various~~programs ~~countries~~and ~~in which~~may wecontinue ~~operate.~~to Innegatively ~~addition,~~affect our ~~operations~~revenue ~~are~~and ~~subject~~materially ~~to environmental laws~~ and ~~regulations~~adversely ~~relating~~affect toour ~~the~~financial ~~discharge~~condition, ~~storage,~~ ~~treatment,~~operating ~~handling~~results, ~~disposal~~cash flows and ~~remediation~~ability ~~of regulated~~to ~~substances~~satisfy ~~and~~our ~~waste~~financial ~~products~~obligations, ~~such~~and asgrow ~~radioactive materials~~our ~~and explosives~~business. ~~The following may require us to incur substantial costs in the future:~~

•In ~~modifications~~August 2011, Congress enacted the Budget Control Act intended to ~~current~~significantly ~~laws~~reduce ~~and~~the ~~regulations;~~federal •deficit ~~new~~over ~~laws~~ten ~~and~~years. ~~regulations;~~The •Budget ~~new~~Control ~~guidance~~Act orestablished ~~new~~discretionary ~~interpretation~~spending ofcaps ~~existing~~through ~~laws~~2021 and ~~regulations;~~a orJoint •Committee ~~the~~of ~~discovery~~Congress ofto ~~previously~~identify ~~unknown~~additional ~~contamination~~deficit reductions.

~~Some~~Although ~~risks~~we ~~relate~~believe ~~to the possibility of damages or personal injuries caused by the escape into the environment of regulated substances that~~ we ~~use~~are inwell-positioned ~~our research activities or that our sponsors use~~ in ~~their~~areas ~~activities. Others relate to~~ the ~~possibility~~DoD ofhas ~~remediation~~indicated ~~costs,~~are ~~fines,~~the ~~and~~focus ~~penalties imposed under environmental laws and regulations~~ for ~~any contamination~~future atdefense ~~our~~spending, ~~past~~the orBudget ~~present~~Control ~~facilities and at third~~Act ~~party~~may ~~sites~~continue ~~and for liabilities~~ to ~~sponsors~~have ~~and~~a tonegative ~~third~~impact ~~parties for damages arising from performing contract research. Environmental laws sometimes impose strict liability, without regard to negligence or fault,~~ on ~~those~~our ~~who~~business ~~handle~~and ~~regulated substances~~industry.

~~Although~~Management acannot ~~significant~~forecast ~~portion~~whether ofgovernment ~~our~~shutdowns ~~ongoing~~will disrupt ~~environmental~~our ~~costs~~business ~~are recoverable from other parties~~ or ~~allowable~~ asadversely ~~costs~~affect ~~under~~timing ~~the terms~~ of ~~many~~collection of our ~~federal government~~receivables ~~contracts, we may incur material unrecoverable or unallowable costs~~ in the future~~. In addition~~, ~~environmental costs~~but we ~~expect~~did toexperience besignificant ~~reimbursed~~payment bydelays ~~other~~as ~~parties~~a orresult ~~allowed~~of ~~as charges~~the ~~in federal~~ government ~~contracts~~shutdown ~~may~~that ~~not~~occurred inimmediately ~~fact~~after ~~be reimbursed~~the orend ~~allowed.~~of Afiscal ~~decline~~year in2013. ~~such~~Earlier ~~reimbursement or~~in ~~allowability~~fiscal ~~could~~year ~~have a material adverse effect on our financial condition and results of operations.~~

In order to succeed, we will have to keep up with rapid technological change in a number of industries and various factors could impact our ability to keep pace with these changes.

Our success will depend on our ability to keep pace with technology changes in the following research fields:

• wireless communications, • defense operations, • information technology, • industrial technology, • chemical, environmental and biological defense technology,

• 2013, ~~explosive~~the ~~science,~~Federal ~~and~~Government •altered ~~transportation~~some ~~technology~~of its accelerated payment practices which affected the overall payment cycle of our invoices. It took us until the fourth quarter of fiscal year 2013 to recover from most of the effects of these changes.

We ~~Technologies~~face inintense ~~these~~competition ~~fields~~from ~~change~~many ~~rapidly. Even~~companies ifthat wehave ~~remain~~greater ~~abreast~~resources ~~of the latest developments and~~than ~~available~~we ~~technology,~~do. ~~the~~This ~~introduction of new services in these industries~~ could ~~adversely~~cause ~~affect~~price ~~us.~~reductions, ~~The~~reduced ~~integration~~contract of diverse technologies involved in our research services is complex and in many instances has not been previously attempted. Our success as a for-profit company will depend significantly on our ability to developprofitability, ~~integrate~~ and ~~deliver~~loss ~~technologically advanced products and services at the same pace as our competitors, many~~ of ~~which have~~market ~~greater resources than we do~~share.

We operate in highly ~~Actual~~competitive ormarkets ~~perceived~~and ~~conflicts~~often encounter intense competition to win contracts. If we are unable to successfully compete for new business, our revenue may not grow and operating margins may decline. Many of ~~interest~~our competitors have greater financial, ~~may~~technical, ~~prevent~~marketing, usand ~~from~~public ~~being~~relations ~~able~~resources, tohave ~~bid~~larger onclient bases and have greater brand or ~~perform contracts~~name recognition than we do. Main competitors include, but are not limited to, U.S. federal systems integrators and service providers such as Booz Allen Hamilton, CACI International, Leidos Holdings, Science Applications International Corporation, ManTech International, NCI, Engility and the NAPS segment of Computer Sciences Corporation.

~~Government~~Our ~~agencies~~main ~~have~~competitors ~~conflict~~may ofbe ~~interest policies~~able ~~that~~to ~~may~~vie ~~prevent~~more useffectively ~~from~~for ~~bidding~~very onlarge-scale orgovernment ~~performing certain~~ contracts. ~~Typically,~~Our amain ~~conflict~~competitors ofalso ~~interest~~may ~~policy prohibits~~be aable ~~contractor that assisted the government agency in~~to ~~the~~provide ~~design~~clients ofwith adifferent ~~program and/~~or ~~the~~greater ~~associated~~capabilities ~~procurement process~~or ~~from~~benefits ~~competing~~than towe ~~perform~~can ~~the~~provide ~~resulting~~in ~~contract.~~areas ~~When dealing~~such ~~with~~as ~~government~~technical ~~agencies~~qualifications, ~~that~~past ~~have~~performance ~~conflict~~on oflarge-scale ~~interest policies~~contracts, wegeographic ~~must decide~~presence, ~~at times with insufficient information~~price, ~~whether to participate in the design process~~ and ~~lose~~ ~~the~~availability ~~chance~~ of ~~performing~~key ~~the~~professional ~~contract or to turn down the~~personnel. ~~opportunity~~Our tocompetitors ~~assist in the design process for the chance at bidding on the contract. We~~ have, onestablished ~~occasion,~~relationships ~~declined~~among tothemselves ~~bid on particular projects because of actual~~ or ~~perceived~~with ~~conflicts of~~third ~~interest~~parties, ~~and~~including wethrough ~~are~~mergers ~~likely~~and ~~to continue encountering such conflicts of interest in the future~~acquisitions, ~~particularly~~to ifincrease wetheir ~~acquire other~~ability ~~government~~to ~~contractors~~address inclient ~~the future~~needs. ~~Future~~They ~~conflicts~~may ~~of interest~~establish ~~could~~new ~~adversely~~relationships, ~~affect~~and ~~our~~new ~~ability~~competitors ~~to secure key~~or ~~research~~competitive ~~and~~alliances ~~technology~~may ~~contracts with government sponsors~~emerge.

WeOur ~~may~~ability ~~not~~to becompete ~~successful~~for desirable contracts will depend in ~~running~~large part on the effectiveness of our ~~business~~internal inand acustomer-funded research and development programs, our ability to offer better performance than our competitors at lower or comparable cost, the readiness of our facilities, equipment and personnel to perform the programs for~~-profit~~ ~~environment~~which we compete, our ability to attract and retain key personnel, our financial viability as assessed by government contracting officers and our ability to write superior proposals. If we do not continue to compete effectively and win contracts, our future business, financial condition, results of operations and our ability to meet our financial obligations will be materially compromised.

~~After the acquisition we may not be successful in making the transition from being a not-for-profit corporation to being a for-profit corporation~~Historically, ~~and we may not be able to operate our business profitably. As~~ a ~~for-profit~~few ~~corporation, competition~~contracts tohave ~~design~~provided ~~and~~most ~~deliver products and services may intensify, which may require us to develop products and services outside~~ of our ~~traditional research activities~~revenue. ~~After~~If ~~the acquisition~~ we ~~will~~do nonot ~~longer~~retain ~~be associated with the Illinois Institute of Technology~~ or ~~any~~replace ~~other~~these ~~academic institution~~contracts, ~~which may negatively affect~~ our ~~reputation~~operations ~~with some sponsors~~ and ~~employees.~~financial Ifcondition ~~we are not able to adapt to the for-profit environment, the value of your investment~~ will ~~decline~~suffer.

The ~~carrying~~following ~~value~~five Federal Government contracts (contract vehicles and stand-alone contracts) accounted for more than half of our ~~assets~~revenue ~~could~~in ~~be subject~~fiscal toyears ~~impairment~~2014, ~~write-down~~2013 and 2012.

~~Effective January~~ 1, 2002, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards 142, Goodwill and Other Intangible Assets establishing a new standard of accounting for goodwill acquired in business combinations. ~~SFAS~~Weapons ~~142~~System ~~requires recognition~~Technology ofInformation ~~goodwill~~Analysis asCenter an asset, but does not permit amortization of this goodwill. As a result, SFAS 142 could make our acquisition-related charges less predictable in any given reporting period. Using a fair-value based approach, goodwill will be separately tested at least once per year for ~~impairment when an event occurs indicating~~ the ~~potential~~Defense ~~for~~Technical ~~impairment.~~and ~~If the~~Information ~~carrying~~Center ~~value of our goodwill~~(26%, ~~which we estimate will be approximately $74.2 million on a pro forma basis after the acquisition~~28%, ~~exceeds~~17%) ~~the~~(Defense ~~fair~~Technical ~~value~~Information atCenter ~~some~~Indefinite ~~time in the future~~Delivery, we ~~would~~Indefinite beQuantity ~~required~~(IDIQ) tocontract report goodwill impairment charges as an operating expense in the income statement. The change from an amortization approach to an impairment approach applies to goodwill related to the acquisition, as well as goodwill arising from acquisitions completed after the application of the new standard. vehicle);

~~Effective as of the first day after the completion of the acquisition, our goodwill amortization charges will cease~~2. InSeaport-E ~~the~~Multiple ~~future,~~Award itContract isfor ~~possible we may incur larger impairment charges related to~~ the ~~goodwill~~Naval ~~related~~Sea toSystems ~~the acquisition~~Command ~~or arising out of future acquisitions. As a result~~(21%, ~~our~~ ~~future earnings may be subject to significant volatility~~21%, ~~particularly~~ on20%) a(IDIQ ~~period-to-period~~contract ~~basis, which could adversely affect our results of operations.~~ vehicle);

Technical and Analytical Support for the U.S. Air Force (9%, 8%, 10%) (stand-alone contract);

Naval Sea Systems Command Surface Ships Life Cycle Program Management and Engineering Support (7%, 7%, 6%) (stand-alone contract); and

Software, Networks, Information, Modeling and Simulation for the Defense Technical and Information Center (6%, 2%, 0.2%) (IDIQ contract vehicle).

Complete or partial termination of any of these contracts or any related follow-on contracts, stoppage of new tasking under these contracts or our inability to renew or replace them when they expire could cause our revenue to decrease and could have a material adverse effect on our business, financial condition, operating results or ability to meet our financial obligations.

~~Special~~If ~~Note~~we ~~Regarding~~are ~~Forward-Looking~~unable to achieve or manage growth, our business could be materially adversely ~~Statements~~ affected.

~~This~~Attempting ~~prospectus~~to ~~contains~~achieve ~~forward~~long-~~looking statements~~term ~~that~~growth ~~involve~~has ~~risks~~placed ~~and~~significant ~~uncertainties.~~demands ~~These statements~~on ~~relate~~our tomanagement, ~~our~~and ~~future~~on ~~plans,~~our ~~objectives~~administrative, ~~expectations~~ ~~and~~operational ~~intentions~~ and ~~are~~financial ~~for illustrative purposes only~~resources. ~~These statements~~To ~~may~~achieve beand ~~identified~~manage bygrowth, ~~the~~we ~~use~~must ofimprove ~~words~~operational, ~~such~~financial ~~as “believe,”~~and ~~“expect,”~~management ~~“intend,” “plan,”~~information ~~“anticipate~~systems,” ~~“likely,” “will,”~~and ~~“pro forma~~expand,” ~~“forecast,” “projections,”~~motivate and ~~similar~~manage ~~expressions~~our workforce. ~~Our~~If ~~actual results~~we ~~may~~are ~~differ~~unable ~~significantly~~to ~~from~~achieve ~~the~~and ~~results~~manage ~~discussed~~growth inwithout ~~these~~compromising ~~forward-looking~~our ~~statements.~~quality ~~Factors~~of ~~that~~service ~~could~~and ~~contribute to~~our ~~such~~profit ~~differences include~~margins, ~~but~~or ~~are~~if ~~not~~systems ~~limited~~we implement to, ~~those discussed~~aid in ~~the~~managing ~~risk~~our ~~factors~~growth ~~above~~do ~~and elsewhere in this prospectus. We are~~ not ~~undertaking~~produce ~~any~~expected ~~obligation~~benefits, ~~to update these factors or to publicly announce any changes to~~ our ~~forward-looking~~ ~~statements~~business, ~~due~~prospects, tofinancial ~~future~~condition, ~~events~~and oroperating ~~developments. You~~results ~~are~~could ~~cautioned~~be ~~not~~materially ~~to place undue reliance on these~~adversely ~~forward-looking statements~~affected.

We may lose one or more members of our senior management team or fail to develop new leaders, which could cause the disruption of the management of our business.

We believe that the future success of our business and our ability to operate profitably depends on the continued contributions of the members of our senior management and the continued development of new members of senior management. We rely on our senior management to generate business and execute programs successfully. In addition, the relationships and reputation that many members of our senior management team have established and maintain with our clients are important to our business and our ability to identify new business opportunities. The loss of any member of our senior management or our failure to continue to develop new members could impair our ability to identify and secure new contracts, to maintain good client relations, and to otherwise manage our business. We do not maintain key man life insurance policies on any members of management.

Our business could suffer if we fail to attract, train and retain skilled employees.

Availability of highly trained and skilled professional, administrative and technical personnel is critical to our future growth and profitability. Competition in our industry for scientists, engineers, technicians, management and professional personnel is intense and competitors aggressively recruit key employees. Competition for experienced personnel, particularly in highly specialized areas, has made it more difficult for us to timely meet all our staffing needs. We cannot be certain we will be able to attract and retain required staff on acceptable terms. Any failure to do so could have a material adverse effect on our business, financial condition, operating results and our ability to meet our financial obligations. Failure to recruit and retain a sufficient number of these employees could adversely affect our ability to maintain or grow our business. In some cases, our customers require us to staff a program with personnel that the customer considers to be key to successful performance of their contract. If we cannot provide these key personnel or acceptable substitutes, the customer may terminate the contract, and we may not be able to recover our costs on the contract or lose potential business in the future.

Our subcontractors’ failure to perform contractual obligations could damage our reputation as a prime contractor and our ability to obtain future business.

As a prime contractor, we often rely significantly upon other companies as subcontractors to perform work we are obligated to deliver to our customers. A failure by one or more of our subcontractors to timely perform services satisfactorily could cause us to be unable to perform our duties as a prime contractor. We have limited involvement in the work our subcontractors perform, but we may have exposure to problems our subcontractors cause. Subcontractor performance deficiencies could result in a government customer terminating our contract for default. A default termination could make us liable for customer re-procurement costs, and other breach of contract damages, damage our reputation, and hurt our ability to compete for future contracts. Subcontractor work has accounted, and we expect it will continue to account, for a material portion of our work. In fiscal year 2014, subcontractor expense, as a percentage of our revenue, was 39%.

Further adverse changes in market conditions, the stock market, the merger and acquisition environment in our industry or Federal Government budget constraints could adversely affect the value of our operating businesses which could cause us to recognize a goodwill impairment charge in the future.

If market conditions were to become unfavorable, if merger and acquisition activity in our industry were to occur at significantly lower valuations, or we are unable to increase revenue and operating profit, the value of our

Soperating ~~Corporation~~businesses ~~Status~~could be adversely affected and we might have to recognize an impairment charge to the significant goodwill we have from acquisitions. An impairment charge could have a material adverse effect on our operating results.

~~The~~Our ~~Internal~~employees ~~Revenue~~may ~~Code~~engage ~~provides~~in ~~that~~misconduct ~~a corporation~~or ~~that~~other ~~meets~~improper ~~certain~~activities, ~~requirements~~which ~~may elect to be~~could ~~taxed~~harm asour ~~an S Corporation for federal income tax purposes~~business. ~~These~~ ~~requirements provide that an S corporation may only have:~~

•We ~~one~~are ~~class~~exposed to the risk of ~~stock~~employee (fraud or other ~~than~~misconduct. ~~stock~~Employee ~~that~~misconduct ~~differs~~could ~~solely~~include intentional asfailures to ~~voting~~comply ~~rights);~~with •U.S. upgovernment procurement laws or regulations, failure to 75comply ~~shareholders;~~with regulations regarding the use and •safeguarding ~~some~~of ~~types~~classified or other protected information, failure to comply with laws and regulations relating to environmental, health or safety matters, attempts to obtain reimbursement for improper expenses, submission of ~~shareholders~~falsified time records or other unauthorized activities. Employee misconduct could also involve improper release or use of our customers’ sensitive or classified information, ~~such~~which could result in regulatory sanctions against us and serious harm to our reputation. The precautions we take to prevent employee misconduct may not prevent all misconduct, and as ~~individuals~~a result, ~~trusts~~we could face unknown risks or losses. Misconduct by any of our employees could damage our reputation and ~~some~~subject ~~tax-exempt~~us ~~organizations~~to civil, criminal and/or administrative penalties including ~~ESOPs~~fines and penalties, restitution or other damages, loss of security clearance, loss of current and future customer contracts and suspension or debarment from contracting with federal, state or local government agencies, any of which would adversely affect our business, reputation and our future results. Employees, even employees engaged in improper activities, could take “whistleblower” actions that could result in or exacerbate such adverse results.

~~After~~Our ~~the~~operations ~~purchase~~involve ofseveral risks and hazards, including potential dangers to our ~~stock~~employees byand ~~the~~to ~~ESOP,~~third parties that are inherent in ~~which~~aspects ~~will~~of ~~count~~our asbusiness. ~~one~~If ~~shareholder~~we ~~for~~do ~~S corporation purposes~~not adequately insure against these risks, weunanticipated ~~should~~losses ~~meet~~could ~~the~~materially ~~requirements~~and toadversely beaffect ~~taxed~~our asfinancial ~~an S corporation~~condition and operating results.

~~Newtek~~Our ~~filed~~business anincludes ~~election with~~ the ~~IRS~~maintenance toof ~~be treated~~global asnetworks anand ~~S corporation~~the ~~under~~provision ~~the~~of ~~Internal~~services ~~Revenue Code.~~that ~~For~~require ~~federal~~us ~~income~~to ~~tax~~dispatch ~~purposes,~~employees anto ~~S corporation,~~various ~~unlike~~countries aaround ~~C corporation,~~the ~~generally~~world. ~~does~~These ~~not~~countries ~~pay~~may ~~federal corporate~~be ~~income~~experiencing ~~tax~~political onupheaval ~~its~~or ~~net income~~unrest, ~~but~~and ~~rather~~in ~~such~~some ~~income is~~cases ~~allocated~~war toor ~~the~~terrorism. ~~S corporation’s~~It ~~shareholders,~~is ~~and the~~possible ~~shareholders~~that ~~must~~certain ~~take~~of ~~into~~our ~~account~~employees ~~their~~or ~~allocable~~executives ~~share~~will ~~of the~~suffer ~~income~~injury ~~when~~or ~~filing~~bodily ~~their~~harm, ~~income~~or ~~tax~~be ~~returns.~~killed Inor kidnapped in the ~~case~~course of a ~~shareholder~~these ~~that~~deployments. isWe ancould ~~ESOP,~~also ~~the~~encounter ~~ESOP,~~unexpected ~~because~~costs itfor isreasons ~~a tax-exempt~~beyond ~~entity,~~our ~~does~~control ~~not~~in ~~pay~~connection ~~tax~~with onthe ~~its~~repatriation ~~allocable share~~ of ~~income.~~ ~~Because~~our ~~neither~~employees weor ~~nor~~executives. ~~the~~Any ~~ESOP~~of ~~should~~these betypes ~~required~~of ~~to pay~~accidents ~~federal~~or ~~corporate~~other ~~income~~incidents ~~tax,~~could weinvolve significant ~~expect~~potential toclaims ~~have substantially~~of ~~more~~employees, ~~cash~~executives ~~available~~and/or tothird ~~repay~~parties ~~our~~who ~~debt~~are ~~and~~injured ~~invest in~~or ~~our~~killed ~~operations~~or ~~than~~who wemay ~~would~~have ifwrongful ~~Newtek~~death ~~were~~or tosimilar beclaims ~~taxed~~against ~~as a C corporation~~us.

~~Many~~We ~~states~~maintain ~~follow~~insurance ~~the~~against ~~federal~~risk ~~tax~~and ~~treatment~~potential ~~of S corporations~~liabilities related to our operations. ItWe isbelieve ~~possible,~~we ~~however,~~maintain ~~that~~reasonable inlevels ~~some~~of insurance ~~states~~that welimit our likely exposure to unanticipated losses. Our insurance coverage may not be ~~compelled~~adequate to ~~elect~~cover ~~different~~claims ~~tax~~or ~~treatment~~liabilities, ~~for state~~and ~~income~~we ~~tax~~could ~~purposes~~be ~~than~~forced ~~federal~~to ~~income~~bear ~~tax~~significant ~~purposes. Newtek~~costs ~~and~~from ~~its~~an ~~subsidiaries~~accident ~~may~~or beincident. ~~operating~~Substantial claims in ~~certain~~excess of our ~~jurisdictions~~related ~~that~~insurance ~~will~~coverage ~~subject~~could ~~the~~cause ~~corporations~~our actual results to ~~state~~differ ~~income tax~~materially and adversely from those anticipated. Due to future claims or liabilities, or to market conditions, our insurance premiums could increase.

~~Newtek will file an election under the~~ Internal ~~Revenue~~ ~~Code~~system ~~with~~or ~~the~~service ~~IRS~~failures tocould ~~treat~~disrupt ~~HFA,~~our ~~all~~business ~~the~~and ~~stock~~impair ofour ~~which will~~ability beto ~~purchased~~effectively inprovide ~~the~~our ~~acquisition,~~services ~~as an S corporation effective as of the date of closing of the acquisition. HFA will be a wholly-owned subsidiary of Newtek after the acquisition~~ and ~~thus~~ ~~should be eligible~~ products to beour ~~a qualified subchapter S subsidiary~~customers, which wecould ~~refer~~damage toour asreputation ~~a Q-Sub, within the meaning of the Internal Revenue Code. As a Q-Sub, HFA should not be treated as a separate corporation for federal income tax purposes,~~ and ~~all~~adversely ofaffect ~~HFA’s~~our ~~assets and liabilities~~revenue, ~~and~~profitability ~~all of HFA’s items of income, deduction~~ and ~~credit~~operating ~~should be treated as assets and liabilities, and items of income, deduction and credit of Newtek for federal income tax purposes~~results.

Our Atinformation ~~the~~technology ~~closing~~systems ofare ~~the~~subject ~~acquisition,~~to ~~our~~systems ~~board of directors and State Street~~failures, ~~the~~including ~~ESOP trustee~~network, ~~will~~software ~~receive~~or ~~an opinion~~hardware ~~from Baker & McKenzie~~failures, ~~Washington,~~whether ~~D.C.~~caused toby ~~the effect~~us, ~~that~~third-party ~~Newtek~~service ~~should~~providers, beintruders ~~treated~~or ashackers, ancomputer Sviruses, ~~corporation~~natural ~~under the~~disasters, ~~Internal~~power ~~Revenue~~shortages ~~Code and should continue to qualify as an~~or ~~S corporation~~terrorist ~~upon completion of the acquisition~~attacks. ~~The Baker &~~Any ~~McKenzie~~such ~~opinion~~failures ~~will~~could ~~also~~cause ~~provide~~loss ~~that~~of ~~HFA should~~data beand ~~treated~~interruptions asor adelays ~~Q-Sub~~in ~~under~~our ~~the~~business, ~~Internal~~negatively ~~Revenue~~affect ~~Code upon~~our ~~completion~~ability ofto ~~the~~service ~~acquisition.~~our ~~This~~clients ~~opinion will be based~~ and ~~conditioned~~perform onour ~~the~~contracts, ~~final~~cause ~~terms~~us ~~and~~to ~~conditions~~incur ofremediation ~~the acquisition~~costs, ~~the~~subject ~~senior~~us ~~credit~~to ~~facilities,~~claims ~~the mezzanine note,~~and ~~the~~damage ~~subordinated~~our ~~note,~~reputation. ~~the~~Failure ~~warrants,~~or ~~and~~disruption ~~other~~of ~~executive compensation~~our ~~plans,~~communications asor ~~described~~utilities incould ~~this~~cause ~~prospectus~~us ~~and as represented~~ to ~~Baker &~~interrupt ~~McKenzie,~~or ~~Washington,~~suspend ~~D.C.~~our ~~by Newtek.~~operations ~~The~~or ~~conclusions~~otherwise ~~expressed~~adversely inaffect ~~the~~our ~~opinion~~business. ~~will~~Any ~~be conditioned~~system onor ~~the~~service ~~facts~~disruptions, ~~and~~if ~~circumstances~~not ~~relied~~anticipated ~~upon being~~ and appropriately ~~remaining~~mitigated, ~~true~~could ~~and~~have ~~accurate.~~ a

The opinion will be based upon the Internal Revenue Code, regulations promulgated thereunder and other existing precedent, all of which are subject to change, including on a retroactive basis. The opinion will not be binding upon the IRS or any other taxing authority.

~~The~~material ~~Acquisition~~adverse effect on our business including, among other things, an adverse effect on our ability to bill our customers for work performed on our contracts, collect the amounts that have been billed and produce accurate financial statements in a timely manner. Our property and business interruption insurance may be inadequate to compensate us for all losses that may occur as a result of any system or operational failure or disruption and, as a result, our results of operations could be materially and adversely affected.

~~Acquired~~Security ~~Business. Newtek~~breaches ~~and~~in ~~IITRI have entered into a purchase agreement pursuant~~sensitive toU.S. ~~which~~government ~~Newtek~~systems ~~will~~could ~~purchase~~result ~~substantially~~in ~~all~~the ~~assets,~~loss ~~rights and liabilities~~ of ~~IITRI’s~~clients ~~business~~and ~~except~~negative ~~for,~~publicity. ~~amongst others,~~

•Many ~~those~~of ~~assets~~the systems we develop, ~~rights~~install and maintain ~~liabilities~~involve ~~associated~~managing ~~with~~and ~~IITRI’s~~protecting ~~Life~~information ~~Sciences~~involved ~~Operation~~in (intelligence, national security and other ~~than~~sensitive ~~its~~or ~~deferred~~classified ~~revenues~~U.S. ~~and~~government ~~accounts~~functions. ~~receivable~~A ~~which~~security ~~Newtek~~breach ~~will~~in ~~acquire),~~one ~~and~~of •these ~~IITRI’s~~systems ~~real~~could ~~property~~cause serious harm to our business, ~~some~~damage our reputation, result in the termination of ~~which~~our wecontracts, ~~will~~and ~~lease~~prevent ~~upon~~us ~~completion~~from being eligible for further work on sensitive or classified systems for U.S. government clients. We could incur losses from such a security breach that could exceed the policy limits under our errors and omissions and product liability insurance. Damage to our reputation or limitations on our eligibility for additional work resulting from a security breach in one of the ~~acquisition~~systems we develop, install or maintain could cause us to incur remediation costs and could materially reduce our revenue. Costs we incur to address security breaches could be material and materially reduce our operating margin.

~~Purchase~~Our ~~Price.~~business ~~The aggregate~~could ~~purchase~~be ~~price~~materially wenegatively ~~will~~impacted ~~pay~~by ~~IITRI~~security ~~for~~threats ~~its~~and ~~assets~~breaches, ~~is made~~including upcybersecurity ~~of:~~threats, and other disruptions.

• a $56.0 million cash component, which consists of
	— $30.0 million from the sale of our common stock to the ESOP;	$	30.0 million
	— $26.0 million in proceeds from a loan to Newtek arranged by LaSalle Bank National Association;	$	26.0 million
• a $63.1 million debt component, which consists of
	— issuance of a promissory note, the mezzanine note, by Newtek to IITRI with a face value of $21.2 million;	$	21.2 million
	— issuance of a promissory note, the subordinated note, by Newtek to IITRI with a face value of $41.9 million;	$	41.9 million
• warrants to purchase up to 40 percent of our common stock;			Warrants
• the assumption by Newtek of IITRI’s outstanding bank debt which is projected to be approximately $11.0 million at closing.		$	11.0 million
• payment of up to $2.0 million for IITRI’s costs related to the acquisition.		$	2.0 million
		$	132.1 million	plus warrants plus assumption of additional liabilities

As a defense contractor, we face various security threats and breaches, including cybersecurity threats to gain unauthorized access to sensitive information, threats to the safety of our employees, threats to the security of our facilities and infrastructure and threats from terrorist acts. Cybersecurity experts believe that attacks are evolving and include, but are not limited to, malicious software, attempts to gain unauthorized access to data and other electronic security breaches that could lead to disruptions in mission critical systems, unauthorized release of confidential or otherwise protected information and corruption of data. As a Federal Government contractor, we are a potential target to those who want to gain unauthorized access to sensitive and classified information of the United States, including officially and non-officially sponsored acts of other countries and non-state actors.

~~Newtek~~We ~~will~~utilize ~~also~~various ~~assume~~procedures ~~IITRI’s~~and ~~contingent~~controls to monitor these threats and mitigate ~~contractual~~our ~~liabilities~~exposure to ~~AB Technologies~~such ~~related~~threats. We are subject to ~~an earnout~~frequent ~~arrangement~~and increasingly sophisticated attempts by unauthorized individuals and/or entities to obtain access to sensitive, ~~which~~protected, ~~will~~and ~~not~~even ~~exceed~~classified ~~$11~~data.~~5 million.~~ We regularly review our systems and cybersecurity protocols. We do not outsource our cybersecurity functions.

WeSeveral ~~and~~years ~~IITRI~~ago, ~~have~~an ~~agreed~~unauthorized ~~upon~~party ~~term~~was ~~sheets~~able ~~for~~to ~~the~~gain ~~principal~~access ~~terms~~to ofour ~~the~~computer ~~mezzanine~~network. ~~note,~~Management retained an independent third-party expert data security firm to assess the ~~subordinated~~nature ~~note~~and extent of unauthorized access, and to recommend remedial actions. We also asked the ~~warrants~~outside ~~but~~data security expert to recommend additional steps we ~~have~~could ~~not~~take ~~yet~~to ~~agreed~~further ~~upon~~enhance ~~definitive agreements~~our ~~for~~ability ~~those~~to ~~notes~~detect, monitor and ~~warrants~~defend against cybersecurity incidents. We notified government authorities and outside parties based on information obtained from the data security expert’s investigation.

~~Purchase~~We ~~Price Adjustments.~~undertook ~~The~~remedial ~~purchase~~actions ~~price~~based ~~will be~~on ~~increased by~~ the ~~amount~~data ofsecurity ~~the deferred revenues, the accrued payroll expenses and the accounts payable of IITRI~~expert’s ~~Life Sciences Operation at the closing date~~recommendations. ~~Such~~Our ~~additional purchase~~insurance ~~price~~carrier ~~shall~~covered beour ~~paid~~investigation bycosts ~~transferring~~subject ~~accounts receivable of IITRI’s Life Sciences Operation~~ to ~~IITRI.~~our If$250 ~~the~~thousand ~~additional purchase~~policy ~~price exceeds the accounts receivable of IITRI’s Life Sciences Operations, the excess amount shall be paid in cash to IITRI~~deductible. The purchase price will be increased by 75 percent of the net income earned by IITRI’s business, excluding its Life Sciences Operation, from October 1, 2002 to the closing of the acquisition if the closing occurs after October 15, 2002. We ~~will~~continue ~~pay this addition~~ to ~~the~~consider ~~purchase price~~additional byenhancements ~~issuing~~ to ~~IITRI~~our annetwork ~~additional subordinated note in the requisite amount~~security.

~~Excess~~There ~~Cash Proceeds.~~can Ifbe ~~employees~~no ~~elect~~assurance ~~to transfer~~that ~~more~~our ~~than~~remedial ~~$30.0~~actions ~~million,~~will upbe toeffective ~~the~~against ~~maximum~~future ~~offering amount~~attacks ofor ~~$l million,~~that ~~from their~~future ~~existing~~security ~~retirement~~breaches ~~funds to our ESOP component, then all such additional funds~~ will be prevented. ~~used~~Any byfuture ~~the~~security ~~ESOP~~breach tocould ~~purchase additional~~impact ~~shares of~~ our ~~common~~relationship ~~stock.~~with Wethe ~~may,~~customers inwhose ~~turn,~~information ~~use some~~ or ~~all~~matters ofwere the ~~additional~~subject ~~funds~~of ~~we receive from~~ the ~~sale~~breach ofor our ~~common~~ ~~stock~~other tocustomers ~~the~~and ~~ESOP~~could ~~for~~have ~~working~~a ~~capital~~material ~~and~~adverse ~~general corporate~~effect ~~purposes,~~on ~~unless~~our ~~IITRI~~business, ~~permits~~financial ~~us to contribute some~~condition orand ~~all~~results of ~~these additional funds to the cash component of the acquisition purchase price paid to IITRI~~operations. ~~This~~

~~would~~We ~~give~~may usnot ~~the~~realize ~~option to decrease~~ the full amount we ~~will~~of ~~owe~~our ~~IITRI~~backlog, ~~under~~which ~~the subordinated note. We would only do this if we~~ could ~~agree~~lower ~~with~~future ~~IITRI on a mutually acceptable price~~revenue.

The maximum contract value identified in a U.S. government contract does not necessarily determine the revenue we will realize ~~Assumption~~from that contract. Congress normally appropriates funds for a given program each fiscal year, even when actual contract performance may take many years. As a result, U.S. government contracts ordinarily are only partially funded at the time of ~~Liabilities~~award. Normally ~~Newtek~~a ~~will~~procuring ~~assume substantially~~agency ~~all~~commits additional money to a contract only as Congress makes subsequent year appropriations. Estimates of ~~the~~future ~~liabilities~~revenue attributed to backlog are not necessarily precise. The actual recognition of revenue ~~IITRI’s~~on ~~business~~contracts included in our backlog may never occur or may change because program funding could be decreased, program schedule could change, the program could be canceled, a contract could be reduced, modified, or terminated early, whether ~~including:~~for the convenience of the government or otherwise; or an option that we had assumed would be exercised could not be exercised. Many contingencies are beyond our control. The backlog on a given contract may not ultimately be funded or may only be partially funded, which may cause our revenue to be lower than anticipated, and adversely affect our business, financial condition, operating results, cash flows and our ability to meet our financial obligations.

•Many ~~liabilities with respect to employees~~ of ~~IITRI~~our ~~who~~U.S. ~~become~~government ~~Newtek~~customers ~~employees;~~procure •goods ~~liabilities~~and ~~with~~services ~~respect~~through tomultiple ~~employees~~delivery oforder ~~IITRI~~type ~~whose employment terminated prior to closing; • liabilities with respect to trade creditors,~~ contracts ~~transferred~~under towhich ~~Newtek~~we ~~and~~must compete ~~existing~~for ~~claims~~post-award ~~incurred since October 1, 1997; and • workers compensation claims and general liability claims that relate to the assets Newtek will acquire~~orders.

Budgetary pressures and reforms in the procurement process have caused many U.S. government ~~IITRI~~customers to purchase goods and services through Government-wide Acquisition Contracts, ~~however~~or GWACs, ~~will~~IDIQ, ~~retain~~General Services Administration, or GSA, schedule contracts and other multiple award contract vehicles. These contract vehicles increase competition and pricing pressure requiring us to make sustained post-award efforts to obtain awards and realize revenue. There can be no assurance that we will ~~not~~maintain or increase revenue or otherwise sell successfully under these contract ~~assume:~~ vehicles. Our failure to compete effectively after an award under any of these types of contracts could harm our business, financial condition, operating results, cash flows and our ability to meet our financial obligations.

•U.S. ~~liabilities~~government ~~associated~~contracts ~~with~~contain ~~IITRI’s~~termination ~~Life~~provisions ~~Sciences~~that ~~Operation;~~are •unfavorable ~~liabilities associated with all real property of IITRI; • tax liabilities for periods prior~~ to closing; • liabilities of IITRI to the Illinois Institute of Technology; • liabilities associated with the multi-employer benefits plans under ERISA; and • liabilities incurred prior to October 1, 1997us.

~~The~~U.S. ~~liabilities~~government weagencies ~~will~~can ~~assume~~generally ~~include~~terminate ~~an obligation~~contracts towith ~~repay~~suppliers ~~approximately~~at ~~$13.6 million~~any ~~in principal~~time ~~amount~~without cause under ~~IITRI’s~~a ~~existing~~termination ~~credit~~for ~~facility,~~convenience ~~and~~clause. ~~IITRI’s~~If ~~obligation~~a ~~under~~government ~~the~~agency ~~earnout~~terminates ~~provisions~~one of ~~an acquisition~~our ~~agreement~~contracts without cause, ~~which~~we ~~obligation~~are ~~will~~likely ~~not~~to ~~exceed~~be compensated for services we have provided and costs we have incurred through the termination date, and we may receive payment for termination-related ~~$11~~costs and a negotiated contract fee.~~5 million~~ However, if the U.S. Ingovernment ~~addition~~terminates a contract because we defaulted under the terms of the contract, we ~~will~~may ~~pay~~be upliable for any extra costs the U.S. government incurs to procure undelivered services from $2another company and other potential damages.~~0 million~~ Termination of ~~IITRI’s~~any ~~out-~~of~~-pocket~~ ~~expenses~~our large U.S. government contracts could negatively impact our revenue and our ability to win future contracts and adversely affect our business, financial condition, operating ~~incurred~~results, incash ~~the~~flows ~~acquisition~~and ~~transaction~~our ability to meet our financial obligations.

~~Representations~~To ~~and Warranties.~~the ~~Within~~extent ~~the~~that ~~purchase agreement,~~we ~~IITRI~~do ~~will~~not ~~make~~accurately ~~representations~~estimate the expenses, time and ~~warranties~~resources necessary to usmeet our contractual obligations, ~~relating~~ ~~to:~~ our contract profits will be lower than expected.

•The total ~~IITRI’s~~price ~~organization~~on ~~and~~a ~~corporate~~cost-reimbursement ~~standing,~~contract ~~its~~is ~~authority~~primarily tobased ~~enter into the purchase agreement and the binding effect of the agreement~~ on ~~IITRI;~~allowable •costs ~~the~~incurred ~~compliance~~subject ofto ~~the~~a ~~purchase~~contract ~~agreement~~funding ~~and~~limit. ofU.S. ~~the~~government ~~transferred~~regulations ~~business~~do ~~with~~not ~~IITRI’s~~permit ~~charter~~us ~~documents~~to ~~and~~recover ~~material~~unallowable ~~agreements~~costs, and ~~with~~require ~~third~~us ~~parties’~~to ~~rights,~~notify ~~governmental~~our ~~permits~~customers ~~and~~of ~~applicable~~any cost ~~laws;~~overruns •or ~~the~~underruns ~~accuracy,~~on ~~compliance~~a ~~with~~cost-reimbursement Ucontract.S. ~~generally~~We ~~accepted~~may ~~accounting~~not ~~principles~~be ~~and~~able ~~consistency~~to ~~with~~recover ~~past~~cost ~~practice~~overruns ofin ~~IITRI’s~~excess ~~recent financial statements; • the absence~~ of ~~facts~~a ~~and events materially adversely affecting IITRI~~contract’s ~~transferred~~funding ~~business~~limit and ~~the~~may ~~absence~~not ofearn ~~undisclosed liabilities; •~~ the ~~absence~~profit ofwe ~~materially~~anticipated ~~adverse~~from ~~litigation proceedings; •~~ the ~~identification of employee plans and major contracts; and • the property ownership rights and the condition of the transferred assets~~contract.

~~Some~~In ofa ~~the~~fixed-price ~~representations~~contract, ~~and~~we ~~warranties~~estimate ~~that IITRI~~project ~~will~~costs ~~give~~and usagree ~~are~~to ~~subject~~perform toservices ~~the~~for ~~knowledge~~a predetermined price regardless of ~~certain~~our actual costs. ~~members~~We ofpay ~~its~~for ~~management~~any ~~who~~cost overruns. If we fail to anticipate technical problems, ~~after~~or ~~the~~accurately ~~completion~~estimate ofor ~~the transaction~~control costs, ~~will~~we ~~become~~may ~~members~~face ofa ~~the~~lower ~~management~~fixed-price ofcontract ~~Newtek, and~~profit ~~IITRI~~margin ~~will~~or ~~not~~even bea ~~liable~~loss. ~~for~~Further, ~~any~~we ~~breaches~~may enter into a higher number of ~~these~~fixed-price ~~representations~~contracts ~~and~~in ~~warranties~~the future, which ~~these~~could ~~IITRI~~impact ~~managers~~our ~~were aware~~operations. ofProvisions atin ~~the~~our ~~time~~financial ~~the~~statements ~~purchase~~for ~~agreement~~estimated ~~was~~contract ~~signed~~losses may not be adequate to cover all our actual losses.

WeIf ~~will~~our ~~make~~fixed-price ~~representations~~contract ~~and~~revenue ~~warranties~~were to decline in total or as a proportion of our ~~IITRI~~total business, ~~relating~~or ~~to:~~ if profit rates on these contracts deteriorate, our operating margins and operating results may suffer.

•We have ~~Our~~historically ~~organization~~earned ~~and~~higher ~~corporate~~profit ~~standing,~~margins ~~our~~on ~~authority~~fixed-price tocontracts ~~enter~~than ~~into~~on ~~the~~cost-reimbursement ~~purchase~~contracts, ~~agreement~~because government regulations and ~~the~~business ~~binding~~practices ~~effect~~limit ofcost-reimbursement ~~the~~contract ~~agreement~~fee onlevels. ~~us;~~Our •U.S. government customers typically choose the ~~compliance~~type of ~~the~~contract ~~purchase~~they ~~agreement~~issue. ~~and~~If ~~our~~in ~~business~~the ~~with~~future, our ~~charter~~proportion ~~documents~~of ~~and~~fixed-price ~~material~~contract ~~agreements~~revenue ~~and~~were ~~with~~to ~~third~~significantly ~~parties’~~decrease, ~~rights~~or customers shift to other types of contracts such as cost-reimbursement contracts, ~~governmental~~our ~~permits~~operating margins and operating ~~applicable~~results ~~laws;~~may ~~and~~suffer. •We ~~senior~~cannot ~~term~~ensure ~~loan~~we ~~and~~will ~~the~~be ~~existence~~able ofto amaintain ~~commitment~~our ~~letter~~historic ~~with~~profitability ~~LaSalle~~levels ~~Bank~~on ~~which~~fixed-price iscontracts ~~providing~~overall ~~the~~nor ~~senior~~can ~~credit~~we ~~facility~~ensure that our percentage of total revenue generated from fixed-price contracts will remain the same or improve.

~~Covenants.~~If Aswe ~~part of~~fail ~~the~~to ~~purchase~~recover ~~agreement~~at-risk contract revenue, we ~~and~~may ~~IITRI~~have ~~will~~reduced ~~agree~~fees ~~that:~~ or losses.

•We ~~from~~are ~~the~~at ~~date~~risk offor ~~the~~any ~~signing~~revenue ofwe ~~the~~incur ~~purchase~~before ~~agreement~~a ~~until~~contract ~~closing,~~is ~~IITRI will conduct its business in the ordinary and usual course consistent with past practice~~executed, ~~and~~modified ~~will not take material~~ or ~~extraordinary~~renewed. ~~actions~~A ~~without~~customer ~~our~~may ~~consent;~~choose •not ~~we and IITRI will negotiate in good faith and will use our best efforts~~ to ~~agree~~pay onus ~~definitive forms of the schedules~~ for ~~the~~these costs. ~~representations~~As ~~and~~of ~~warranties under the purchase agreement and definitive agreements regarding the mezzanine note~~December 31, ~~the seller note~~2014, ~~the~~we ~~warrants~~had ~~and~~approximately ~~other~~$15.6 ~~documents~~million toin beat-risk ~~executed as of closing~~revenue. •While wesuch ~~and~~revenue ~~IITRI~~is ~~will~~associated ~~use~~with ~~our~~specific ~~best~~anticipated ~~efforts~~contracts ~~to obtain any required consent~~ and ~~approval~~funding ~~to consummate the acquisition including the approval of State Street~~modifications, aswe ~~the~~cannot ~~ESOP trustee, and the consent of the parties to IITRI’s contracts which are to~~ be ~~transferred~~certain tothat ~~Newtek;~~our •customers ~~effective as of the closing, we~~ will ~~offer~~execute ~~employment~~these anticipated tocontracts ~~all~~or ~~employees~~contract ofrenewals ~~IITRI~~or ~~and~~that ~~HFA~~they ~~except those working exclusively for and in support of IITRI’s Life Sciences Operation. Each employee who becomes a Newtek employee~~ will bepay ~~given~~us ~~credit~~ for ~~the same years of service that he or she had as an IITRI employee for the purpose of~~ all of our ~~employee~~related ~~benefit plans; • IITRI will indemnify us against any taxes incurred by the transferred business prior to the closing; • we and IITRI will each bear one~~at-~~half~~risk of the transfer taxes, if any, incurred as a result of the acquisition; and • IITRI will not be liable for any monetary damages relating to any breach of a covenant incurred prior to closing, unless such action was authorized by its board or any of its memberscosts.

~~Indemnification. IITRI~~Actual ~~will~~or ~~indemnify us against any losses resulting from a~~perceived ~~breach~~conflicts ~~by it~~ of ~~any~~interest ofmay ~~its~~prevent ~~representations,~~us ~~warranties or covenants and against any losses resulting~~ from ~~liabilities retained~~being byable ~~IITRI.~~to ~~We,~~bid inon ~~turn, will indemnify IITRI against any losses resulting from a breach by us of any of our representations, warranties~~ or ~~covenants~~perform ~~and against any losses resulting from liabilities we assume~~contracts.

U.S. government agencies have conflict of ~~The~~interest ~~liability~~policies including policies pertaining to organizational conflicts of ~~IITRI~~interest, that may prevent us from bidding on or performing certain contracts. When dealing with U.S. government agencies, we must decide, at times with insufficient information, whether to participate in the design process and ~~Newtek~~lose ~~under~~the chance of performing the contract or to turn down the design opportunity for the chance of performing the future contract. U.S. government agencies have the ability to exclude ~~purchase~~contractors ~~agreement~~from ~~will~~specific becompetitions ~~limited~~due asto ~~follows:~~actual or perceived conflicts of interest. We have, on occasion, declined to bid on particular projects because of actual or perceived conflicts of interest. We are likely to continue encountering such conflicts of interest in the future. Future conflicts of interest could cause us to be unable to secure key contracts with U.S. government customers.

•As ~~except for~~ a ~~number~~U.S. ofgovernment ~~specific representations and warranties which will survive until the end of the applicable statute of limitations period~~contractor, ~~there~~we ~~will~~must becomply nowith ~~obligation~~complex ~~for~~procurement ~~either~~laws ~~IITRI~~and orregulations us to indemnify the other party after the 18-month anniversary of the closing; • only losses exceeding a total amount of $750,000 will be indemnified; • the total amount of indemnified losses by either party will not exceed $25.0 million; and •our wefailure ~~will be entitled~~ to ~~set~~do ~~off~~so ~~any~~could ~~indemnification~~result ~~payments~~in suspension ~~payable~~or bydebarment ~~IITRI~~from ~~under~~doing ~~the~~business ~~purchase~~with ~~agreement against any cash purchase price adjustment and against our obligations under~~ the ~~subordinated~~U.S. ~~note,~~government ~~and~~or ~~the~~otherwise ~~additional subordinated note, if any, unless such notes~~ have ~~been transferred to~~ a ~~party~~negative ~~other~~impact ~~than~~upon ~~IITRI,~~our ~~the Illinois Institute of Technology or their affiliates~~business.

We ~~Guarantee~~must ofcomply with and are affected by laws and regulations relating to the ~~Illinois~~formation, ~~Institute~~administration and performance of ~~Technology~~ U.S. Ingovernment contracts, which may impose added risks and costs on our business. If a ~~separate~~government ~~agreement~~review or investigation, or a private “whistleblower” or qui tam action under the ~~Illinois~~Federal ~~Institute~~Civil ofFalse ~~Technology~~Claims ~~will~~Act, ~~guarantee~~uncovers usimproper ~~that IITRI~~or ~~will~~illegal ~~fulfill~~activities, ~~all~~we ~~its~~may ~~obligations~~be ~~under~~subject ~~the~~to ~~purchase agreement~~civil and/or criminal penalties and administrative sanctions, including ~~the~~contract termination, ~~payment~~damages, fines, forfeiture of ~~indemnification~~fees, ~~claims~~suspension of payment, suspension or debarment from doing business with U.S. government agencies and the curtailment or restructuring of our operations, any of which could materially and adversely affect our ability to conduct our business.

We derive significant revenue from U.S. government contracts awarded through competitive bidding, which is an inherently unpredictable process.

We obtain most of our U.S. government contracts through competitive bidding, including (in many cases) contracts and renewals. We face risks associated with:

•

the frequent need to bid on programs in advance of the completion of their design, which can result in unforeseen technological difficulties and/or cost overruns;

•

the substantial time and effort, including design, development and promotional activities, required to prepare bids and proposals for contracts we may not win; and

•

the rapid rate of technological advancement and design complexity of most of our research offerings.

~~Conditions~~We may not succeed in winning new contract awards or renewals in the future. Our failure to renew ~~Closing.~~or Wereplace ~~will~~existing ~~only~~contracts bewhen ~~required~~they expire or win new contracts, would negatively affect our business, financial condition, operating results, cash flows and our ability to ~~consummate~~ ~~the~~meet ~~acquisition~~ our financial obligations.

•Our ifbusiness ~~IITRI’s~~could ~~representations~~be ~~and~~adversely ~~warranties~~affected ~~are~~by ~~true~~delays ~~and~~caused ~~correct~~by asour ofcompetitors ~~the~~protesting ~~closing~~major ~~and~~contract ifawards ~~IITRI~~received ~~has complied with all of its covenants; • if IITRI delivers to us the guarantee signed~~ by the Illinois Institute of Technology; • if the trustee of the ESOP approves the acquisition; • if we have obtained a senior term note from a commercial bank of at least $26.0 million and an equity investment from the ESOP of at least $30.0 million; • if certain employment agreements of the IITRI senior managers have been amended to waive their rights to their existing “value added payments”us, ~~and~~resulting in ~~provide them with new incentive payments; • if~~ the ~~Attorney~~delay ~~General~~ of the ~~State~~initiation of ~~Illinois~~work ~~has not objected to the acquisition; • if there is no injunction~~ or ~~order~~loss ~~by a court or other authority prohibiting the consummation~~ of ~~the acquisition; and • if we have received an opinion from McDermott, Will & Emery, counsel to IITRI, opining on certain legal matters in the acquisition~~contracts.

A contract award or a solicitation’s terms and conditions are ~~IITRI~~subject ~~will~~to ~~only~~protest befor ~~required~~a variety of reasons, including that a solicitation or competitive bidding process violates law or regulations, or that the government agency has failed to ~~consummate~~comply with the terms of a solicitation or acted unreasonably in ~~acquisition~~conducting a procurement. Moreover, changes to an existing contract are subject to protest on the basis that they involve a cardinal change which exceeds the scope of the contract. A bid protest may result in a decision by a court, the Government Accountability Office, or by the cognizant government agency to cancel a contract award or to take other action that may result in the loss of a contract or in delay in a contract’s start date. Even a bid protest that does not result in such a decision or action will involve legal expenses and will result in delay of the start date of the contract until resolution of the protest. U.S. government contracts are subject to bid protests by other interested parties that compete with us for new contracts and in re-competitions. It can take many months to resolve protests by one or more of our competitors of contract awards we receive. The resulting delay in the startup and funding of the work under these contracts may cause our actual results to differ materially and adversely from those anticipated. Accordingly, bid protests may negatively affect our business, financial condition, operating results, cash flows and our ability to meet our financial obligations.

•Our iffailure ~~our~~to ~~representations~~obtain and ~~warranties~~maintain ~~are~~necessary ~~true~~security ~~and~~clearances ~~correct~~may aslimit ~~of the closing and if we have complied with all of~~ our ~~covenants;~~ability • if IITRI receives from its management certificates stating that IITRI’s representations and warranties are true and correct as of the closing and that IITRI has complied with all its covenants; • if certain employment agreements of the IITRI senior managers have been amended to ~~waive~~carry ~~their~~out ~~rights~~confidential towork ~~their~~for existing “value added payments”, and provide them with new incentive payments; • if the Attorney General of the State of Illinois has not objected to the acquisition; • if IITRI receives from its financial advisor a fairness opinion regarding the acquisition; • if there is no injunction or order by a court or other authority prohibiting the consummation of the acquisition; and • if IITRI has received an opinion from Baker & McKenzie, Washington, DU.CS., government ~~our counsel~~customers, ~~opining~~which oncould ~~certain~~cause ~~legal matters in the acquisition, including~~ our ~~qualification~~revenue asto ~~an S corporation under U~~decline.S. ~~tax laws.~~

As of December 31, 2014, we had facility security clearances Atat 20 of our sites. As of December 31, 2014, approximately 80% of our employees held security clearances. Each cleared facility has a Facility Security Officer and Key Management Personnel whom the ~~closing~~U.S. Department of Defense-Defense Security Service requires to be cleared to the level of the facility security clearance. Individual employees are selected to be cleared, based on specific classified contract task requirements and each employee’s technical, administrative or management expertise. Once an employee is cleared, he or she may be granted access classified contract information, based on clearance level and a “need-to-know”.

•Protecting weclassified ~~will~~information ~~pay~~is ~~the~~paramount. ~~cash~~Loss ~~portion~~ of ~~the~~a ~~purchase~~facility ~~price~~clearance, ~~and~~or ~~will~~an ~~execute~~employee’s ~~and~~failure ~~deliver~~ to ~~IITRI~~obtain ~~the~~or ~~mezzanine~~maintain ~~note~~a security clearance, ~~the~~could ~~subordinated~~result ~~note,~~in a U.S. government customer terminating an existing contract or choosing not to renew a contract. If we cannot maintain or obtain the ~~mezzanine~~required ~~warrant~~security clearances for our facilities and ~~the~~our ~~subordinated~~employees, ~~warrant~~or ascannot ~~well~~obtain asthese clearances in a ~~registration~~timely ~~rights~~manner, ~~agreement;~~we •may ~~IITRI~~be ~~will~~unable ~~execute~~to aperform ~~bill~~certain U.S. government contracts. Lack of ~~sale~~required ~~for~~clearances ~~the~~could ~~transferred~~also ~~assets;~~impede •our ~~IITRI~~ability ~~will~~to ~~execute~~bid ~~the~~on ~~assignment~~or ofwin ~~IITRI’s~~new government contracts, ~~intellectual~~which ~~property,~~might ~~licenses~~result ~~and~~in ~~other~~terminating ~~authorizations;~~current research activities. This could damage our reputation and •our werevenue would likely decline, which could materially and ~~IITRI~~adversely ~~will~~affect ~~execute~~our abusiness, ~~lease~~financial ~~agreement~~condition, ~~for~~operating ~~the~~results ~~Chemistry~~and ~~building~~ability to meet our financial obligations.

~~Termination.~~If Wewe ~~and IITRI~~fail ~~may terminate the purchase agreement by mutual written agreement, or if any of the conditions precedent~~ to ~~the~~establish ~~closing have~~and ~~not~~maintain ~~been~~important ~~satisfied~~relationships ~~before~~with ~~November 30,~~government ~~2002,~~entities orand ~~if the closing has not been consummated by December 4~~agencies, ~~2002. Additionally,~~our ifability ~~the parties cannot agree on the exhibits or schedules~~ to ~~the~~successfully ~~purchase~~bid ~~agreement by August 3, 2002,~~for ~~either~~new ~~party~~business ~~may~~and ~~terminate~~retain ~~the~~existing ~~agreement.~~business ~~Finally, IITRI~~ may ~~terminate~~ ~~the~~be ~~purchase~~adversely agreement if it receives an opinion of an environmental expert that is based upon a Phase II environmental report for the La Porte, Indiana property indicates that liabilities for the environmental situation at the La Porte, Indiana property will exceed $2affected.~~0 million.~~ ~~Such termination right expires after 60 days upon receipt of the environmental Phase II report.~~

To bid on new business, we rely in part on establishing and maintaining relationships with various government officials. These government relationships help us to better understand government agencies’ needs before we develop a formal proposal. Due to change in personnel at the customer agencies or within our company, we may be unable to maintain our relationships with government entities and agencies; any failure to do so could adversely affect our ability to bid successfully for new business or to retain existing business. This could adversely affect our operating results, cash flow and financial condition and our ability to meet our financial obligations.

~~Description~~Failure ofto ~~Notes~~maintain ~~and~~strong ~~Warrants~~relationships with other contractors could result in a decline in our revenue.

Approximately 13% of our fiscal year 2014 revenue resulted from our work as a subcontractor to and from teaming ~~Senior~~arrangements ~~Credit~~with ~~Facility~~other contractors. As a subcontractor or teammate, we cannot control performance by our prime contractor or other teammates. Poor performance on a given contract could impact our customer relationship, even when we perform as required. We expect to continue to depend on relationships with other contractors for a portion of our revenue for the foreseeable future. Our revenue, operating results, financial position and cash flows could differ materially and adversely from what we anticipate if one or more of our prime contractors or teammates were to rely on one of our competitors, instead of us, or were to directly provide our customers the kind of services we provide.

~~General.~~The ~~In connection~~Federal ~~with~~Government’s ~~the~~payment ~~acquisition,~~process ~~we expect to enter into a senior credit facility with a syndicate of banks~~ and other ~~financial~~ ~~institutions~~factors ~~for~~may ~~which~~delay ~~LaSalle Bank National Association will serve as agent and arranger in an amount up to $60.0 million, which we refer to as~~ the ~~senior~~collection ~~credit facility. Set forth below is a summary~~ of ~~the~~our ~~terms~~receivables, ~~of the senior credit facility as expressed in a letter of commitment executed by us~~ and ~~LaSalle~~our ~~Bank~~business onmay ~~May 24, 2002. The terms~~be ofadversely ~~the~~affected ~~definitive~~if ~~agreements~~we ~~for~~cannot ~~the~~collect ~~senior~~our ~~credit~~receivables ~~facility will require the prior approval of IITRI. LaSalle Bank also reserves the right,~~ in consultation with us, to modify the terms of the senior credit facility to the extent necessary to complete the required syndication of the senior credit facility, so long as the aggregate amount of the senior credit facility does not change. As a ~~result,~~timely ~~the final terms may materially differ from those described below~~manner. ~~We do, however, have the right to withdraw from the commitment if any modified terms are, in our reasonable discretion, unacceptable.~~

We must collect our receivables to generate cash ~~The~~flow, ~~senior~~provide ~~credit~~working ~~facility~~capital, ~~has~~pay ainterest ~~term~~and principal on our debt and continue our business operations. If the Federal Government, or any of ~~five~~our prime contractors fails to pay or delays paying our invoices for any reason, our business and ~~years~~financial condition may be materially and ~~consists~~adversely ofaffected. The government may fail to pay outstanding invoices and the Defense Contract Audit Agency, or DCAA, could revoke our direct billing privileges, which would adversely affect our ability to timely collect our receivables. Contracting officers can also withhold payment of some portion or all of an outstanding invoice, which could also adversely affect our ability to collect our receivables timely.

	•	a senior term loan of up to $35.0 million, and
	•	a $25.0 million revolving credit commitment.

Government rules could limit our ability to get paid for the work we perform.

~~Under~~Government ~~the~~rules ~~revolving~~require ~~credit~~DoD ~~facility,~~contracting upofficers to impose contractual withholdings at no less than certain minimum levels if a contracting ~~$3.0 million~~officer ofdetermines ~~commercial~~that ~~and~~one ~~standby~~or ~~letters~~more of ~~credit may~~a becontractor’s ~~issued.~~business ~~All~~systems ~~principal~~have ~~obligations~~one ~~under~~or ~~the~~more ~~revolving credit~~significant ~~facility~~deficiencies. ~~are~~If a contracting officer were to beimpose ~~repaid~~such ina ~~full~~withholding on ~~the~~us ~~fifth anniversary~~or even one of our prime contractors or subcontractors, it would increase the ~~revolving~~risk ~~credit~~we ~~facilities~~would not be paid in full or paid timely. If we experience difficulties collecting receivables, it could materially and adversely affect our operating results, cash flow and financial condition and our ability to meet our obligations.

OnThe ~~the~~U.S. ~~senior~~government ~~term~~may ~~loan,~~adopt ~~principal~~new ~~repayments will~~contract belaws ~~payable~~and inregulations ~~quarterly~~or ~~installments,~~revise ~~yielding~~its ~~annual repayments~~procurement practices in ~~the~~a ~~following amounts:~~manner adverse to us at any time.

Years 1 and 2		$5.0 million
Year 3		$7.5 million
Year 4		$8.5 million
Year 5		$9.0 million

The U.S. government may face restrictions or pressure regarding the type and amount of services it may obtain from private contractors. Legislation, regulations and initiatives dealing with procurement reform, environmental responsibility or sustainability, and mitigation of potential conflicts of interest, as well as any resulting shifts in the buying practices of U.S. government agencies could adversely affect us. Such changes could impair our ability to obtain new contracts or win a recompete of an existing contract. Any new contracting requirements or procurement methods could be costly or administratively difficult for us to implement and could materially and adversely affect our operating results, cash flow and financial condition and our ability to meet our obligations.

WeThe ~~may~~U.S. ~~repay~~government ~~any~~may ~~amount~~prefer ~~of our borrowings under the senior credit facility without premium or penalty~~minority-owned, ~~other than~~small ~~(i) customary breakage costs related to repayment of Eurodollar-based loans prior to the end of an interest period,~~ and ~~(ii) breakage~~small ~~costs~~disadvantaged ~~associated~~businesses; ~~with the early termination of any interest rate swap~~therefore, ~~cap~~we ormay ~~collar~~not ~~entered into~~win incertain ~~relation~~contracts ~~to the senior credit facilities. We expect to~~on bewhich ~~required~~we ~~to prepay our borrowings with proceeds of any permitted debt or equity issuance or asset sale and with a portion of our excess cash flow each year~~bid.

~~Proceeds~~As part of the ~~senior~~Small ~~credit~~Business ~~facility~~Administration set-aside program, the U.S. government may decide to restrict certain procurements only to bidders that qualify as minority-owned, small, small disadvantaged, or veteran-owned, businesses. As a result, we would not be ~~used~~eligible to perform as a prime contractor on those programs and would be restricted to a maximum of 49% of the work as a subcontractor on those programs. An increase in the amount of procurements under the Small Business Administration set-aside program may impact our ability to bid on new procurements as a prime contractor or restrict our ability to recompete on incumbent work that is placed in the set-aside program.

• to pay a portion of the purchase price of the acquisition; • to finance capital expenditures; • to finance working capital and for general corporate purposes; • to refinance existing indebtedness; • to finance the payment of certain fees and expenses associated with the closing of the acquisition and the senior credit facilities; and • to finance certain permitted acquisitions.

Security. The senior credit facility will be secured by a first priority, perfected security interest in all of Newtek’s tangible and intangible property.

~~Interest~~Some ~~and Fees. For the periods until the receipt~~ of ~~the compliance certificate and audited financial statements for the fiscal year ended September 30, 2003,~~ our ~~borrowings~~contracts ~~under~~with the ~~senior~~U.S. ~~credit facility~~government are ~~expected~~classified toor ~~bear~~subject ~~interest at either of two floating rates: a per year rate equal~~ to ~~the~~other ~~Eurodollar rate plus~~security ~~3.5 percent~~restrictions, or the prime rate (base rate) plus 2.0 percent. After the lenders’ receipt of our audited financial statements for the fiscal year ending September 30, 2003, the interest rate and commitment fees will equal the Eurodollar rate or the prime rate (base rate) plus the following margins which ~~will~~may ~~vary~~limit ~~depending~~investor ~~upon~~insight ~~our leverage~~into ~~ratio,~~portions ~~which is the ratio~~ of our ~~total funded debt, excluding the subordinated note, to our earnings before interest, taxes, depreciation, amortization and ESOP repurchase obligations, referred to as EBITDAE~~business.

Revolving Credit
and Term Loan	Level I		Level II		Level III		Level IV
Leverage ratio		Less than 2.0 to 1.0	Less than 2.5 to 1.0 and greater than or equal to 2.0 to 1.0		Less than 3.0 to 1.0 and greater than or equal to 2.5 to 1.0		Greater than or equal to 3.0 to 1.0
Base rate margin		1.25%		1.50%		1.75%		2.00%
Eurodollar margin		2.75%		3.00%		3.25%		3.50%
Commitment fee (usage less than 40%)		1.00%		1.00%		1.00%		1.00%
Commitment fee (usage greater than or equal to 40%)		0.50%		0.50%		0.50%		0.50%

For fiscal year 2014, we derived a portion of our revenue from contracts with the U.S. government that are classified or subject to security restrictions that preclude the dissemination of certain information. In addition, a significant number of our employees have security clearances which preclude them from providing information regarding certain of our clients and services provided to such clients to persons without security clearances and investors. Because we are limited in our ability to provide information about these contracts and services, the various risks associated with these contracts or services or any dispute or claims relating to such contracts or services, you may not have important information concerning our business, which will limit your insight into a portion of our business and therefore may be less able to fully evaluate the risks related to that portion of our business.

~~Standby~~Our ~~letters~~business ~~of credit under the revolving~~is ~~credit~~subject ~~facility will include a fronting fee equal~~ to ~~0.25 percent~~ offluctuations ~~the~~that ~~face~~may ~~amount~~cause ofour ~~each~~operating ~~letter~~results ~~of credit, payable annually in advance, and a letter of credit fee, payable quarterly in advance, equal~~ to ~~the applicable Eurodollar margin applied to the face amount of each letter of credit~~decline. ~~Commercial letters of credit will include customary fees based on the agent’s published fee schedule.~~

The U.S. government’s fiscal year ends on ASeptember 30th ~~commitment~~of ~~fee~~each year. It is ~~payable~~not ~~quarterly~~uncommon infor ~~arrears in~~U.S. ~~accordance~~government ~~with~~agencies ~~the~~to ~~schedule~~award ~~above~~extra ontasks or complete other contract actions in the ~~unused~~weeks ~~portion~~before of the ~~revolving~~end ~~credit~~of ~~facility.~~its Infiscal ~~addition~~year in order to avoid the ~~commitment~~loss of unexpended fiscal year funds. In ~~fee~~addition, we ~~expect~~also tohave ~~pay~~generally ~~certain~~experienced ~~other~~higher ~~fees~~bid inand ~~connection~~proposal ~~with~~costs in the ~~senior~~ ~~credit~~months ~~facility,~~leading ~~including~~up anto ~~agent~~the U.S. government’s ~~fee~~fiscal ofyear ~~$25,000~~end as we pursue new contract opportunities being awarded shortly after the U.S. government fiscal year end ~~per~~as new opportunities are expected to have funding appropriated in the U.S. government’s subsequent fiscal year. We may continue to experience this seasonality in future periods, and aour ~~one-time~~future ~~upfront~~periods ~~fee~~may ofbe $1affected by it.~~8 million~~ ~~for~~Changes in the ~~services~~government’s ~~performed~~funding byand ~~the~~spending ~~arranger~~patterns inhave altered historical seasonality trends, supporting our approach to managing the ~~syndication~~business on an annual basis. Seasonality is just one of ~~the~~a number of factors, many of which are outside of our ~~senior~~control, ~~credit~~which ~~facilities~~may affect our results in any period.

~~Covenants.~~Our Webusiness ~~expect that~~is ~~the~~subject ~~granting~~to ofroutine ~~the~~audits ~~senior~~and ~~credit~~cost ~~facility~~adjustments ~~will~~by ~~require that~~the ~~we meet certain financial tests which we expect to include~~U.S. ~~fixed charge coverage~~government, ~~minimum EBITDAE~~which, ~~maximum~~if ~~senior~~resolved ~~debt~~unfavorably to ~~EBITDAE,~~ ~~maximum total funded debt to EBITDAE and maximum capital expenditures. The senior credit facility will also include covenants which~~us, ~~among~~could ~~other~~adversely ~~things,~~affect ~~will restrict~~ our ~~ability~~ torevenues. ~~do the following:~~

•U.S. ~~incur~~government ~~additional~~agencies ~~indebtedness~~routinely audit and review their contractors’ performance on contracts, ~~including~~cost ~~guarantees~~structure, pricing practices and ~~capital~~compliance ~~leases;~~with •applicable ~~amend~~laws, ~~our~~regulations, ~~certificate~~cost allowability principles, and cost accounting standards. They also review a contractor’s financial capability and the adequacy of, ~~incorporation~~and ora ~~bylaws;~~contractor’s •compliance ~~liquidate~~with, orits ~~dissolve~~internal ~~Newtek~~control orsystems ~~file~~and ~~bankruptcy~~policies, orincluding ~~assign~~the ~~substantially~~contractor’s ~~all~~purchasing, property, estimating, compensation and management information systems. Such audits may result in adjustments to our ~~assets;~~contract •costs ~~consolidate~~to the extent that our costs are not allowable, ~~merge~~properly allocated and/or ~~sell~~exceed ~~all~~obligated contract funding, and any costs found to be unallowable or ~~substantially~~improperly ~~all~~allocated ofwill not be reimbursed. In addition, if costs have already been reimbursed to us by our ~~assets;~~government •customers ~~make~~through ~~loans~~our ~~and~~contracts, ~~investments;~~but •those costs are subsequently disallowed by audits, we would be required to repay ~~principal~~those amounts, and may be required to pay interest and possible penalties. We have recorded revenue on ~~the~~Federal ~~mezzanine~~Government ~~note~~contracts orin amounts we expect to realize. If the ~~subordinated~~estimated ~~note;~~reserves •in ~~pay~~our ~~dividends~~financial orstatements ~~distributions;~~are •not ~~pay~~adequate, ~~management~~future ~~fees~~government orcontract ~~enter~~revenue ~~into~~may ~~transactions~~be ~~with~~lower ~~affiliates;~~than expected.

The DCAA is currently auditing our 2009 claimed indirect costs. We have settled our indirect rates through 2008 but all subsequent years are open. The U.S. government has made a claim for penalties and interest in respect of our 2005 claimed indirect costs of approximately $300 thousand. It is our position that the statute of limitations has expired on any such government contractual claims, but there can be no assurance that such position will be determined in our favor, or that we will not need to adjust our 2005 revenue.

We are subject to risks associated with operating internationally.

Our U.S. and foreign operations are subject to the Foreign Corrupt Practices Act and similar worldwide anti-corruption laws, including the U.K. Bribery Act of 2010, which generally prohibit companies and their

• intermediaries ~~grant~~from ~~liens~~making ~~and~~improper ~~security~~payments ~~interests~~to government officials for the purpose of obtaining or ~~enter~~retaining ~~into~~business. ~~sale~~Our internal policies mandate compliance with these anti-corruption laws and ~~leaseback~~inclusion ~~transactions;~~of appropriate clauses in agreements with foreign counterparties. Despite our training and compliance programs, we cannot assure that our internal control policies and procedures always will protect us from reckless or •criminal ~~change~~acts committed ~~lines~~by our employees or agents. Any expansion of our international business operations, including in developing countries, could increase the risk of such violations in the future. Violations of these laws, or allegations of such violations, could result in our suspension or debarment from doing business with the U.S. government, or otherwise disrupt our business and result in a material adverse effect on our results of operations or financial condition.

~~The~~Failure ~~senior~~to ~~credit~~adequately ~~facility~~protect, ismaintain, ~~also~~or ~~expected~~enforce ~~to require~~our ~~that~~rights wein ~~satisfy~~our ~~customary~~intellectual ~~affirmative~~property ~~covenants~~may ~~and~~adversely ~~make customary~~limit ~~indemnifications to~~ our ~~lender~~competitive position. ~~Affirmative covenants are expected to include:~~

•We ~~financial~~rely ~~statements;~~upon •a ~~reports~~combination onof ~~material~~nondisclosure ~~litigation;~~agreements •and ~~compliance~~other ~~with~~contractual ~~law;~~arrangements, •as ~~corporate~~well ~~existence;~~as •copyright, trademark, ~~notices~~patent, ofand ~~default;~~trade •secret ~~environmental~~laws ~~matters;~~to •protect ~~maintenance~~our ofproprietary information. U.S. government contracts typically contain provisions that allow it to claim rights, including intellectual property rights, in products and ~~insurance;~~data •developed ~~payment~~under ofsuch agreements. ~~taxes;~~We •may ~~inspection~~not ofhave ~~books~~the ~~and~~right ~~records;~~to prohibit the U.S. government from using certain technologies developed by us, and •we ~~ERISA~~may not be able to prohibit third party companies, including our competitors, from using those technologies in providing products and ~~employee~~services ~~benefits~~to ~~requirements~~the U.S. government. The U.S. government generally takes the position that it has the right to royalty-free use of technologies that are developed under U.S. government contracts.

~~Rate~~We ~~Hedging Agreements.~~also ~~The~~enter ~~senior~~into ~~credit~~proprietary ~~facility will~~information ~~require~~and ~~interest~~intellectual ~~rate~~property ~~protection~~agreements inwith ~~the~~employees, ~~form~~which ofrequire ~~hedging~~them to disclose any inventions ~~agreements~~created during employment, to convey such asrights ~~swaps,~~to ~~caps~~inventions orto ~~collars~~us, ~~regarding~~and atto ~~least~~restrict any disclosure of proprietary information. Trade secrets are generally difficult to protect. Although our employees are subject to confidentiality obligations, ~~50 percent~~this protection may be inadequate to deter or prevent misappropriation of our confidential information and/or the ~~principal~~infringement ~~amount~~of our patents and copyrights. Further, we may be unable to detect unauthorized use of ~~the~~our ~~senior~~intellectual ~~term~~property ~~loan~~or ~~for~~otherwise atake ~~period~~appropriate ofsteps atto ~~least~~enforce ~~three~~our ~~years~~rights. ~~following~~Additionally, we may only assert restrictions on the ~~closing~~government’s ofrights to use, modify, reproduce, release, perform, display, or disclose technical data to be delivered under our government contracts by properly identifying and marking the ~~senior~~deliverable ~~credit~~data ~~facility~~subject to restriction. Failure to adequately protect, maintain, or enforce our intellectual property rights may adversely limit our competitive position.

~~Events~~We ofuse ~~Default. The~~estimates ~~senior~~in ~~credit~~recognizing ~~facility~~revenue isand ~~expected~~if we make changes to ~~contain~~estimates ~~customary events~~used ofin ~~default,~~recognizing ~~including~~revenue, ~~without~~our ~~limitation:~~profitability may be adversely affected.

•Revenue ~~payment~~from ~~default;~~our •fixed-price ~~breach~~contracts is primarily recognized using the percentage-of-completion ~~representations~~method ~~and~~with progress ~~warranties;~~toward •completion ~~uncured~~of ~~covenant~~a ~~breaches;~~particular •contract ~~default~~based ~~under~~on ~~other~~actual ~~debt~~costs ~~agreements;~~incurred •relative ~~bankruptcy~~to ~~and~~total ~~insolvency~~estimated ~~events;~~costs •to ~~ERISA~~be ~~violations;~~incurred •over ~~unstayed~~the ~~judgments~~life inof ~~excess~~the contract. Revenue from our cost-plus-award-fee contracts are based on our estimation of ~~agreed~~award fees ~~amounts;~~over the life of the contract. Estimating costs at completion and •award fees on our long-term contracts is complex and involves significant judgment. Adjustments to original estimates are often required as work progresses, experience is gained, and additional information becomes known, even though the scope of the work required under the contract may not change. Any adjustment as a result of ~~control~~a change in estimate is recognized as events become known.

In the event updated estimates indicate that we will experience a loss on the contract, we recognize the estimated loss at the time it is ~~Mezzanine~~determined. ~~Note~~Additional information may subsequently indicate that the loss is more or less than initially recognized, which requires further adjustments in our consolidated financial statements. Changes in the underlying assumptions, circumstances, or estimates could result in adjustments that could have a material adverse effect on our future results of operations.

General. We also expect to issue a mezzanine note with a face value of $21.2 million to IITRI. The mezzanine note is intended to serve as part of the consideration for the transfer of the assets, rights and liabilities of IITRI pursuant to the acquisition. Set forth below is a summary of the expected material terms of the mezzanine note. The final terms of the mezzanine note have not been agreed upon. As a result, the final terms may differ from those described below and the difference may be significant.

The mezzanine note is expected to bear interest at a rate of 12 percent per year, based on a year of 12 30-day months and a 360 day year, payable quarterly in cash and the principal amount will be repayable in a single sum on the sixth anniversary of issuance. The mezzanine note will be subordinate to the senior credit facility but will rank equally with the subordinated note. The mezzanine note can be prepaid only after the second anniversary of its issuance, which we refer to as the “no call provision,” and

~~thereafter~~In ~~may~~order ~~be prepaid in whole or in part subject~~ to ~~a make-whole payment computed on the principal amount prepaid multiplied by six percent in year three~~succeed, ~~three~~we ~~percent in~~will ~~year~~have ~~four, one percent in year five and zero percent thereafter. If the principal amount of the mezzanine note is declared due and payable by the holders due~~ to ankeep ~~event~~up ~~of default,~~with ~~in the first two years,~~ a ~~make-whole~~variety ~~payment~~ of ~~seven percent~~rapidly ~~will apply; after the first two years, in such event the~~changing ~~make-whole percentages set forth above will apply~~technologies. ~~Make-whole and~~Various nofactors ~~call~~could ~~provisions~~affect ~~will~~our ~~not~~ability ~~apply~~ to ~~prepayments~~keep ~~made pursuant~~pace to the exercise of the holder’s rights upon a change of control as described below. In the event of an initial public offering, the no call provision will not apply so long as the time of repayment, the amounts paid in respect of the mezzanine notes, together with ~~the~~these ~~increase in value of the associated warrants from date of issuance results in an annual internal rate of return of at least 25 percent, which we refer to as the required return~~changes. If such return is less than the required return, IITRI will receive the difference between the required return and the internal rate of return actually produced on the mezzanine note and associated warrants.

~~Transfer.~~Our Wesuccess ~~expect that~~will ~~the~~depend ~~mezzanine~~on ~~note~~our ~~will~~ability beto keep ~~transferable~~pace ~~only~~with tochanging ~~persons that~~technologies ~~qualify~~in asour Ucore business areas.S. ~~persons~~These ~~under~~technologies ~~the~~can ~~Internal~~change ~~Revenue~~rapidly. ~~Code, that~~Even ~~are~~if ~~U.S.~~we ~~citizens~~keep orup ~~U.S.~~with ~~entities~~the ~~not~~latest ~~owned,~~developments ~~controlled~~and ~~or influenced~~available technology, ~~directly~~newer services or ~~indirectly,~~technologies bycould ~~any~~negatively ~~foreign~~affect ~~person~~our inbusiness. ~~accordance~~Our ~~with~~success ~~the~~will ~~National~~depend ~~Industrial~~significantly ~~Security~~on ~~Program Operating~~our ~~Manual~~ability to develop, integrate and ~~that~~deliver ~~are~~technologically ~~not~~advanced ~~competitors~~services ofand ~~Newtek’s core~~solutions ~~business.~~at Athe ~~competitor~~same ~~for~~or ~~this~~faster ~~purpose~~pace ~~shall~~as ~~not~~our ~~include any~~competitors, ~~person~~many ~~that~~of ~~owns~~which ~~less~~have ~~than~~greater aresources ~~majority~~than ofwe ~~the~~do. ~~voting~~The ~~power~~Existing ofDebt aInstruments ~~competitor~~limit, orand ~~the~~our ~~right~~future todebt ~~nominate~~instruments ~~and~~may ~~elect~~limit, ahow ~~majority~~much ~~of such~~we ~~competitor’s~~may ~~board~~spend ofannually ~~directors,~~on ~~general~~capital ~~partners or managers~~expenditures. ~~Restrictions~~Those onlimitations ~~sale~~could orrestrict ~~assignment~~our ability to ~~competitors shall~~invest ~~not apply~~ in ~~the~~new ~~event~~and ofdeveloping ~~any~~technologies ~~Newtek~~in ~~payment~~one ~~default~~ or ~~bankruptcy.~~ ~~IITRI~~more ~~shall~~of ~~also~~our becore ~~entitled~~business areas. Failure to ~~transfer~~make ~~less than~~ the ~~entire~~appropriate ~~mezzanine~~investment ~~note~~could ~~but~~materially ~~only~~affect inour ~~amounts~~business, offinancial atcondition ~~least $2.5 million~~ and inoperating ~~increments~~results ofand ~~$500,000~~ability ~~in excess thereof except~~ to ~~transfer~~meet ~~the~~our ~~remaining~~financial ~~interest~~obligations.

InIf ~~the~~we ~~event~~fail ofto amaintain ~~proposed~~an ~~transfer~~effective system of ~~the mezzanine~~internal ~~note~~controls, we ~~will~~may ~~have~~not abe ~~right~~able ~~of first offer in respect of the mezzanine note. We refer~~ to ~~this~~accurately asreport our ~~right~~financial ofresults ~~first offer. The right of first offer will allow Newtek to make the holder of the note the first offer prior to any sale~~ or ~~assignment~~prevent of the note; in the event that the holder declines Newtek’s offer, Newtek will have a right of last look in the event the holder agrees to sell or assign the note for less than 90% of the amount offered by Newtekfraud.

~~Representations~~Effective ~~and~~internal ~~Warranties. We~~controls ~~expect~~are tonecessary ~~make~~for ~~certain representations~~us ~~and~~to ~~warranties~~provide ~~under~~reliable ~~the~~financial ~~mezzanine~~reports ~~note that will be similar to the representations~~ and ~~warranties~~effectively ~~contained~~prevent infraud. ~~the~~Any ~~senior~~inability ~~credit~~to ~~facility,~~provide ~~with~~reliable ~~appropriate~~financial ~~conforming revisions~~reports ~~and revisions reflecting customary market provisions~~ or asprevent ~~otherwise~~fraud ~~agreed~~could toharm byour ~~the parties~~business. ~~Pursuant~~We are continuing to aevaluate ~~separate agreement~~and, ~~IITRI~~where appropriate, onenhance ~~behalf~~our ofpolicies, ~~itself~~procedures and ~~its~~internal ~~affiliates,~~controls. ~~but not~~If ~~its~~we ~~assignees,~~fail ~~will agree~~ to ~~waive~~maintain ~~any acceleration rights in~~ the ~~mezzanine~~adequacy ~~note based on a breach~~ of ~~any operational~~ ~~representations~~our ~~and~~internal ~~warranties~~controls, ~~so long~~ as ~~IITRI~~such ~~and~~standards ~~its affiliates~~are ~~hold 50% or more of the mezzanine notes. In addition~~modified, ~~should~~ ~~any~~supplemented ~~event of default exist as a result of any breach of any operational representation~~ or ~~warranty,~~amended ~~IITRI,~~from ~~prior~~time to ~~any transfer~~time, ~~shall~~our ~~waive~~financial orstatements ~~cause~~may anot ~~subsequent~~accurately ~~assignee~~reflect ofour ~~the mezzanine~~financial ~~notes to waive any acceleration rights based on such event of default~~condition.

~~Covenants.~~ We ~~will issue~~identified ~~the~~a ~~mezzanine~~material ~~note~~weakness ~~under~~in ~~an indenture which will, among other things, contain customary covenants. These covenants will restrict~~ our ~~ability~~internal tocontrol ~~take~~over ~~certain~~financial ~~actions~~reporting ~~without~~as ~~the prior consent~~ of ~~the~~September 30, ~~holder of the mezzanine note including~~2014, ~~the payment~~related ~~of cash or property dividends in respect of Newtek’s capital stock other than distributions needed for the ESOP~~ to ~~satisfy its repurchase obligations and other customary exceptions subject to any restrictions contained in~~ the ~~senior bank debt or negotiated by the parties. Newtek also~~accounting ~~may~~for ~~not take any action to revoke its S corporation status without~~ the ~~consent~~2014 ~~of the holders of the mezzanine notes; provided that no consent shall be required to revoke its S corporation status in connection with the concurrent consummation of an initial public offering~~Refinancing. InWe ~~addition,~~have ~~we expect~~a ~~that~~remediation ~~the~~plan ~~mezzanine~~which ~~note~~includes ~~will~~appropriate ~~contain~~review ~~financial covenants similar to those contained in the senior credit facility, but relaxed on terms mutually agreeable among us, IITRI and the holders~~ of ~~the~~such ~~senior~~transactions ~~credit~~going ~~facility~~forward.

As a public ~~Events~~company, we will be required to conduct an annual evaluation of ~~Default~~our internal control over financial reporting and include a report of management on our internal control over financial reporting. We In addition, we expect to be required to have our independent registered public accounting firm report on the effectiveness of our internal control over financial reporting. If we are unable to conclude that we have effective internal control over financial reporting, or if our independent registered public accounting firm is unable to provide us with an unqualified report as to the ~~indenture~~effectiveness of our internal control over financial reporting, investors could lose confidence in the ~~mezzanine~~reliability ~~note~~of ~~will~~our ~~contain~~financial statements, which ~~customary~~could ~~event~~result in a decrease in the value of ~~default~~our ~~provisions~~common stock. In addition, even if we were to conclude, and our auditors were to concur, that our internal control over financial reporting provided reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles, because of its inherent limitations, internal control over financial reporting may not prevent or detect fraud or misstatements. This, in turn, could have a material adverse effect on our business, financial condition and results of operations.

An economic downturn could harm our business.

Our business, financial condition, operating results and ability to meet our financial obligations may be affected by various economic factors. Unfavorable economic conditions may make it more difficult for us to achieve or maintain revenue growth. In an economic recession, or under other adverse economic conditions which may arise from natural or man-made events, customers and vendors may be less likely to meet contractual terms and payment or delivery obligations. Weakness or deterioration of economic conditions may have a material adverse effect on our business, financial condition, operating results and ability to meet our financial obligations.

~~The~~Environmental ~~occurrence~~laws ofand anregulations ~~event~~and ofour ~~default~~use ~~will~~of ~~cause all~~hazardous ~~unpaid~~materials ~~indebtedness~~may ~~under~~subject ~~the~~us ~~mezzanine note~~ to ~~become~~ ~~immediately~~significant ~~due and payable~~liabilities.

~~Change~~Our ofoperations ~~Control. Upon~~are ~~the~~subject ~~occurrence~~to ofU.S. ~~a change of control of Newtek~~federal, ~~each~~state ~~holder~~and oflocal ~~mezzanine~~and ~~notes~~foreign ~~shall~~environmental, ~~have~~health ~~the~~and safety ~~right~~laws toand ~~require us to repurchase its mezzanine note~~regulations, atincluding ~~a repurchase~~laws ~~price equal to the principal amount plus accrued interest~~ and aregulations ~~premium~~relating ~~equal~~ to ~~one percent of~~ the ~~principal amount~~discharge, ~~subject~~storage, totreatment, ~~prepayment. For this purpose~~handling, adisposal ~~change~~and remediation of ~~control~~ ~~occurs~~regulated ~~when~~substances ~~(i) a~~and ~~third~~waste ~~party~~products, ~~(other~~such ~~than~~as ~~IITRI~~radioactive, ~~the~~ ~~ESOP,~~biochemical ~~the~~or ~~holders~~other ofhazardous ~~the~~materials ~~warrants~~ and ~~their affiliates) owns~~ ~~more~~explosives. ~~than~~We ~~50 percent~~may ofincur ~~our~~substantial ~~capital~~costs ~~stock~~in ~~assuming~~ the ~~exercise~~ offuture ~~all~~because ~~outstanding~~of ~~options~~modifications ~~and~~to ~~warrants~~current laws and ~~the conversion~~regulations, ofnew ~~all~~laws ~~outstanding~~and ~~convertible securities~~regulations, ~~or (ii) there~~new isguidance aor ~~sale~~new interpretation of ~~all~~existing laws or ~~substantially~~regulations, ~~all~~violations of ~~our~~environmental laws or ~~assets,~~required ~~but~~operating ~~excluding~~permits ~~any~~or ~~change~~discovery of ~~control~~previously ~~arising~~unknown ~~from an initial public offering~~contamination.

As a highly-leveraged company, our ability to meet our ~~Subordinated~~financial ~~Note~~and other future obligations depends on our future operating results and our ability to service our debt. Currently, the Existing Debt Instruments restrict our operations and any new debt agreements may restrict our operations in the future.

~~General~~We are a highly-leveraged company. WeIn ~~also~~connection with this offering, we intend to refinance all of our existing debt, ~~expect~~although there is no assurance we will be able to ~~issue~~do aso. ~~subordinated~~Our ~~note~~Existing ~~with~~Debt aInstruments ~~face~~require ~~value~~us to make regularly scheduled payments of principal and interest, prepay our debt under certain circumstances, and comply with certain financial ~~$41~~covenants, such as the maintenance of a minimum Consolidated EBITDA.~~9 million~~ Our ability to ~~IITRI~~pay our debt, ~~which~~to wecomply ~~refer~~with financial covenants, and to asfund ~~the~~working capital and planned capital expenditures depends on our ability to generate cash flow currently ~~subordinated~~and ~~note~~in the future. We cannot be certain our business strategy will succeed or that we will achieve our anticipated financial results. Our financial and operational performance depends upon a number of factors, many of which are beyond our control.

~~The~~Further, ~~subordinated~~the ~~note~~Existing isDebt ~~intended~~Instruments tocontain, ~~serve~~and ~~as part~~our offuture ~~the~~debt ~~purchase~~agreements ~~price~~may ~~paid~~contain, ~~for~~covenants ~~IITRI’s~~that ~~assets~~restrict inour ~~the acquisition.~~ability ~~Set~~to ~~forth~~engage in ~~below~~activities isthat amay ~~summary~~be ofin ~~the~~our ~~material~~long-term ~~terms of~~best ~~the~~interest, ~~subordinated~~including ~~note.~~financing ~~The~~future ~~final~~operations ~~terms~~or ofcapital ~~the~~needs ~~subordinated note~~or ~~have~~engaging ~~not~~in ~~been~~other ~~agreed~~business ~~upon~~activities. AsThe aExisting ~~result,~~Debt ~~the~~Instruments ~~final~~restrict, ~~terms~~among ~~may differ~~other ~~from~~things, ~~those~~our ~~described~~ability ~~below~~ and the ~~difference~~ability ~~may~~of beour ~~significant.~~ subsidiaries to:

~~The~~• ~~subordinated~~incur ~~note~~additional is expected to bear simple interest at a rate of six percent per year in the years one through six payable quarterly by the issuance of non-interest-bearing notes maturing at the same time as the subordinated note and 16 percent per year payable quarterly in cash during the seventh and eight years following closing of the asset purchase transaction, in each case based on a year of 30-day months and a 360 day year. Half of the principal amount outstanding under the subordinated note becomes due in 2009. The other half becomes due in 2010. The subordinated note will be subordinated debt ~~and shall rank behind the senior credit facility, but will rank equally with the mezzanine note.~~ ;

~~Transfer.~~• Wepay ~~expect that~~dividends ~~the subordinated note will be transferable only to persons that qualify as U.S. persons under the Internal Revenue Code and that are U.S. citizens~~ or ~~U.S.~~distributions entities not owned, controlled or influenced, directly or indirectly, by any foreign person in accordance with the National Industrial Security Program Operating Manual and that are not competitors of Newtek’s core business. IITRI shall also be entitled to transfer less than the entire subordinated note but only in amounts of at least $5.0 million and in increments of $1.0 million in excess thereof, except to transfer the remaining interest. A competitor for this purpose shall not include any person that owns less than a majority of the voting power of a competitor or the right to nominate and elect a majority of such competitor’s board of directors, general partners or managers. Restrictions on ~~sale~~our orcapital ~~assignment to competitors shall not apply in the event of any Newtek payment default or bankruptcy.~~ stock;

In• ~~the event of a proposed transfer of the subordinated note~~purchase, weredeem ~~will~~or ~~have~~retire ~~the~~capital ~~right~~stock toor ~~buy~~warrants ~~the subordinated note in preference~~ to ~~the~~purchase ~~proposed~~capital ~~purchaser~~stock atother ~~the price~~than ~~the purchaser offers~~ to ~~the~~satisfy ~~holder~~ESOP ofrepurchase ~~the~~obligations ~~subordinated note,~~that weexist ~~refer~~prior to this ~~as our right of first refusal.~~ offering;

~~Representations~~• ~~and~~prepay ~~Warranties. The~~or ~~subordinated~~repurchase ~~note will contain~~ certain limited representations and warranties as to matters of corporate authorization, execution and delivery, enforceability, legality, and capitalization and will exclude representations and warranties related to the operations of the business purchased. debt;

~~Covenants.~~• ~~The subordinated~~pay ~~note~~certain ~~will,~~amounts ~~among~~required ~~other~~under ~~things,~~our ~~contain~~equity-based ~~customary covenants regarding timely payment of principal~~ and ~~interest,~~incentive ~~as well~~compensation as a covenant restricting the payment of cash and property distributions, or dividends, in respect of Newtek’s capital stock other than distributions needed for the ESOP to satisfy its repurchase obligations and other customary exceptions subject to any restrictions contained in the senior bank debt or negotiated by the parties. plans;

•

purchase capital assets;

•

make acquisitions and investments;

•

issue or sell preferred stock of subsidiaries;

•

create liens on our assets;

•

enter into certain transactions with affiliates;

•

merge or consolidate with another company; or

•

transfer or sell assets outside the ordinary course of business.

From time to time we may require consents or waivers from our lenders or note holders to permit actions prohibited by one or more of the Existing Debt Instruments or our future debt agreements. If, in the future, lenders or note holders refuse to waive restrictive covenants and/or financial level requirements, we could be in default. We could be prohibited from undertaking actions necessary or desirable to maintain or expand our business. There is no guarantee we will be able to obtain consents or waivers from our lenders or note holders.

We may also need to seek additional capital in the future to meet current or future business ~~Events~~plans, ofmeet ~~Default~~working capital needs or for other reasons. We ~~expect~~There can be no assurance that ~~the~~we ~~indenture~~will ofbe ~~the~~able ~~subordinated~~to ~~note~~obtain ~~will~~future financings on acceptable terms, if at all. If we are unable to obtain alternative or additional financing arrangements in the ~~contain~~future, ~~customary~~or ~~events~~if we cannot obtain such financing on acceptable terms, we may not be able to execute our business strategies. Moreover, the terms of ~~default~~any ~~provisions~~such additional financings may restrict our financial flexibility, including: the debt we incur in the future, or may restrict our ability to manage our business as we intended.

•Risks ~~payment~~Related ~~default;~~to •an ~~breach~~Investment ofin ~~representations~~our ~~and~~Common ~~warranties;~~Stock ~~• uncured covenant defaults;~~ and this •Offering ~~bankruptcy and insolvency events.~~

~~The~~There ~~occurrence~~is ofno anexisting ~~event~~market offor ~~default~~our ~~will~~common ~~cause all~~stock, ~~unpaid~~and ~~indebtedness~~we ~~under~~do ~~the~~not ~~subordinated~~know ~~note~~if one will develop to ~~become~~provide you with ~~immediately~~adequate ~~due~~liquidity. ~~and~~If ~~payable~~our stock price fluctuates after this offering, you could lose a significant part of your investment.

Prior to this offering, there has not been a public market for our common stock. If an active trading market does not develop, you may have ~~Warrants~~difficulty selling any of our common stock that you buy. Negotiations among the Company and the underwriters will determine the initial public offering price for the shares, which may not be indicative of prices that will prevail in the open market following this offering. Consequently, you may not be able to sell shares of our common stock at prices equal to or greater than the price you paid in this offering. The market price of our common stock may be influenced by many factors including:

~~Mezzanine~~• ~~Warrant. In connection with~~ the ~~issuance~~failure of ~~the mezzanine~~securities ~~note,~~analysts ~~we will issue~~ to ~~IITRI,~~cover ~~as the holder of the mezzanine note, a warrant to purchase shares of~~ our common ~~stock,~~ ~~so that upon exercise of the warrant, the shares would account for 13 percent of our~~ stock atafter ~~the~~this ~~closing~~offering ~~date~~or ~~of the~~changes ~~acquisition,~~in onanalysts’ afinancial fully-diluted basis. The warrant will be exercisable at a per share of common stock price to be determined from the date of its issuance, until the sixth anniversary of the closing of the acquisition. Set forth below is a summary of the material terms of the mezzanine warrant. The final terms of the mezzanine warrant have not been agreed upon. As a result, these may differ from those described below and the difference may be significant. estimates;

~~Mezzanine~~• ~~Warrant~~our ~~Call~~or ~~and~~our ~~Put~~competitors’ ~~Rights. For~~announcements ~~a period~~ of ~~thirty~~significant ~~days~~contracts ~~prior to the sixth anniversary of the acquisition, we have the right to demand that the holder sell all~~ or ~~part~~acquisitions ~~of the mezzanine warrant to us, which we refer to as a call right, and the holder has the right to demand that we purchase all~~ or ~~part~~other ofbusiness the mezzanine warrant, which we refer to as a put right. Upon receipt of a notice from the holder that it intends to exercise all or any part of the mezzanine warrant, we also have a call right over the portion of the warrant that the holder intends to exercise. Furthermore, the holder also has a put right with respect to the mezzanine warrant during the thirty day period immediately following the occurrence of a change of control of Newtek. In connection with each of the call and put rights, the purchase price per share for the shares underlying the portion of warrant to be purchased will be the same per share price established in the most recent ESOP valuation. However, in connection with our call right that is available during the period thirty days prior to the sixth anniversary of the acquisition, the holder will have the right to request a new valuation, at its expense, and the purchase price per share will be based on the per share price established in that new valuation. Furthermore, in connection with the holder’s put rights, we will have the right to request a new valuation, at our expense, and the purchase price per share will be based on the per share price established in that new valuation. developments;

~~Mezzanine~~• ~~Warrant~~variations ~~Issuer~~in ~~Right~~quarterly ofresults ~~First Offer. Subject to certain conditions, prior to any sale by a holder to a third party~~ of any portion of the mezzanine warrant and/or shares of our common stock it has obtained by exercising all or some of the mezzanine warrant, we are entitled to a right of first offer over such proposed sale, which means that the holder must first make an offer to us to sell us the warrant portion and/or shares proposed to be sold by the holder, by requesting that we make an offer to them for such warrant portion and/or shares. If such holder does not elect to sell the warrant portion and/or share proposed to be sold, to us, at our last offer price, it will be entitled to sell the warrant portion and/or shares proposed to be sold to any third party, subject to certain limitations, and provided it does not offer to sell the warrant portion and/or share proposed to be sold, for less than 90 percent of our last offer price. If the holder proposes to sell the warrant portion and/or shares for less than 90 percent of our last offer price, it must once again make an offer to us to purchase the warrant portion and/or shares proposed to be sold, before it may sell them to a third party. operations;

~~Subordinated~~• ~~Warrant. In~~loss ~~connection with the issuance~~ of ~~the subordinated note, we will issue to the IITRI, as the holder of the subordinated note,~~ a ~~warrant~~large tocustomer ~~purchase~~or ~~shares of our common stock, so that upon exercise of the warrant, the shares would account for 27 percent of our common stock at the closing~~ supplier;

•

U.S. and international general economic conditions;

•

increased competition;

•

terrorist acts;

•

future sales of our common stock or the perception that such sales may occur;

•

investor perceptions of us and the industries in which our products are used; and

•

the other factors listed in “Risk Factors”.

As a result of these factors, investors in our common stock may not be able to resell their shares at or above the initial offering price. In addition, the stock market in general has experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of companies like us. These broad market and industry factors may significantly reduce the market price of our common stock, regardless of our operating performance.

If you purchase shares of common stock in this offering, you will incur immediate and substantial dilution.

Dilution is the difference between the offering price per share and the pro forma net tangible book value per share of our common stock immediately after the offering. The price you pay for shares of our common stock sold in this offering is substantially higher than our pro forma net tangible book value per share immediately after this offering. If you purchase shares of common stock in this offering, you will incur immediate and substantial dilution in the amount of $ per share. As a result of this dilution, investors purchasing shares of common stock in this offering may receive significantly less than the full purchase price that they paid for the stock purchased in this offering in the event of liquidation. See “Dilution”.

ofIf ~~the~~our ~~acquisition,~~operating onand afinancial ~~fully-diluted~~performance ~~basis.~~in ~~The warrant~~any ~~will~~given beperiod ~~exercisable~~does atnot ameet ~~per share of common stock price to be determined from~~ the ~~date of its issuance, until the eighth~~guidance ~~anniversary~~that ofwe ~~the~~provide ~~closing~~to of the ~~acquisition. Set forth below is a summary of the material terms of the subordinated warrant. The final terms of the subordinated warrant have not been agreed upon. As a result~~public, ~~these~~our ~~may~~stock ~~differ~~price ~~from those described below and the difference~~ may ~~be significant~~decline.

~~Subordinated~~We ~~Warrant~~may ~~Call~~provide ~~and~~public ~~Put~~guidance ~~Rights. For~~on aour ~~period~~expected ofoperating ~~thirty days prior to the seventh anniversary of the acquisition closing,~~ and ~~continuing~~financial ~~until~~results ~~the~~for ~~eighth~~future ~~anniversary,~~periods. weIn ~~have~~ the ~~right~~event ~~to demand that the holder sell up to 50 percent of the subordinated warrant, which~~ we ~~refer~~do toprovide aspublic ~~a call right~~guidance, ~~and~~any ~~the holder~~such ~~has~~guidance ~~the~~will ~~right~~be tocomprised ~~demand that we purchase up to 50 percent~~ of ~~the~~forward-looking ~~subordinated~~statements ~~warrant,~~subject ~~which we refer~~ to as ~~a put right. For a period of thirty days prior to~~ the ~~eighth anniversary~~risks ofand ~~the~~uncertainties ~~acquisition~~described ~~closing,~~in wethis ~~have~~prospectus ~~the~~and ~~right~~in ~~to call~~our upother topublic ~~100 percent of the warrant,~~ filings and ~~the~~public ~~holder has the right to put up to 100 percent of the warrant~~statements. ~~Furthermore,~~ ~~upon~~Our ~~receipt~~actual ofresults amay ~~notice~~not ~~from~~always ~~the~~be ~~holder~~in ~~that~~line ~~it intends~~with ~~to exercise all~~ or ~~part~~exceed ofany ~~the~~guidance ~~subordinated warrant or a portion thereof,~~ we ~~also~~ have ~~the~~provided, ~~right~~especially toin ~~exercise~~times ~~a call right over the portion~~ of ~~the~~economic ~~warrant that the holder intends to exercise~~uncertainty. ~~In connection with each of the call and put rights~~If, ~~the~~ ~~purchase price per share for the shares underlying the portion of warrant to be purchased will be the same per share price established~~ in the ~~most recent ESOP valuation. However~~future, ~~in connection with~~ our ~~call~~operating ~~rights,~~or ~~the~~financial ~~holder~~results ~~will~~for ~~have the right to request~~ a ~~new~~particular ~~valuation,~~period atdo ~~its~~not ~~expense, and the purchase~~meet ~~price~~any ~~per~~guidance ~~share~~we ~~will~~provide beor ~~based on~~ the ~~per~~expectations ~~share~~of ~~price~~investment ~~established in~~analysts ~~that~~or ~~new~~if ~~valuation. Furthermore, in connection with the holder’s put rights,~~ we ~~will~~reduce ~~have~~our ~~the~~guidance ~~right~~for tofuture ~~request a new valuation~~periods, ~~at our expense, and~~ the ~~purchase~~market price ~~per~~of ~~share will~~our becommon ~~based~~stock onmay ~~the~~decline ~~per~~as ~~share price established in that new valuation~~well.

~~Subordinated~~If ~~Warrant~~securities ~~Issuer~~analysts ~~Right~~do ofnot ~~First Refusal.~~publish ~~Subject~~research ~~to certain exceptions, prior to any sale by a holder to a third party of any portion of the subordinated warrant and/~~or ~~shares~~reports ofabout our ~~common~~ ~~stock~~business ~~it has obtained by exercising all~~ or ~~some~~if ~~portion of~~they ~~the~~publish ~~subordinated~~negative ~~warrant,~~evaluations ~~we are entitled to a right~~ of ~~first refusal~~our ~~over such proposed sale, which means that the holder~~common ~~must offer to sell the warrant portion and/or shares proposed to be sold by the holder~~stock, ~~to us on~~ the ~~same terms and at the same~~ price asof itour ~~has~~common ~~proposed~~stock tocould ~~sell to the third party, before it may complete the proposed transaction with the third party~~decline.

~~Subordinated~~The ~~Warrant~~trading ~~Voting~~market ~~Agreement. The~~for ~~holders~~our ofcommon stock will rely in part on the ~~subordinated~~research and ~~warrant~~reports ~~will~~that ~~agree~~industry toor ~~vote~~financial ~~those~~analysts ~~shares~~publish ofabout ~~common~~us ~~stock~~or ~~issued to~~our ~~them~~business. ~~upon~~We ~~exercise~~do ofnot ~~the~~currently ~~subordinated~~have ~~warrant,~~and inmay ~~the~~never ~~manner instructed~~obtain research coverage by ~~the~~industry ~~ESOP~~or ~~trustee~~financial onanalysts. ~~behalf~~If no or few analysts commence coverage of us, the ~~ESOP.~~trading ~~This~~price of our ~~voting~~stock ~~agreement~~would ~~will~~likely bedecrease. ~~binding~~Even ~~upon~~if ~~any~~we ~~assignee~~do obtain analyst coverage, if one or ~~transferee~~ more of the ~~subordinated~~analysts ~~warrant~~covering orour ~~shares~~business downgrade their evaluations of our stock, the price of our common stock ~~issued upon~~could ~~exercise~~decline. If one or more of ~~the~~these ~~subordinated~~analysts ~~warrant~~cease to cover our common stock, ~~except~~we ~~for~~could ~~any purchaser~~lose ~~that~~visibility ~~buys~~in the ~~common~~market for our stock, which in aturn ~~public~~could ~~offering~~cause our common stock price to decline.

~~Anti-Dilution~~We ~~Rights. The~~do ~~holders~~not ~~will~~currently ~~receive~~expect ~~anti-dilution rights in connection with the mezzanine and subordinated warrant. Subject~~ to ~~certain~~pay ~~limitations, if we sell~~ any ~~common stock,~~cash or warrants or rights to purchase common stock, securities convertible into common stock or stock appreciation rights, at a per share sale price lower than the then current fair market value of one share of common stock, the per share exercise price of the warrants will be lowered. The downward adjustment of the exercise price will be made on the basis of the difference between the per share sale price and the then current fair market value of our common stock, taking into account the number of shares being sold at the lower sale price and the number of shares still subject to outstanding mezzanine and subordinated warrants. In the event of any change in our outstanding common stock due to stock dividends~~, splits, reverse splits or other similar changes, the number of shares of our common stock subject to the mezzanine and subordinated warrants and the exercise price will be adjusted accordingly~~.

~~Drag-Along~~Alion ~~and~~has ~~Tag-Along~~never ~~Rights. Subject~~declared toany ~~certain~~cash ~~limitations,~~dividends. ifWe ~~the ESOP~~do ~~trust~~not ~~plans~~expect to ~~sell~~pay atany ~~least~~dividends ~~75 percent~~in ofthe ~~its~~future, ~~shares of~~and ~~our~~the ~~common~~terms ~~stock~~of toour aExisting ~~third~~Debt Instruments ~~party~~limit, ~~it may exercise its drag-along right~~ and ~~require~~our ~~the~~future ~~holders~~debt ofinstruments ~~mezzanine~~will ~~and subordinated~~limit, ~~warrants~~our ability to ~~participate~~do inso. ~~such~~We ~~sale~~currently onintend ~~a pro-rata basis. Subject~~ to ~~certain~~retain ~~limitations~~future earnings, if ~~the~~any, ~~ESOP trust plans~~ to ~~sell~~use atin ~~least~~operating ~~25 percent~~our ofbusiness. ~~its~~Any ~~shares~~determination ~~of our common stock~~ to apay ~~third~~dividends ~~party~~in ~~and~~the ~~did~~future ~~not~~will ~~already~~be ~~exercise~~at ~~its~~the discretion ~~drag-along~~of ~~right,~~our ~~the~~Board ~~holders~~ of ~~mezzanine~~Directors and ~~subordinated warrants~~will ~~may~~depend ~~exercise~~on ~~their~~our ~~tag-along~~operating ~~rights~~results, ~~and~~our ~~participate~~financial ~~in such~~condition, ~~sale~~contractual onrestrictions, aapplicable ~~pro-rata~~law ~~basis.~~and Inother ~~either~~factors ~~case,~~our ~~the~~Board ~~holders~~ of ~~mezzanine~~ ~~and~~Directors ~~subordinated~~determines ~~warrants~~to ~~will~~be ~~participate~~relevant. ~~in the sale by~~

Shares eligible for future sale by existing stockholders, including the ESOP Trust may cause the price of our common stock to decline.

Sales of substantial amounts of our common stock in the public market, or the perception that these sales may occur, could cause the market price of our common stock to decline. ASOF and Phoenix hold warrants to purchase up to 9,419,371 shares of our common stock, which, following consummation of this offering, including full exercise of the 2014 Warrants, will represent % of our shares of outstanding common stock. The holders of the 2010 Warrants hold warrants to purchase up to 602,741 shares of our common stock which following consummation of this offering, including full exercise of the 2014 Warrants, will represent the right to acquire % of our shares of outstanding common stock. This could also impair our ability to raise additional capital through the sale of our equity securities. Under our amended and restated certificate of incorporation, we are authorized to issue up to million shares of common stock, of which shares of common stock will be outstanding upon consummation of this offering. Of these shares, the shares of common stock sold in this offering will be freely transferable without restriction or further registration under the Securities Act by persons other than “affiliates”, as that term is defined in Rule 144 under the Securities Act. Our directors and executive officers and certain of our principal stockholders, who collectively beneficially own shares, will enter into lock-up agreements, pursuant to which they will agree not to sell or transfer, directly or indirectly, any shares of our common stock for a period of 180 days from the date of this prospectus, subject to extension in certain circumstances. Upon the expiration of these lock-up agreements, all of these shares of common stock will be tradable subject to limitations imposed by Rule 144 under the Securities Act. See “Shares Eligible for Future Sale”.

~~exercising~~As ~~an appropriate portion~~ of ~~the~~December 31, ~~warrant~~2014, ~~and~~ ~~then~~there ~~selling~~were ~~the~~13,106,777 shares of ~~our~~ common stock ~~obtained~~held ~~through~~by our ESOP Trust ~~such~~which ~~exercise~~will asbe ~~well~~eligible asfor ~~some~~future orsale, ~~all~~subject to the applicable volume, manner of sale, holding period and other limitations of Rule 144. After the ~~shares~~completion of ~~our~~this offering, the common stock itheld ~~has~~by ~~previously~~our ~~obtained,~~ESOP ifTrust ~~any,~~will byaccount ~~exercising~~for ~~the~~approximately ~~warrant,~~ % onof ~~the~~our ~~same~~outstanding ~~terms~~common ~~and~~stock at(after taking into account full exercise of the ~~same~~2014 ~~price~~Warrants).

Taking ~~IITRI~~advantage ~~Right~~ of ~~First~~the ~~Offer. Subject~~reduced todisclosure ~~certain~~requirements ~~exceptions,~~applicable ~~before we may make an offer~~ to a“emerging ~~third~~growth ~~party~~companies” tomay ~~sell~~make ~~any shares of~~ our ~~common~~ ~~stock (or any securities convertible or exercisable into~~ common stock, or other rights to common stock), we must first make an offer to IITRI to sell them a pro rata share of such securities, based on IITRI’s current percentage holdings in Newtek so long as IITRI still holds a certain portion of either the mezzanine warrant or the subordinated warrant. If IITRI chooses not to participate, we will be entitled to sell the securities to any third party, provided we do not offer to sell the securities for less ~~than~~attractive ~~90 percent of the original offer price. If we propose~~ to sell the securities for less than 90 percent of the original offer price, we must once again make an offer to IITRI to purchase a pro rata share of the securities, before we may sell the securities to a third partyinvestors.

~~Expiry~~As ofa ~~Certain~~company ~~Rights~~with less than $1. ~~The~~0 ~~call~~billion ~~and~~in ~~put~~revenue ~~rights,~~during ~~the drag-along~~our ~~and~~last ~~tag-along~~fiscal ~~rights~~year, ~~and~~we ~~the~~qualify ~~right~~as ofan ~~first~~“emerging ~~refusal~~growth company” as ~~and~~defined in the ~~rights~~Jumpstart ofOur ~~first~~Business ~~offer~~Startups ~~all~~Act ~~expire~~of in2012, ~~the~~or ~~mezzanine~~JOBS ~~and subordinated~~Act. ~~warrants,~~An ~~upon~~emerging ~~the~~growth ~~date~~company ~~that~~may ~~our~~take ~~initial~~advantage ~~offering~~ of ~~securities~~specified toreduced ~~the~~reporting ~~general~~and ~~public~~other isrequirements ~~consummated,~~that ifare ~~ever~~otherwise applicable generally to public companies. These provisions include:

~~Registration~~• Rights. After 180 days following the date that our common stock first becomes available to the public on a stock exchange, if ever, the holders of a majority of the mezzanine warrant will be entitled to one right to require that we register for sale by the holders some or all of the shares underlying the remaining portion of the warrant as well as some or all of the shares that the holders have obtained by exercising the warrant. However, if the holders are ~~unable to sell at least 60 percent of the shares they~~ required us to ~~register,~~ ~~the~~have ~~holders~~only ~~will~~two beyears ~~entitled~~of toaudited ~~one~~financial ~~more~~statements ~~right~~and ~~to require~~only ustwo toyears ~~register some or all~~ of ~~shares~~related ~~underlying~~Management’s ~~the remaining~~Discussion ~~portion~~and Analysis of ~~the~~Financial ~~warrant~~Condition asand ~~well~~Results ~~as some or all~~ of ~~the shares~~Operations ~~that the holders have obtained by exercising the warrant.~~ disclosure;

~~Subject~~• towe ~~certain~~are ~~limitations,~~not ~~the~~required ~~holders~~to ~~will also~~engage bean ~~entitled~~auditor to ~~require~~report ~~that~~on weour ~~register~~internal ~~some~~controls orover ~~all~~financial ofreporting ~~the shares~~pursuant ~~underlying~~to ~~the~~Section ~~remaining~~404(b) ~~portions~~ of the ~~mezzanine~~Sarbanes-Oxley ~~and subordinated~~Act ~~warrant as well as some or all~~ of ~~the shares that the holders have obtained by exercising the warrants, in any registration initiated by us.~~ 2002;

~~Director~~• ~~Designation Rights.~~we ~~The mezzanine note, the subordinated note and the warrants~~ are ~~expected~~not torequired ~~entitle their holders, respectively,~~ to ~~each~~comply ~~designate~~with ~~one~~any ~~member~~requirement ofthat ~~our~~may ~~board of~~be ~~directors,~~adopted ~~provided~~by ~~that~~ the ~~board~~Public ofCompany ~~directors~~Accounting ~~shall~~Oversight ~~not have~~Board ~~more~~regarding ~~than~~mandatory ~~twelve~~audit ~~members~~firm ~~and~~rotation ~~provided~~or ~~that~~a ~~such~~supplement ~~directors otherwise~~to ~~meet~~ the ~~eligibility requirements for our directors. These rights to designate directors may be transferred at IITRI~~auditor’s ~~discretion~~report ~~with~~providing ~~any~~additional ~~transfer~~information ofabout the ~~mezzanine~~audit ~~note, the subordinated note~~ and the ~~warrants.~~financial Westatements ~~expect that the rights with respect to each of the three holder classes~~ (~~mezzanine note~~i.e., ~~subordinated note and warrants) will survive until the earlier of (i)~~ an ~~initial~~auditor ~~public~~discussion ~~offering,~~ and ~~(ii) the~~ time at which the holder class no longer remains outstanding — for example, upon repayment of all indebtedness evidenced by the mezzanine note and the subordinated note, as the case may be, or when the warrants have been fully exercised, repurchased by us or terminated without exercise. analysis);

•

we are not required to submit certain executive compensation matters to stockholder advisory votes, such as “say-on-pay”, “say-on-frequency” and “say-on-golden parachutes”; and

•

We may take advantage of these provisions until the last day of our fiscal year following the fifth anniversary of the completion of this offering or such earlier time that we are no longer an emerging growth company. We would cease to be an emerging growth company if we have more than $1.0 billion in annual revenue, have more than $700 million in market value of our common stock held by non-affiliates, or issue more than $1.0 billion of non-convertible debt over a three-year period. We may choose to take advantage of some but not all of these reduced burdens. We have not elected to adopt the reduced disclosure in this prospectus, except for reduced disclosure with respect to the Selected Consolidated Financial Data.

We cannot predict if investors will find our common stock less attractive if we elect to rely on these exemptions, or if taking advantage of these exemptions would result in less active trading or more volatility in the price of our common stock.

~~Use~~CAUTIONARY ofNOTE ~~Proceeds~~ REGARDING FORWARD LOOKING STATEMENTS

~~All~~Information ~~the~~included ~~proceeds~~in ~~from~~ this ~~offering~~prospectus ~~will~~may becontain ~~used by~~forward-looking ~~State~~statements ~~Street~~that involve risks and uncertainties, ~~the~~including ~~ESOP~~statements herein ~~trustee~~regarding the Transactions, our ability to ~~purchase~~meet ~~shares~~our ~~of Newtek’s~~debt ~~common~~service ~~stock.~~obligations, Weour ~~will~~future ~~then~~capital ~~contribute~~expenditures, ~~the~~our ~~proceeds from~~plans, ~~the~~objectives, ~~sale~~goals, beliefs, business strategies, future events, business conditions, results of operations, financial position and our ~~common~~business ~~stock~~outlook toand ~~the~~business ~~purchase~~trends. ~~price~~These westatements ~~will pay~~relate to ~~IITRI~~future plans, objectives, expectations and intentions and are for illustrative purposes only. These statements may be identified by the ~~acquisition~~use of ~~substantially~~words ~~all~~such ofas “believe”, ~~its~~“expect”, “intend”, “plan”, “anticipate”, “likely”, “will”, “pro forma”, “forecast”, “projections”, “could”, ~~assets~~“estimate”, “may”, “potential”, “should”, “would”, and similar expressions.

Factors Wethat ~~need~~could tocause ~~raise~~actual atresults ~~least~~to ~~$30.0 million~~differ materially from ~~IITRI~~ ~~rollovers~~anticipated orresults ~~HFA~~include, ~~transfers~~but ofare ~~your~~not ~~eligible~~limited ~~IITRI and HFA retirement plan account balances into the ESOP component in order~~ to: ~~complete the acquisition of IITRI’s assets.~~

~~Employees~~• ~~may elect to transfer up to a maximum of $l million from elections to invest their existing retirement funds in our ESOP component~~U. ~~The ESOP will use all these additional funds to purchase additional shares of our common stock~~S. Wegovernment ~~may,~~decisions ~~in turn, use some or all of the additional funds we receive from the sale of our common stock~~ to ~~the~~reduce ~~ESOP~~funding for ~~working~~projects capital and general corporate purposes, unless IITRI permits us to contribute some or all of these additional funds to the cash component of the purchase price paid to IITRI. This would give us the option to decrease the amount we ~~will owe IITRI under the subordinated note. We would only do this if we could agree with IITRI on a mutually acceptable price.~~ support;

We• have been paying and will pay our expenses related to the sale of the KSOP interests and the acquisition of IITRI’s assets from available cash and funds available under our existing and new senior credit facilitiesU.S. Wegovernment ~~will also~~debt ~~pay~~ceiling uplimitations, tosequestration, ~~$2.0 million~~continuing ofresolutions, ~~IITRI’s~~or ~~acquisition expenses~~other ~~incurred~~similar inFederal ~~its~~Government ~~capacity~~budgetary asor ~~seller.~~ funding issues;

If• wedelays doin ~~not~~the ~~receive~~federal ~~proceeds~~budget ofprocess atincluding ~~least $30~~U.~~0 million~~S. ~~from~~government ~~the~~shutdowns ~~sale of KSOP interests,~~ and ~~therefore~~ atthreatened ~~least $30.0 million from the sale of our common stock to the ESOP, we may:~~ shutdowns;

• ~~attempt~~delays toin ~~finance~~payments ~~the shortfall~~ from ~~other~~U.S. ~~sources,~~government ~~if available~~customers; ~~or • elect to terminate this offering and the acquisition of IITRI’s assets.~~

In• ~~the~~competitive ~~event~~factors wesuch ~~are~~as ~~not~~pricing ~~successful~~pressures inand ~~raising~~competition ~~the necessary proceeds~~ to ~~complete~~hire ~~the acquisition, then your employment with IITRI or HFA will continue~~ and ~~your~~retain ~~retirement plan balances will remain in the IITRI or HFA retirement plans.~~ employees;

~~For~~• ~~more~~termination ~~information~~of ~~about~~our ~~how~~material ~~the~~contracts ~~purchase~~or ~~price in~~our ~~the~~inability ~~acquisition~~to ~~was~~replace ~~determined~~or ~~and~~renew ~~from whom we are obtaining~~ our ~~funds,~~material ~~please read “The Acquisition” and “Description of Notes and Warrants.”~~ contracts;

•

failure to retain our existing government contracts;

•

suspension or debarment from doing business with the U.S. government;

•

our ability to achieve or manage the growth of our business;

•

our ability to retain and development members of our senior management team;

•

failure of our subcontractors to perform contractual obligations;

•

changes in market conditions including material changes in laws or regulations affecting our business;

•

employee misconduct, security breaches or the occurrence of other operational risks;

•

security threats and breaches, including cybersecurity threats and other disruptions;

•

an inability to recover contract revenue;

•

failure to comply with procurement laws and regulations or obtain security clearances;

•

economic downturns; and

•

our ability to meet our financial and other future obligations and to service our debt.

There may be other factors that may cause our actual results to differ materially from the forward-looking statements, including factors disclosed under the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this prospectus. You should evaluate all forward-looking statements made in this prospectus in the context of these risks and uncertainties.

Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management’s view only as of the date of this prospectus. We undertake no obligation to update any of the forward-looking statements made herein, whether as a result of new information, future events, changes in expectations or otherwise.

~~Plan~~USE ofOF ~~Distribution~~ PROCEEDS

~~Neither~~We ~~underwriters~~estimate ~~nor~~that ~~broker-dealers~~the ~~will participate~~net inproceeds ~~selling~~we ~~efforts~~will ~~related~~receive tofrom the sale of shares of our ~~KSOP~~common stock in this offering, after deducting underwriting ~~interests~~discounts and commissions and estimated offering expenses payable by us (assuming the shares are sold at the midpoint of the range on the cover of the prospectus), will be approximately $ million, or $ million if the underwriters exercise their option to purchase additional shares in full.

•A $1.00 increase (decrease) in the ~~one-time~~assumed ~~ESOP~~public ~~investment~~offering ~~election~~price ~~available~~of to$ per ~~eligible~~share ~~IITRI~~would ~~and~~increase (decrease) ~~HFA~~the ~~employees;~~net •proceeds inthat ~~any~~we ~~future~~will ~~one-time~~receive ~~ESOP~~from ~~investment~~this ~~elections~~offering ~~made~~by ~~available~~approximately to$ million, ~~new~~assuming ~~hires~~the number of ~~Newtek;~~shares oroffered •by ~~relating~~us, toas ~~pre-tax~~set ~~payroll~~forth ~~deferrals~~on the cover of this prospectus, remains the same and after deducting the underwriting discounts and commissions and estimated offering expenses payable by us.

~~The~~We ~~KSOP~~intend ~~interests will not be traded and may not be sold except~~ to ~~Newtek~~use ~~upon your separation from service with~~the ~~Newtek.~~net ~~The~~proceeds ~~sales of our KSOP interests are being made pursuant to exemptions~~ from ~~registration~~this ~~under state securities laws. In the event that an applicable exemption from registration is not available under the laws of any state~~offering, ortogether inwith the ~~event~~proceeds ~~that qualification~~ of ~~the~~debt ~~securities~~incurred inpursuant ~~any~~to ~~state is impracticable in~~ the ~~judgment~~IPO ~~of management~~Refinancing, ~~the offering and any future sales of KSOP interests will not be available~~ to ~~employees~~repay: ~~in those states.~~

~~Distribution~~• all outstanding amounts under the Existing Revolving Credit Facility, which matures on April 30, 2018 and bears interest at a rate of daily one-month London Inter-bank Offered Rate, or ~~Dividend~~LIBOR, ~~Policy~~ plus 475 basis points;

~~Unlike~~• ~~regular~~$ ~~C corporations~~million, Srepresenting ~~corporations~~all ~~do not~~outstanding ~~pay~~amounts ~~“dividends.”~~(including ~~Rather,~~accrued Sand ~~corporations~~unpaid ~~make “distributions.”~~interest ~~Use~~and ofany ~~the~~applicable ~~term “distributions”~~premiums) inunder ~~this~~Tranche ~~context~~A ~~is unrelated to the term when used in the context~~ of ~~our repurchase obligation. To avoid confusion, when referring to a distribution that would constitute a dividend in a C corporation, we will use~~ the ~~term distribution/dividend.~~Existing WeFirst doLien ~~not~~Term ~~expect to pay any distributions/dividends. We currently intend to retain future earnings~~Loan, ifwhich ~~any,~~matures ~~for use in the operation of our business. Any determination to pay cash distributions/dividends in the future will be at the discretion of our board of directors and will be dependent~~ on ~~our~~August ~~results of operations~~18, ~~financial~~2018 ~~condition, contractual restrictions~~ and ~~other~~bears ~~factors~~interest ~~determined~~at toa ~~be relevant~~rate ~~by our board~~ of ~~directors,~~one-month asLIBOR ~~well~~with asa ~~applicable~~floor ~~law. We expect that the terms~~ of ~~the~~1.00% ~~senior~~plus ~~credit~~700 ~~facility,~~basis ~~the mezzanine note and the subordinated note will prohibit us from paying distributions/dividends without the consent of the respective lenders.~~ points;

•

$ million, representing all outstanding amounts (including accrued and unpaid interest and any applicable premiums) under Tranche B of the Existing First Lien Term Loan, which matures on August 18, 2019 and bears interest at a rate of one-month LIBOR with a floor of 1.00% plus 1,000 basis points;

•

$ million, representing all outstanding amounts (including accrued and unpaid interest and any applicable premiums) under the Existing Second Lien Term Loan, which matures on February 18, 2020 and bears interest at a rate of 14.25% per annum; and

•

$ million, representing all outstanding amounts (including accrued and unpaid interest and any applicable premiums) under the Existing Third Lien Notes, which mature on February 18, 2020 and bear interest at a rate of at 15.25% per annum.

See “Capitalization” and “Description of Certain Indebtedness”.

The net proceeds from the Existing First Lien Term Loan, the Existing Second Lien Term Loan and the Existing Third Lien Notes, and a portion of the net proceeds from the Existing Revolving Credit Facility, were used to refinance a substantial majority of our then-existing debt in August 2014 in the 2014 Refinancing. See “Description of Certain Indebtedness”.

A portion of the net proceeds from this offering and debt incurred in the IPO Refinancing will be used to repay or redeem debt held by certain of our affiliates. See “Certain Relationships and Related Party Transactions”.

~~Capitalization~~ DIVIDEND POLICY

~~The~~Alion ~~following~~has ~~table~~never ~~sets~~declared ~~forth~~any ~~our~~cash ~~capitalization as~~dividends. Following the completion of ~~March 15~~this offering, ~~2002~~we ondo annot ~~historical~~expect ~~basis~~to ~~and~~pay onany adividends ~~pro~~in the future, ~~forma~~and asthe ~~adjusted~~terms ~~basis~~of our debt instruments will limit our ability to ~~reflect~~do ~~the~~so. ~~incurrence~~We ofcurrently ~~debt~~intend to retain future earnings, if any, to use in ~~connection~~ ~~with~~operating our business. Any determination to pay dividends in the ~~acquisition~~future ofwill ~~substantially~~be ~~all~~at the discretion of our Board ~~IITRI~~of Directors and will depend on our operating results, financial condition, contractual restrictions, applicable law and other factors our Board of Directors determines to be relevant. See “Management’s ~~assets~~Discussion and ~~the~~Analysis ~~capital~~of ~~structure~~Financial Condition and Results of ~~Newtek~~Operations – Liquidity and Capital Resources”.

You should read this table together with “Selected Financial Data,” “Unaudited Pro Forma Consolidated Financial Data,” our consolidated financial statements and the notes to those statements, and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included elsewhere in this prospectus.

			(in thousands)
			As of
			March 15, 2002
					Pro Forma
			Historical		As Adjusted
			(unaudited)
Cash			$	663	$	7,863
Current portion of long-term debt				19,145		27,645
Long-term debt, excluding current portion:
	Existing third party debt			1,116		1,116
	Senior term note			—		28,200
	Mezzanine note			—		16,511
	Subordinated note			—		32,162
		Total debt		1,116		77,989
Shareholder’s equity				32,123		44,427
		Total capitalization	$	33,239	$	122,416

~~Selected~~CAPITALIZATION ~~Financial Data~~

The following table ~~presents~~sets ~~selected historical and pro forma consolidated financial data for Newtek for the periods and dates indicated. The information set~~ forth ~~below should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and~~ our ~~historical~~cash ~~consolidated financial statements~~ and ~~notes~~cash toequivalents ~~those statements included elsewhere in this prospectus. The consolidated operating results data for the years ended September 30, 1999, 2000~~ and ~~2001, and the consolidated balance sheet data as of September 30, 2000 and 2001, are derived from, and are qualified by reference to,~~ our ~~audited~~capitalization consolidated financial statements included elsewhere in this prospectus. The consolidated operating results data for the 24-week periods ended March 16, 2001, and March 15, 2002, and the consolidated balance sheet data as of ~~March 15,~~ 2002, are derived from, and are qualified by reference to, our unaudited consolidated financial statements included elsewhere in this prospectus. The consolidated operating results data for the years ended SeptemberDecember 3031, ~~1997~~ ~~and~~2014: 1998, and the consolidated balance sheet data as of September 30, 1997, 1998 and 1999, are derived from our unaudited consolidated financial data that are not included in this prospectus. The unaudited pro forma financial information gives effect to the incurrence of debt and the acquisition of IITRI’s assets as if those transactions had been consummated on October 1, 2000, as described in “Unaudited Pro Forma Financial Data.”

~~The~~(1) ~~historical~~on ~~consolidated~~a ~~financial information has been carved out from the consolidated financial statements of IITRI using the~~ historical results of operations and bases of assets and liabilities of the portion of IITRI’s business to be sold and gives effect to allocations of expenses from IITRI. Our historical consolidated financial information may not be indicative of our future performance and does not necessarily reflect what our financial position and results of operations would have been had we operated as a separate, stand-alone entity during the periods presented. basis;

(in2) ~~thousands~~on ~~except~~an ~~per~~as ~~share~~adjusted ~~data)~~ basis to give effect to the IPO Refinancing as if it had occurred on December 31, 2014;

	Year Ended September 30,																24-Week			24-Week
														Pro Forma			Period Ended			Period Ended
	1997		1998			1999		2000			2001			Fiscal 2001			March 16, 2001			March 15, 2002
Consolidated Operating Data:
Contract revenue	$	107,515	$	94,324		$	117,500	$	156,137		$	193,152		$	193,152		$	85,165		$	88,554
Direct contract expenses		80,750		72,404			88,731		111,122			140,555			140,555			61,454			64,923
Operating expenses		24,434		22,081			25,463		39,691			41,774			48,334			18,731			20,647
Operating income (loss)		2,331		(161	)		3,306		5,324			10,823			4,263			4,980			2,984
Other income (expense)(1), (2)		231		4,170			12		(694	)		(1,072	)		(10,416	)		(689	)		(191	)
Income tax (expense) benefit(3)		—		—			246		(398	)		(302	)		(302	)		(269	)		(366	)
Net income (loss)	$	2,562	$	4,009		$	3,564	$	4,232		$	9,449		$	(6,455	)	$	4,022		$	2,427	(4)
Unaudited pro forma as adjusted basic and diluted earnings (loss) per common share(5)														$	(2.15	)
Consolidated Balance Sheet Data at End of Period:
Net accounts receivable	$	26,630	$	23,300		$	37,706	$	59,654		$	56,095					$	56,778		$	60,435
Total assets		41,466		42,930			65,328		85,460			74,153						73,626			81,176
Current portion of long-term debt		—		—			5,500		3,646			141						705			19,145
Long-term debt, excluding current portion		—		—			2,642		22,289			11,886						17,923			1,116
Long-term deferred gain on sale of building to Illinois Institute of Technology, excluding current portion		—		—			—		—			4,054						4,319			3,787

(3)

on a pro forma basis to give effect to the Transactions, including the consummation of this offering and the IPO Refinancing, and the elimination of all of our outstanding Series A Preferred Stock and the full exercise of the 2014 Warrants, as if each had occurred on December 31, 2014.

Debt is presented at carrying value, net of original issuance discount and unamortized transaction costs.

You should read this table in conjunction with our audited and unaudited interim financial statements and related notes included elsewhere in this prospectus, as well as the information set forth under the captions “Use of Proceeds”, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Description of Other Indebtedness”.


	As of December 31, 2014
	Actual			As Adjusted		Pro Forma
	(In thousands)
Cash and cash equivalents(a)	$	12,894		$		$

Indebtedness:
New Credit Agreement(a)(b)		—
Existing Revolving Credit Facility		39,812			—		—
Existing First Lien Term Loan
Tranche A		95,709			—		—
Tranche B		160,329			—		—
Existing Second Lien Term Loan(c)		59,460			—		—
Existing Third Lien Notes(d)		196,566			—		—
Unsecured Notes(e)		23,999			—		—

Total indebtedness		575,875

Total equity:
Redeemable common stock(f)(g)		32,105					—
Common Stock(f)(g)		—			—
Series A Preferred Stock(h)		2,339					—
2014 Warrants		6,317					—
2010 Warrants(i)		20,785
Accumulated other comprehensive loss		(19	)
Accumulated deficit		(263,358	)

Total shareholders’ deficit		(201,831	)

Total capitalization	$	374,044		$		$

(a)

A $1.00 increase (decrease) in the assumed public offering price of $ per share would increase (decrease) the net proceeds that we will receive from this offering by approximately $ million, assuming the number of shares offered by us, as set forth on the cover of this prospectus, remains the same and after deducting the underwriting discounts and commissions and estimated offering expenses payable by

		Year Ended September 30,																	24-Week			24-Week
																	Pro Forma		Period Ended			Period Ended
		1997			1998			1999			2000			2001			Fiscal 2001		March 16, 2001			March 15, 2002
Other Data
Depreciation and amortization		$	2,271		$	1,887		$	1,832		$	3,754		$	3,488		$	10,048	$	1,731		$	1,512
EBITDA(6)			4,868			5,907			5,383			9,773			14,134			11,928		6,701			4,455
Capital expenditures			574			2,489			4,213			2,795			1,940					121			1,987
Cash flows provided by (used in):
	Operating activities	$	8,188		$	4,578		$	1,608		$	(4,028	)	$	9,880				$	(69	)	$	(4,207	)
	Investing activities		(574	)		4,511			(12,264	)		(2,967	)		9,863					12,060			(1,987	)
	Financing activities		(6,116	)		(1,260	)		4,683			4,106			(19,926	)				11,714			6,617
Funded contract backlog(7)												158,000			166,000								151,000
Unfunded contract backlog(8)												779,000			638,000								694,000
Number of employees			1,099			1,013			1,074			1,334			1,458					1,370			1,473

us. We intend to use any increased proceeds to reduce borrowings under the New Credit Agreement and/or increase our pro forma cash and cash equivalents, and any decrease in net proceeds would increase borrowings under the New Credit Agreement and/or reduce our pro forma cash and cash equivalents.

(1)	Other income (expense) in 2000 includes a gain of $1.3 million on the sale of land in Annapolis, Maryland and a $0.5 million loss in equity of an affiliate.
(2)	Other income for 1998 includes a gain of $4.3 million on the sale of our Westport facility.
(3)	Income tax expense (benefit) primarily relates to income (loss) of our for-profit subsidiary, HFA.
(4)	The decrease in net income for the 24-week period ended March 15, 2002, as compared to the 24-week period ended March 16, 2001, is primarily attributable to costs related to this offering and the acquisition.
(5)	Our historical capital structure is not indicative of our prospective capital structure and, accordingly, historical earnings per share information has not been presented. Pro forma diluted earnings per common share is computed based upon three million shares of our stock outstanding after this offering.
(6)	EBITDA refers to net income before income taxes, interest expense, depreciation of fixed assets and amortization of goodwill. EBITDA is not a measure of financial performance under accounting principles generally accepted in the United States of America. We may calculate EBITDA differently than other companies. You should not consider it in isolation from, or as a substitute for, net income or cash flow measures prepared in accordance with accounting principles generally accepted in the United States of America or as a measure of profitability or liquidity. We have included EBITDA as a supplemental disclosure because it may provide useful information regarding our ability to service debt and to fund capital expenditures. Our ability to service debt and fund capital expenditures in the future, however, may be affected by other operating or legal requirements.
(7)	Funded backlog represents the total amount of contracts that have been awarded and whose funding has been authorized minus the amount of revenue booked under the contract from its inception to date.
(8)	Unfunded backlog refers to contracts which have been awarded but whose funding has not yet been authorized for expenditure.

(b)	We expect to enter into a new credit agreement or agreements pursuant to the IPO Refinancing, which we expect will provide for availability of up to $ million.

(c)	Includes $3.8 million of issued and accrued PIK Interest.

(d)	Includes $7.8 million of issued and accrued PIK Interest.

(e)	All amounts previously outstanding in respect of the Unsecured Notes were repaid in January 2015.

(f)

The common stock currently held by the ESOP Trust is redeemable because, under certain circumstances, ESOP beneficiaries can require Alion to purchase shares distributed by the ESOP Trust at the then redemption value. We expect that following this offering, we will no longer be required to redeem ESOP shares because there will be an established securities market for the public sale of our stock.

(g)	Actual: $0.0001 par value, 24,000,000 shares authorized, 13,103,912 shares issued and outstanding as of December 31, 2014; pro forma: $0.0001 par value, shares authorized, shares issued and outstanding.

(h)	Actual: $0.01 par value, 5,000,000 shares authorized, 70 shares issued and outstanding; pro forma: $0.01 par value, shares authorized, and no shares issued or outstanding.

(i)	After consummation of this offering and the full exercise of the 2014 Warrants, the 2010 Warrants would be exercisable for shares of our common stock.

~~Unaudited~~DILUTION ~~Pro Forma Consolidated Financial Data~~

~~The~~If ~~unaudited~~you ~~pro~~invest ~~forma~~in ~~consolidated~~our ~~statements of~~common ~~operations~~stock, ~~and~~your ~~unaudited~~interest ~~pro~~will ~~forma~~be ~~consolidated~~diluted ~~balance~~to ~~sheet set~~the ~~forth~~extent ~~below~~of ~~should~~the bedifference ~~read~~between inthe ~~connection~~initial ~~with,~~public ~~and~~offering ~~are~~price per ~~qualified~~share byof ~~reference to,~~ our ~~consolidated~~common ~~financial~~stock ~~statements~~ and ~~related~~the ~~notes,~~net astangible ~~well~~book asvalue ~~“Management’s~~per ~~Discussion and~~share ~~Analysis~~ of ~~Financial~~our ~~Condition~~common ~~and~~stock ~~Results~~after this offering. Dilution results from the exercise of ~~Operations,”~~ ~~included~~the ~~elsewhere~~2014 inWarrants ~~this~~and ~~prospectus.~~the ~~We believe~~fact that the ~~assumptions~~initial ~~used~~public inoffering ~~the~~price ~~preparation~~per share of ~~this~~common stock is ~~unaudited~~substantially ~~pro~~in ~~forma~~excess ~~information~~of ~~provide~~the anet ~~reasonable~~tangible ~~basis~~book ~~for presenting~~value ~~the~~per ~~significant~~share ~~effects~~of ~~directly~~our common stock attributable to the ~~transactions~~ ~~discussed~~existing ~~below.~~shareholders ~~The~~for ~~unaudited~~our ~~pro~~presently ~~forma consolidated~~outstanding ~~statements~~shares of ~~operations~~common ~~and~~stock. ~~unaudited~~We ~~pro~~calculate ~~forma consolidated~~net ~~balance~~tangible ~~sheet~~book ~~are~~value ~~not~~per ~~necessarily~~share ~~indicative~~ of ~~the~~our common stock ~~results~~by ~~that~~dividing ~~would~~the ~~have~~net ~~been~~tangible ~~reported~~book ~~had~~value ~~such~~(total ~~events~~consolidated ~~actually occurred~~tangible onassets ~~the~~less ~~dates~~total ~~described~~consolidated ~~below,~~liabilities) ~~nor~~by ~~are~~the ~~they~~number ~~indicative~~ of outstanding shares of our ~~future~~common ~~results~~stock.

~~The~~Our ~~unaudited~~net ~~pro~~tangible ~~forma~~book ~~consolidated~~value ~~statements have~~as ~~been prepared to reflect the following adjustments to our historical results~~ of ~~operations~~December 31, ~~and~~2014 ~~financial position and to~~was ~~give~~$ , ~~effect~~or to$ per ~~the~~share ~~following~~of ~~transactions~~our ascommon ~~if those transactions had been consummated on October 1~~stock, ~~2000~~based ~~with~~on ~~regard~~ shares toof ~~the~~our ~~statement~~common ofstock ~~income~~outstanding ~~and~~ on ~~March 15~~April , ~~2002 with~~2015. ~~regard to the balance sheet:~~

•After ~~our~~giving ~~incurrence~~effect ofto ~~$98.1~~the ~~million~~full exercise of ~~debt~~the ~~with~~2014 ~~detachable~~Warrants, ~~warrants~~and tothe ~~purchase~~issuance and sale of shares of our common stock, ~~including~~in ~~$9.0~~this ~~million~~offering assuming ~~retained,~~an asinitial public offering price of ~~October~~$ per 1share, ~~2000,~~less inthe ~~connection~~underwriting ~~with~~discounts and commissions and the ~~purchase~~estimated ofoffering ~~IITRI’s~~expenses ~~assets;~~payable by us, and •without taking into account any other changes in the ~~proposed~~net ~~acquisition~~tangible ofbook ~~IITRI’s~~value ~~assets~~after December 31, ~~which~~2014, ~~will~~our bepro ~~accounted~~forma ~~for~~net ~~under~~tangible ~~the~~book ~~purchase~~value ~~method~~as of ~~accounting~~December 31, ~~including~~2014 awould ~~preliminary~~have ~~estimate~~been a deficit of $ million, ~~fair~~or $ per share. This represents an immediate increase in net tangible book value of $ per share of our common stock to the ~~identifiable~~existing shareholders and an immediate dilution in net ~~assets~~tangible ~~acquired;~~book ~~and~~value •of $ per ~~ESOP~~share ~~investment~~of our common stock, or % of the estimated offering price of $~~30.0~~ per share, ~~million~~to investors purchasing shares of our common stock in this offering. The following table illustrates such per share of our common stock dilution:


Assumed initial public offering price per share		$
Net tangible book value (deficit) per share before the change attributable to new investors		$
Increase in net tangible book value per share attributable to new investors		$
Pro forma net tangible book value (deficit) per share after this offering and full exercise of the 2014 Warrants		$

Dilution per share to new investors		$

The following table summarizes as of December 31, 2014, the total number of shares of our common stock purchased from us, the total cash consideration paid to us and the average price per share paid by purchasers of our common stock and new investors purchasing shares of our common stock in this offering:


	Shares of our Common Stock Purchased			Total Consideration (Amount) (in millions)	Total Consideration (Percentage)			Average Price Per Share
	Number (in millions)	Percent		Total Consideration (Amount) (in millions)	Total Consideration (Percentage)			Average Price Per Share
Existing holders			%	$			%	$
New investors(1)			%	$			%	$

Total			%	$		100	%	$

(1)

A $1.00 increase (decrease) in the assumed initial public offering price of $ per share, which is the midpoint of the price range set forth on the cover page of this prospectus, would increase (decrease) total consideration paid by new investors and total consideration paid by all stockholders by $ million, assuming the number of shares offered by us, as set forth on the cover page of the prospectus, remains the same.

If the underwriters were to fully exercise the underwriters’ option to purchase additional shares of our common stock, the percentage of shares of our common stock held by existing shareholders would be % ( % on a diluted basis), and the percentage of shares of our common stock held by new investors would be % ( % on a diluted basis).

As of December 31, 2014, there were 306,889 2014 Warrants outstanding to purchase 9,419,371 ~~Unaudited~~shares ~~Pro~~of ~~Forma~~our ~~Consolidated~~common ~~Balance~~stock (with an additional 307,668 shares reserved for issuance pursuant to anti-dilution protections upon exercise of the 2010 Warrants as of December 31, 2014), at an exercise price of $0.0001 per share and 310,000 2010 ~~Sheet~~Warrants outstanding to purchase 602,741 shares of our common stock (with an additional 444,035 shares reserved for issuance pursuant to anti-dilution protections upon exercise of the 2014 Warrants as of December 31, 2014), at an exercise price of $0.01 per share. The tables and calculations above assume full exercise of the 2014 Warrants. If the 2010 Warrants were also fully exercised, resulting in the purchase of shares of our common stock, the additional dilution per share to new investors would be $ , assuming such investors purchase their shares at the midpoint of the price range set forth on the cover page of this prospectus.

To the extent that we grant options or other equity awards to our employees or directors in (the future and the holders of those options or other equity awards exercised, or vest in, ~~thousands~~they or we issue other shares of our common stock, ~~except~~there ~~for~~will ~~share~~be ~~and~~further ~~par~~dilution ~~value amounts)~~ to new investors.

				As of March 15, 2002
						Pro Forma
				Historical		Adjustments			Pro Forma
Assets
Current assets
	Cash			$	663	$	9,000	(2)	$	7,863
							(1,800	) (3)
	Net accounts receivable				60,435					60,435
	Other current assets				4,115					4,115
			Total current assets		65,213					72,413
Fixed assets, net					7,228					7,228
Intangible assets					—		25,000	(1)		25,000
Goodwill, less accumulated amortization					8,735		(8,735	) (1)		69,938
							69,938	(1)
			Total assets	$	81,176				$	174,579
Liabilities and Stockholder’s Equity
Current liabilities
		Current portion of long-term debt		$	19,145	$	3,500	(1)	$	27,645
							5,000	(4)
	Trade accounts payable				8,992					8,992
	Accrued payroll and related liabilities				8,344					8,344
	Advance payments				1,474					1,474
	Billings in excess of costs and estimated earnings on uncompleted contracts				3,819					3,819
	Current portion of deferred gain on sale of building to owner				487		(487	)(1)		—
			Total current liabilities		42,261					50,274
Long-term debt, excluding current portion					1,116		93,100	(4)		77,989
							(14,427	) (3)
							(1,800	) (3)
Accrued postretirement benefit cost					1,889					1,889
Long-term deferred gain on sale of building to owner, excluding current portion					3,787		(3,787	) (1)		—
			Total liabilities		49,053					130,152
Stockholder’s equity
	Common stock, $0.01 par value, 3,000,000 shares authorized, issued and outstanding						300	(5)		300
	Capital in excess of par value of common stock						29,700	(5)		44,127
							14,427	(3)
Owner’s net investment					32,123		(32,123	) (6)		—
			Total liabilities and stockholder’s equity	$	81,176				$	174,579

See accompanying notes to unaudited pro forma consolidated financial statements.

~~Unaudited~~SELECTED ~~Pro~~CONSOLIDATED ~~Forma~~FINANCIAL ~~Consolidated~~DATA ~~Statements of Operations~~

The following tables present summary historical condensed consolidated financial data for each of our last three fiscal years ended ~~(in~~September 30, ~~thousands~~2014, ~~except~~2013 ~~per~~and ~~share~~2012 ~~amounts)~~and for the three months ended December 31, 2014 and 2013, and as of September 30, 2014 and 2013 and December 31, 2014. The summary historical condensed consolidated financial data for the fiscal years ended September 30, 2014, 2013 and 2012 and as of September 30, 2014 and 2013 have been derived from our audited financial statements which are included elsewhere in this prospectus. The summary historical condensed consolidated financial data for the three months ended December 31, 2014 and 2013 and as of December 31, 2014 has been derived from our unaudited condensed consolidated interim financial statements which are included elsewhere in this prospectus. In management’s opinion, the unaudited condensed consolidated financial statements reflect all adjustments and reclassifications that are necessary for a fair presentation of the periods presented.

		Year Ended September 30, 2001									24-Week Period Ended March 15, 2002
					Pro Forma									Pro Forma
		Historical			Adjustments			Pro Forma			Historical			Adjustments			Pro Forma
Contract revenue — research projects		$	193,152					$	193,152		$	88,554					$	88,554
Direct contract expenses — research projects			140,555						140,555			64,923						64,923
Excess of contract revenue over direct contract expenses			52,597						52,597			23,631						23,631
Operating expenses:
	Indirect contract expenses		13,145						13,145			4,794						4,794
	Research and development		435						435			205						205
	General and administrative		16,400						16,400			10,393						10,393
	Rental and occupancy expense		7,083						7,083			3,734						3,734
	Depreciation and amortization		3,488			(1,773	) (7)		10,048			1,512			(906	)(7)		4,452
						8,333	(8)								3,846	(8)
	Bad debt expense		1,223						1,223			9						9
	Operating expenses		41,774						48,334			20,647						23,587
Operating income			10,823						4,263			2,984						44
Other income (expense)			(1,072	)		(7,138	) (9)		(10,416	)		(191	)		(3,294	) (9)		(4,517	)
						(335	) (10)								(168	) (10)
						(1,871	) (11)								(864	) (11)
Income (loss)			9,751						(6,153	)		2,793						(4,473	)
Income tax expense			(302	)					(302	)		(366	)					(366	)
Net income (loss)		$	9,449					$	(6,455	)	$	2,427					$	(4,839	)
Unaudited pro forma as adjusted basic and diluted loss per common share								$	(2.15	) (12)							$	(1.61	) (12)
Shares used in computing unaudited pro forma as adjusted basic and diluted loss per common share									3,000	(12)								3,000	(12)

The results presented below are not necessarily indicative of results that may be expected for any future period. The following information should be read in conjunction with “Capitalization”, “Management’s Discussion and Analysis of Financial Condition and Results of Operations”, “Business” and our audited annual and unaudited interim financial statements and notes included elsewhere in this prospectus.

See accompanying notes to unaudited pro forma consolidated financial statements.


	Three Months Ended December 31,						Fiscal Year Ended September 30,
	2014			2013			2014			2013			2012
	(Dollars in thousands except per share data)
Consolidated Statement of Operations and Comprehensive Loss:
Contract revenue	$	227,871		$	185,380		$	804,809		$	848,972		$	817,204
Direct contract expense		181,870			145,275			629,311			669,504			632,831

Gross profit		46,001			40,105			175,498			179,468			184,373
Operating expenses		19,043			18,864			78,061			84,128			91,494
General and administrative expenses		12,947			18,993			51,159			53,139			52,441

Operating income		14,011			2,248			46,278			42,201			40,438
Other income (expense)
Interest income		14			11			55			55			78
Interest expense		(22,353	)		(18,948	)		(81,661	)		(75,700	)		(74,934	)
Other		(10	)		(28	)		(123	)		(84	)		(55	)
Change in warrant value		201			—			9,894			—			—
Gain (loss) on debt extinguishment		—			—			(11,458	)		3,913			—

Total other expense		(22,148	)		(18,965	)		(83,294	)		(71,816	)		(74,911	)
Loss before income taxes		(8,137	)		(16,717	)		(37,016	)		(29,615	)		(34,473	)
Income tax expense		(1,746	)		(1,745	)		(6,980	)		(6,977	)		(6,974	)

Net loss	$	(9,883	)	$	(18,462	)	$	(43,996	)	$	(36,592	)	$	(41,447	)

Comprehensive loss	$	(9,883	)	$	(18,462	)	$	(44,145	)	$	(36,313	)	$	(41,421	)

Loss Per Share Data:
Net loss per share of common stock
Basic	$	(0.75	)	$	(2.41	)	$	(5.53	)	$	(5.39	)	$	(6.74	)
Diluted(a)	$	(0.75	)	$	(2.41	)	$	(5.53	)	$	(5.39	)	$	(6.74	)
Weighted average shares of common stock outstanding
Basic		13,106,777			7,659,817			7,952,248			6,787,660			6,148,438
Diluted(a)		13,106,777			7,659,817			7,952,248			6,787,660			6,148,438

Notes to Unaudited Pro Forma Consolidated Financial Statements


	December 31, 2014			As of September 30,
	December 31, 2014			2014		2013
				(Dollars in thousands)
Consolidated Balance Sheet Data:
Cash and cash equivalents	$	12,984		$	10,732	$	25,613
Working capital		(2,554	)		1,412		42,569
Total assets		607,674			604,269		624,626
Total debt(b)		575,875			569,028		556,118

(ina) ~~thousands~~Does ~~except~~not reflect the impact of the exercise of any warrants for ~~share~~any ~~amounts)~~ period.

(1b) ~~Reflects~~Total ~~adjustments~~debt toas ~~goodwill~~of December 31, 2014 and ~~other~~September ~~identifiable~~30, ~~intangible~~2014 ~~assets~~consisted ~~representing~~of obligations under the ~~excess~~Existing Debt Instruments as well as that portion of ~~the~~our ~~cost~~Unsecured ~~over~~Notes that remained outstanding after the ~~preliminary~~2014 ~~estimate~~Refinancing, which were repaid in January 2015. Total debt as of ~~the~~September ~~fair~~30, ~~value~~2013 consisted of ~~the~~obligations ~~identifiable~~under our prior revolving credit facility, our Secured Notes and our Unsecured Notes, as well as accrued PIK Interest, and is net ~~assets~~of ~~acquired~~unamortized debt issue costs and original issue discount.

Calculation of acquisition goodwill:
	Senior term note			$	26,000
	Mezzanine note				21,200
	Subordinated note				41,900
	ESOP investment				30,000
		Total purchase price			119,100
		Preliminary estimate of fair value of identifiable net assets acquired:
			Book value of IITRI		32,123
			Elimination of historical IITRI goodwill		(8,735	)
			Elimination of deferred gain		4,274
			Estimated transaction costs		(3,500	)
			Preliminary estimate of fair value of identifiable intangible assets		25,000
			Preliminary estimate of fair value of identifiable net assets acquired		49,162
			Acquisition goodwill	$	69,938

	(2)	Reflects cash proceeds retained by Newtek from debt issuances to fund working capital requirements. See also note 4.
	(3)	Reflects estimated debt issuance costs to secure the senior term note ($1.8 million) and the estimated fair value of detachable warrants issued in connection with the mezzanine note and subordinated note ($14.4 million).
	(4)	Reflects the issuance of a senior term note for $35.0 million, $26.0 million of which is to be paid to IITRI, a mezzanine note for $21.2 million and a subordinated note for $41.9 million. The senior term note has a term of five years. The mezzanine note is due in a lump sum payment at the end of 2008. The subordinated note has an eight year term.
	(5)	Represents the estimated capitalization of Newtek including the par value of three million shares of common stock and capital in excess of par value of the common stock.
	(6)	Represents the elimination of the owner’s investment balance for purchase consideration of $119.1 million, including cash proceeds of $56.0 million and notes issued to IITRI for $63.1 million.
	(7)	Reversal of IITRI’s historical amortization expense related to pre-acquisition goodwill.
	(8)	Under the provisions of SFAS No. 142, Goodwill and Other Intangible Assets, the purchase price was allocated between net tangible assets, the value attributed to identifiable intangible assets (primarily purchased contracts) and goodwill. For purposes of the pro forma consolidated statements of operations, the excess purchase price over the identifiable net assets acquired is considered to be goodwill with an indefinite life and therefore is not amortizable. The estimated value of $25.0 million attributed to intangible assets has an estimated useful life of three years and has been amortized accordingly using the straight-line method in the pro forma statements of operations. The allocation of the purchase price is preliminary and subject to change upon the completion of a valuation.
	(9)	Represents interest expense on $89.1 million of debt, utilizing a weighted average interest factor of approximately 8.0% per year, issued to finance the purchase of IITRI.

(10) Represents amortization of debt issuance costs under the effective interest method over the life of the senior term note of five years.

(11)	Represents accretion of long-term debt to face value over the term of the debt using the effective interest method. Discount to debt reflects estimated fair value of detachable warrants of $14.4 million.
(12)	Our historical capital structure is not indicative of our prospective capital structure and, accordingly, historical earnings per share information has not been presented. Unaudited pro forma as adjusted basic and diluted loss per share of common stock has been calculated in accordance with the SEC’s rules for initial public offerings. These rules require that the weighted average share calculation give retroactive effect to any changes in our capital structure. Accordingly, pro forma weighted average shares are comprised of three million shares to be offered by Newtek.
(13)	Pro forma statements exclude $1.4 million nonrecurring expense impact of acquisition on retention agreements with certain management members as such impact is directly attributable to the transaction.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

The following discussion and analysis is intended to assist the reader’s understanding of Alion’s financial condition, results of operations, liquidity and capital resources. You should read the following discussion in conjunction with the “Capitalization”, “Selected Consolidated Financial Data”, “Business” and our consolidated financial statements and related notes included elsewhere in this prospectus. This discussion contains forward-looking statements about our business and operations that involve risks and uncertainties. Future results may differ materially from those we currently anticipate because of the “Risk Factors” described elsewhere in this prospectus.

Overview

We are a leading provider of engineering solutions and services to the Federal Government for national defense, security and other critical government areas. Founded in 1936 as IITRI, Alion and its highly skilled and educated employees have consistently been at the forefront of originating, developing and applying innovative scientific, engineering, technology and research and development solutions to our customers’ most complex challenges. Based in McLean, Virginia, we operate in three core business areas:

•

Systems Analysis, Design and Engineering core business area, in which we provide services and technologies designed to enhance the performance and safety of complex systems and reduce costs.

•

A significant focus of our solutions and systems is our agile engineering work, almost all of which is currently conducted in our systems analysis, design and engineering core business area. Agile engineering is the design, rapid prototyping, testing and limited production of systems and components. This is a substantial and growing part of our business. Within our agile engineering service we provide a broad range of solutions that respond directly to product line managers’ needs, usually on a time-critical basis. Our ability to progressively design, prototype, test and field solutions to emergent problems in close collaboration with (and often embedded in) customer teams results in effective, affordable and timely solutions. We believe our ability to combine traditional services with technological and engineering expertise in a time-critical, cost-efficient manner sets us apart in our industry.

Our solutions and services span the full lifecycle of key programs and provide us with long-standing, entrenched relationships with our customers. The long-term nature of our service offering also allows us to expand our footprint on existing programs and to use our capabilities and relationships to capture new growth opportunities. For fiscal year 2014, we generated revenue of $804.8 million, $68.0 million in Consolidated EBITDA and reported a net loss of $44.0 million. For the three months ended December 31, 2014 and 2013, we generated revenue of $227.9 million and $185.4 million, respectively, $19.2 million and $14.9 million in Consolidated EBITDA, respectively, and reported a net loss of $9.9 million and $18.5 million, respectively. This represents an increase in revenue and Consolidated EBITDA of 22.9% and 28.9%, respectively, and a decrease in net loss of 46.5%. For a discussion of our use of Consolidated EBITDA and a reconciliation to net loss, please refer to “Prospectus Summary – Summary Historical Consolidated Financial Data”.

~~Management’s~~serve ~~Discussion~~customers in all branches of the U.S. military, a number of Cabinet-level U.S. government agencies, state and ~~Analysis~~foreign governments and commercial customers. As of ~~Financial~~ ~~Condition~~December 31, 2014, we had more than 200 distinct customers and over 500 active contracts. For calendar year 2014, DoD customers represented 93.8% of our revenue and other civilian agencies and commercial customers accounted for 6.2% of our revenue.

~~and~~Transaction ~~Operating~~Expenses ~~Results~~

~~You~~Assuming ~~should~~consummation ~~read~~of the ~~following~~Transactions, ~~discussion~~the ~~together with~~elimination ~~our~~of ~~consolidated~~all ~~financial~~of ~~statements~~our ~~and~~outstanding ~~the~~Series ~~related~~A ~~notes included~~Preferred ~~elsewhere~~Stock inand ~~this~~the ~~prospectus.~~full ~~This~~exercise ~~discussion~~of ~~contains~~the 2014 ~~forward-looking~~Warrants, ~~statements~~we ~~about~~anticipate ~~our~~that ~~business~~we ~~and~~will ~~operations. Our~~recognize ~~actual~~approximately ~~results~~$ million ~~may~~of ~~differ~~charges, ~~materially~~including ~~from~~transaction ~~those~~expenses weand ~~currently anticipate~~redemption asand aprepayment ~~result~~premiums ofand the ~~factors~~write-off weof $ million ~~describe~~of ~~under “Risk~~unamortized ~~Factors”~~debt onissue ~~page 9~~costs and ~~elsewhere~~original inissue ~~this prospectus~~discount.

Seasonality ~~Overview~~

WeAlthough ~~provide~~our ~~scientific~~business ~~and~~is ~~engineering~~not ~~expertise to~~seasonal, ~~research~~it ~~and~~does ~~develop~~fluctuate ~~technological~~with ~~solutions~~the tonumber ~~problems relating~~of toworking ~~national~~days ~~defense,~~in ~~public~~each ~~health~~quarter. ~~and~~The ~~safety.~~first Weand fourth ~~provide~~quarters ~~these~~each ~~research~~calendar ~~services~~year ~~primarily~~generally have fewer working days for our employees to ~~agencies~~generate ofrevenue. In the ~~federal~~ ~~government~~weeks ~~and~~before tothe aFederal ~~lesser~~Government’s ~~extent~~September 30 fiscal year end, it is not uncommon for U.S. government agencies to ~~commercial~~award ~~and~~extra ~~international~~tasks ~~sponsors.~~or ~~Our~~complete ~~revenues~~contract ~~increased~~actions ~~24%~~to avoid the loss of unexpended fiscal year funds. In addition, ~~33%~~we also have generally experienced higher bid and ~~24% for~~proposal costs in the ~~years~~months ~~ended~~leading ~~September 30,~~up ~~1999,~~to ~~2000~~the ~~and~~U.S. ~~2001,~~government’s fiscal year end as we pursue ~~respectively,~~new ~~through~~contract aopportunities ~~combination~~being ofawarded ~~internal~~shortly ~~growth~~after ~~and acquisitions~~the U.S. ~~For~~government ~~the~~fiscal ~~24-week~~year ~~period~~end ~~ended~~as ~~March 15,~~new ~~2002, our~~opportunities ~~revenues~~are ~~increased~~expected 4%to ~~over~~have funding appropriated in the ~~comparable~~U.S. ~~period~~government’s ~~ended~~subsequent fiscal year. We may continue to experience this ~~March 16~~seasonality in future periods, ~~2001~~and our future periods may be affected by it.

AResults ~~summary~~ of ~~Newtek’s~~Operations ~~performance is as follows:~~

								24-Week		24-Week
		For the Year Ended September 30,						Period Ended		Period Ended
								March 16,		March 15,
		1999		2000		2001		2001		2002
		(in millions)
Revenue		$	117.5	$	156.1	$	193.2	$	85.2	$	88.6
Net Income			3.6		4.2		9.4		4.0		2.4
Contract Backlog
	Funded				158.0		166.0				151.0
	Unfunded				779.0		638.0				694.0
	Total				937.0		804.0				845.0
Proposal Backlog
	Submitted				310.0		514.0				253.0
	In-Process				34.0		100.0				249.0
	Total			$	344.0	$	614.0			$	502.0

Quarter Ended December 31, 2014 Compared to Quarter Ended December 31, 2013

~~Our~~Despite objective is to continue to grow by capitalizing on our highly educated work force and our established position in our core research fields, and by synergistic acquisitions. We have completed four acquisitions since 1998. In September 1998, we acquired Human Factors Applications, Inc., a ~~supplier~~challenging ~~of ordnance and explosive waste remediation services~~U. ~~HFA has core competencies in demilitarization, de-mining, environmental remediation, explosion sciences, ordnance management, and training~~S. InFederal ~~May 1999,~~Government wedefense ~~acquired EMC Science Center~~market, ~~Inc.~~the ~~EMC~~Company ~~Science~~won ~~Center has~~new ~~technical~~contracts ~~expertise in electromagnetic environmental effects research~~ and ~~training,~~executed ~~and~~on anits ~~analytical~~existing ~~laboratory.~~base ~~In February 2000, we completed our acquisition~~ of ~~AB Technologies, Inc~~business. AB ~~Technologies~~First ~~specializes~~quarter infiscal ~~defense~~year ~~operations~~2015 ~~research, training-related~~revenue ~~modeling~~increased ~~and simulation, education and training support, complex problem analysis, and military policy development for the federal government~~22.9% Inover ~~May~~first ~~2002,~~quarter wefiscal ~~acquired Daedalic,~~year ~~Inc.,~~2014 ~~which~~revenue ~~develops modeling~~ and ~~simulation~~first ~~software for~~quarter ~~large-scale~~fiscal ~~vehicle~~year ~~and~~2015 ~~air~~operating ~~mobility~~income ~~operations,~~increased ~~and provides software consulting services~~523.3% ~~Except~~compared ~~for HFA, which is a separate subsidiary, we have integrated these acquired entities and we will integrate Daedalic into our research base and capabilities, enabling us~~ to ~~expand~~first ~~our~~quarter ~~research~~fiscal ~~offerings for~~year ~~our~~2014 ~~government~~operating ~~and commercial sponsors~~income. ~~Management believes that~~

Notwithstanding over-arching defense sector market issues, first quarter fiscal year 2015 revenue marked the Company’s fourth consecutive quarter of increasing revenues. The Company’s revenue growth was driven by a number of factors which included winning new awards in our existing and new markets and increased funding on our existing contracts. The Company ended first quarter fiscal year 2015 with approximately $500 million in funded backlog which was one of the highest fiscal quarter-end levels of funded backlog in the Company’s history.

First quarter fiscal year 2015 operating income increased by 523% compared to first quarter fiscal year 2014. The Company incurred significant transaction expenses in first quarter fiscal year 2014 in connection with the 2014 Refinancing and there were no comparable costs in first quarter fiscal year 2015. Management’s focus on improved contract performance and execution also improved profitability. Company initiatives reduced first quarter fiscal year 2015 overhead and general and administrative expenses by $6.7 million compared to first quarter fiscal year 2014.

In first quarter fiscal year 2015, the Company’s net loss decreased by 46.5% compared to first quarter fiscal year 2014. Higher operating income, from lower overhead and general and administrative expenses outpaced increased interest expense from our debt structure resulting from the 2014 Refinancing.

~~synergistic~~Revenue ~~acquisitions like these provide several potential benefits to our organization and the public in that they:~~

•First ~~help~~quarter usfiscal ~~expand~~year ~~our~~2015 ~~research~~revenue ~~base~~was $227.9 million, up $42.5 million (22.9%) as compared to ~~include~~first ~~increasingly~~quarter ~~large~~fiscal ~~and~~year ~~complex~~2014. ~~programs;~~This increase •was driven primarily by a $40.9 million overall increase ~~our~~in ~~opportunities~~DoD revenue compared to ~~exploit~~first ~~the~~quarter ~~synergies~~fiscal ~~between~~year ~~different~~2014. ~~research~~The ~~fields~~growth was primarily a result of higher funding and new awards in our Systems Analysis, Design and Engineering core business area which weprovided ~~work~~a to$40.9 ~~broaden~~million ~~our~~(71.5%) increase ~~offerings~~in revenue compared to ~~our~~first ~~existing~~quarter ~~sponsors;~~fiscal •year ~~bring~~2014. ~~new~~In ~~strengths~~addition, the Naval Architecture and Marine Engineering core business area increased $2.7 million (3.4%) due to ~~our~~higher funding ~~technical~~levels ~~capabilities~~on ~~through~~existing ~~cross-utilization~~contracts ofand ~~research~~increased ~~technology~~activities with international customers to provide naval architecture and engineering ~~skills;~~services. ~~and~~This •growth ~~increase~~was ~~the~~offset ~~overall~~in ~~depth~~part by declines in our Modeling, Simulation, Training and ~~experience~~Analysis core business area of $1.1 million (2.2%) due to contract completions in our ~~management~~training market.

WeSources ~~contract~~of ~~primarily with the federal government.~~ Revenue derived from government contracts as a percentage of total revenue was 91% in fiscal year 1999, 88% in fiscal year 2000 and 94% in fiscal year 2001. We expect most of our revenues to continue to come from government contracts and we expect that most of these contracts will be with the U.S. Department of Defense. The balance of our revenue comes from a variety of commercial sponsors, state and local governments, and foreign governments.

~~Our~~We ~~largest~~provide ~~contract~~professional isengineering, toprogram ~~provide~~management ~~spectrum engineering~~and information technology services toand ~~the~~scientific ~~U.S.~~expertise ~~Department~~in a range of ~~Defense’s~~specialized ~~Joint~~core ~~Spectrum~~business ~~Center.~~areas ~~The~~aligned ~~Joint~~with ~~Spectrum~~our ~~Center~~customers’ ~~contract generated~~demands. ~~revenue~~The ~~of $40~~U.~~7 million, $39~~S.~~3 million,~~ ~~and $41.1 million~~government ~~for~~continues ~~the~~to ~~fiscal~~be ~~years~~our ~~ended~~principal ~~September 30, 1999,~~customer. ~~2000,~~As ~~and~~in ~~2001,~~the ~~respectively~~past, ~~and~~we ~~accounted~~expect ~~for approximately~~to ~~35%,~~derive ~~25%,~~the ~~and~~overwhelming ~~21%~~majority of our ~~total~~revenue ~~annual~~from ~~revenues~~DoD ~~in these~~and ~~years~~other federal agency contracts. Although ~~The~~we ~~following~~are ~~table~~investing ~~reflects~~to ~~the~~expand ~~distribution~~our ~~of revenues~~international byand ~~core~~commercial business, ~~area~~we believe commercial and byinternational ~~major~~revenue ~~sponsor~~will ~~for~~continue ~~the fiscal~~to ~~years~~be ~~ended~~a ~~September 30,~~low ~~1999,~~percentage ~~2000~~of ~~and~~our ~~2001~~total revenue. ~~The dollar~~We ~~values~~expect ~~shown~~changes doin ~~not~~our ~~reflect~~internal ~~total~~resource ~~annual~~allocations ~~revenue either~~and byplanned ~~sponsor~~cost orreductions bywill ~~core~~improve ~~business~~our ~~area~~ability to provide cost-effective customer solutions.

The table below summarizes our revenue by customer for the first quarter of both fiscal years 2015 and fiscal year 2014.


	Three Months Ended December 31,
	2014				2013
	(Dollars in millions)
U.S. Air Force	$	33.5	14.7	%	$	28.8	15.5	%
U.S. Army		38.3	16.8	%		25.0	13.5	%
U.S. Navy		122.7	53.8	%		104.3	56.3	%
Other DoD customers		20.4	9.0	%		15.9	8.6	%

Sub-total DoD customers		214.9	94.3	%		174.0	93.9	%
Other Federal Agencies		6.8	3.0	%		6.8	3.6	%

Sub-total U.S. Government customers		221.7	97.3	%		180.8	97.5	%
Commercial and International customers		6.2	2.7	%		4.6	2.5	%

Total Revenue	$	227.9	100.0	%	$	185.4	100.0	%

We provide professional engineering, program management and information technology services and scientific expertise in a range of specialized core business areas. Our core business areas closely align with the demands of the marketplace. We expect our internal resource allocations and cost reductions will improve our efficiency and enhance our ability to provide cost-effective customer solutions. Factors impacting our Naval Architecture and Marine Engineering, Modeling, Simulation, Training and Analysis and Systems Analysis, Design and Engineering core business area revenue are noted in the Revenue section above.

~~Annual~~The ~~Revenues~~table bybelow ~~Sponsor/~~summarizes ~~Government~~our first quarter fiscal year 2015 and fiscal year 2014 revenue by ~~Agency~~ core business area.

							Percentage					Percentage				Percentage
Core Business Area Revenue	Three Months Ended December 31,
				FY99			of FY99		FY00			of FY00		FY01		of FY01
	2014						2013
Core Research	Sponsor/Government			Annual			Annual		Annual			Annual		Annual		Annual
	(Dollars in millions)
Area	Agency		Title	Revenue			Revenue		Revenue			Revenue		Revenue		Revenue
Naval Architecture and Marine Engineering	$	81.2			35.6	%	$	78.5		42.3	%
				(in thousands)
Systems Analysis, Design and Engineering		98.1			43.0	%		57.2		30.9	%
Wireless Communications	Dept of Defense Joint Spectrum Center		Joint Spectrum Center Engineering Support Services	$	40,682			35%	$	39,251			25%	$	41,123		21%
Modeling, Simulation, Training and Analysis		48.6			21.4	%		49.7		26.8	%
Defense Operations	Dept of Defense — Defense Information Systems Agency		Modeling and Simulation Information Analysis Center		5,692			5		13,656			9		30,917		16
Total Revenue	$	227.9			100.0	%	$	185.4		100.0	%
Defense Operations	Dept of Defense — Defense Information Systems Agency		Weapons System Technology Information Analysis Center		7,297			6		5,076			3		11,942		6
Explosive Science	Dept of Defense — Navy (subcontractor to Raytheon Technical Services Corporation)		Guam Ordnance Services		—			—		1,962			1		8,653		4
Industrial Technology	Dept of Defense — Defense Information Systems Agency		Reliability Analysis Center		4,436			4		5,149			3		6,213		3
Industrial Technology	Dept of Defense — Defense Information Systems Agency		Manufacturing Technology Information Analysis Center		949			1		1,469			1		5,177		3
Wireless Communications	Dept of Defense — Navy		Extremely Low Frequency Communication Systems		4,123			4		4,146			3		4,020		2
Information Technology	Internal Revenue Service		Treasury Information Processing Support Services and Modernization		10,872			9		3,259			2		5,862		3
Defense Operations	General Services Admin — Army		MIMIC		—			—		946			1		2,784		1
Information Technology	General Services Admin — Internal Revenue Service		Call Center Support		—			—		791			1		2,425		1
	Subtotal				74,051			63		75,705			48		119,116		62
	Other Sponsors/ Agencies				43,449			37		80,432			52		74,036		38
	Total Revenues			$	117,500			100%	$	156,137			100%	$	193,152		100%

AsCost-reimbursement acontract ~~for-profit~~revenue ~~entity,~~increased we$48.0 ~~intend~~million to(30.8%) in ~~expand~~first ~~our~~quarter fiscal year 2015 ~~research~~versus ~~offerings~~first quarter fiscal year 2014. The growth in ~~commercial~~cost-reimbursement ~~and~~contract ~~international~~revenue ~~markets; however~~was driven, ~~the~~in ~~expansion~~part, ~~will~~by becustomers ~~incremental.~~utilizing ~~Revenues~~the ~~from commercial~~IDIQ ~~and~~type ~~international~~contract ~~research~~vehicle ~~together~~to ~~amounted~~access ~~to approximately~~our ~~9%,~~services ~~12%~~in the Systems Analysis, Design and 6%Engineering ofcore ~~total~~business area. ~~revenues~~First ~~for~~quarter fiscal ~~years 1999,~~year ~~2000~~2015, ~~and~~fixed ~~2001,~~price ~~respectively,~~contract ~~and~~revenue 2was down $5.4 million to 4.5% of ~~total~~quarterly ~~revenues~~revenue ~~for~~ as compared to the ~~24-week~~first ~~period~~quarter ~~ended~~fiscal ~~March 15~~year 2014 due, ~~2002.~~in Wepart, ~~derive~~to ~~our international~~contract ~~revenue~~completion ~~from~~in ~~spectrum~~our ~~management~~training ~~research~~market. ~~and~~First quarter fiscal ~~software~~year ~~tools~~2015 time and ~~our~~material ~~locomotive~~contract ~~simulation~~revenue ~~and~~decreased ~~training services~~to 6.3% of annual revenue as compared to ~~foreign~~first ~~governmental~~quarter ~~sponsors~~fiscal year 2014.

~~Our~~The ~~revenues and our operating margins are~~table ~~affected~~below ~~by,~~summarizes ~~among other things,~~ our ~~mix~~first ofquarter ~~contract~~fiscal ~~types (cost-plus,~~year ~~fixed-price,~~2015 and ~~time-and-materials),~~fiscal asyear ~~well~~2014 asrevenue ~~the proportion of our revenues that come from higher margin commercial and international work. Significant portions of our revenues are generated~~ by ~~work~~contract ~~performed~~billing ~~on cost-plus contracts under which we are reimbursed for approved costs, plus a fee, which reflects our profit on the work performed~~type. We recognize revenue on cost-plus contracts based on actual costs incurred plus a proportionate share of the fees earned. We also have a number of fixed-price government contracts. We use the percentage of completion method to recognize revenue on fixed-price contracts based on costs incurred in relation to total estimated costs. These contracts involve higher financial risks, and higher margins, because we must deliver the contracted services for a predetermined price regardless of our actual costs incurred in the project. Our failure to anticipate technical problems, estimate costs accurately or control costs during performance of a fixed-price contract may reduce the


Revenue by Contract Billing Type	Three Months Ended December 31,
Revenue by Contract Billing Type	2014				2013
	(Dollars in millions)
Cost reimbursable contracts	$	203.4	89.2	%	$	155.4	83.9	%
Fixed price contracts		10.1	4.5	%		15.5	8.4	%
Time and material contracts		14.4	6.3	%		14.5	7.7	%

Total Revenue	$	227.9	100.0	%	$	185.4	100.0	%

In first quarter fiscal year 2015, our prime contract revenue increased by $42.2 million, a 26.1% increase compared to first quarter fiscal year 2014. To a large degree, this increase was attributed to new awards and funding on existing programs, in our Systems Analysis, Design and Engineering core business area. Revenue from our work as a subcontractor to other prime contractors was up $0.3 million or 1.3% in first quarter fiscal year 2015 compared to the first quarter fiscal year 2014. Alion continues to look to increase its presence as a prime contractor on larger, more complex programs where we deliver services to customers by deploying our own staff and by managing the efforts of other contractors.


Prime and Subcontract Revenue	Three Months Ended December 31,
Prime and Subcontract Revenue	2014				2013
	(Dollars in millions)
Prime contracts	$	203.6	89.3	%	$	161.4	87.1	%
Subcontracts from other companies		24.3	10.7	%		24.0	12.9	%

Total Revenue	$	227.9	100.0	%	$	185.4	100.0	%

The trend by our customers to access our services through IDIQ contract vehicles continued in ~~overall~~first ~~fee~~quarter onfiscal ~~the~~year 2015 as IDIQ contract orrevenue ~~cause~~increased aby ~~loss~~36. ~~Under~~7% ~~time-and-material~~compared ~~contracts,~~to ~~labor~~first ~~and~~quarter ~~related~~fiscal ~~costs~~year ~~are reimbursed~~2014. atThis ~~negotiated~~increase was attributed, ~~fixed~~in ~~hourly~~part, ~~rates.~~to ~~Revenue~~new ~~on time-~~task orders awards and~~-materials~~ ~~contracts~~funding ison ~~recognized~~existing attask ~~contractually~~orders. Our customers used our ~~billable~~Weapons ~~rates~~System asInformation ~~labor~~Analysis ~~hours~~Center ~~and~~IDIQ ~~direct~~contract ~~expenses~~to ~~are~~obtain ~~incurred. The~~Alion’s ~~following~~services ~~table~~in ~~summarizes~~the Systems Analysis, Design and Engineering core business area and the ~~percentage~~Seaport-E ofIDIQ ~~revenues attributable~~contract to ~~each~~access ~~contract~~our ~~type~~services ~~for~~in the ~~periods~~Naval ~~indicated.~~Architecture and Marine Engineering core business area.

	For the Year Ended September 30,												24-Week
Contract Vehicles	Three Months Ended December 31,
													Period Ended
	2014				2013
													March 15,
	(Dollars in millions)
Contract Type	1999				2000				2001				2002
IDIQ Contracts	$	160.3	70.3	%	$	117.3	63.3	%
	(in millions)
Individual contracts and delivery orders		67.6	29.7	%		68.1	36.7	%
Cost-plus	$	88.7	76	%	$	99.7	64	%	$	113.9	59	%	$	52.9	60	%
Total Revenue	$	227.9	100.0	%	$	185.4	100.0	%
Fixed-price		15.5	13			29.8	19			44.5	23			15.8	18
Time-and-materials		13.3	11			26.6	17			34.8	18			19.9	22
Total	$	117.5	100	%	$	156.1	100	%	$	193.2	100	%	$	88.6	100	%

~~The~~Selected ~~relative~~Financial ~~shift~~Information in contract mix from cost-plus contracts to more fixed-price and time-and-materials contracts reflects the effect of the consolidation into our organization of the three companies we have acquired and the composition of their contracts. To a lesser extent, it also reflects the current trend by governmental procuring agencies to use General Services Administration schedules which usually involve an increased number of time-and-material efforts.

The table below summarizes our first quarter fiscal year 2015 and 2014 revenues and income from operations. First quarter fiscal year 2015 ~~Results~~revenue ofincreased ~~Operations~~by $42.5 million (22.9%) period over period and our gross profit increased $5.9 million. Total first quarter fiscal year 2015 operating expenses decreased $5.9 million as compared to first quarter fiscal year 2014 as general and administrative costs decreased by $6.0 million and depreciation and amortization expenses decreased $255 thousand. Occupancy costs rose $1.0 million as we expanded our presence in several locations in conjunction with our growing revenue base. First quarter fiscal year 2015 operating income was $11.8 million more than it was in first quarter fiscal year 2014, as revenues increased and operating expenses decreased.

Our results of operations, particularly our revenue and income from operations, may vary significantly from period to period, depending largely on the budget cycle of the federal government, terms of our contracts and our mix of contracts under which we perform. As a result, 24-week period-to-period comparisons may show substantial changes which may be disproportionate to the underlying status of our operations.


	Three Months Ended December 31,
	2014				2013
	(Dollars in millions and percentage of revenue)
Total contract revenue	$	227.9			$	185.4
Total direct contract expense		181.9	79.8	%		145.3	78.4	%
Direct labor costs		59.4	26.1	%		59.0	31.8	%
Materials and subcontracts		116.8	51.2	%		80.9	43.6	%
Other direct costs		5.7	2.5	%		5.4	2.9	%

Gross profit		46.0	20.2	%		40.1	21.6	%
Total operating expense		32.0	14.0	%		37.9	20.4	%
Major components of operating expense:
Overhead and G&A expenses		22.1	9.7	%		28.8	15.5	%
Rental and occupancy expense		8.8	3.9	%		7.8	4.2	%
Depreciation and amortization		1.0	0.5	%		1.3	0.7	%

Operating income	$	14.0	6.1	%	$	2.2	1.2	%

~~24-Week~~Direct ~~Period~~Contract ~~Ended~~Expense ~~March 16,~~and ~~2001 Compared~~Gross toProfit ~~24-Week Period Ended March 15, 2002~~

First quarter fiscal year 2015 direct contract costs were up $36.6 million (25.2%) compared to the first quarter fiscal year 2014, which ~~Contract~~is ~~Revenue~~in line with higher revenue. As compared to first quarter fiscal year 2014, first quarter fiscal year 2015 direct labor costs increased $0.4 million (0.7%) and third-party costs for materials and subcontracts increased by $35.9 million (44.3%). Direct labor and material and subcontract costs increased due to new funding and awards in fourth quarter fiscal year 2014 and first quarter fiscal year 2015. First quarter fiscal year 2015 other direct costs increased by $0.3 million (5.8%) over first quarter fiscal year 2014 as the Company required more non-labor goods and travel related costs to service our customers.

Our contract revenue increased $3.4 million, or 4%, from $85.2 million for the 24-week period ended March 16, 2001, to $88.6 million for the 24-week period ended March 15, 2002. This revenue growth consisted largely of a $2.5 million increase in support to the U.S. Department of Defense’s Defense Logistics Agency and a $1.0 million increase in support to the IRS. Our contract revenue for the 24-week period ended March 15, 2002 was impacted by the delay in the authorization and signing of the federal budget. As a result, the anticipated award of new contracts and the funding of new tasks under existing contracts were suspended until the budget approval process was completed which occurred in mid-January 2002. We anticipate being able to increase our level of revenue performance over the remainder of the fiscal year ending September 30, 2002. We are, however, uncertain as to whether we will be able to fully recover from the delays in new contract awards.

Direct Contract Expenses

Our direct contract expenses increased by $3.4 million, or 5.5%, from $61.5 million for the 24-week period ended March 16, 2001, to $64.9 million for the 24-week period ended March 15, 2002. As a percentage of revenue, direct contract expenses remained relatively constant at 72% during the 24-week period ended March 16, 2001 compared to 73% during the 24-week period ended March 15, 2002.

Operating Expenses

Our operating expenses increased by $1.9 million, or 10%, from $18.7 million for the 24-week period ended March 16, 2001, to $20.6 million for the 24-week period ended March 15, 2002. This increase was primarily attributable to approximately $1.1 million in legal and financial fees associated with this offering and the acquisition of IITRI assets, a $0.4 million increase in bid and proposal costs related to overall

~~growth~~Gross ~~and~~profit ~~increased~~was ~~bid~~up ~~opportunities~~by ~~and a~~ $05.4 9 million ~~increase~~first inquarter ~~general~~fiscal ~~and~~year ~~administrative~~2015 as compared to the first ~~expenses~~quarter ~~related~~fiscal year 2014 due to ~~(1) increased~~the ~~investment~~increase in ~~internal information~~revenue. ~~technology,~~Our ~~and~~first (quarter fiscal year 2015 gross profit margins declined to 20.2~~) hiring~~% of ~~human~~revenue ~~resource personnel~~as ~~and~~compared ~~the~~to ~~incurrence~~21.6% of ~~expenses~~revenue ~~related~~in first quarter fiscal year 2014. The decrease in gross margins was due, in part, to the ~~implementation~~ ofsignificant agrowth ~~new~~in ~~employee~~material ~~benefits~~and ~~payroll~~subcontract ~~system~~activity which on certain contracts earns lower margins than the rest of the portfolio.

~~Other~~Operating ~~Income~~and General and ~~Expense~~ Administrative Expenses

~~Other~~First quarter fiscal year 2015 operating expenses decreased $05.9 million (15.5%) ~~million~~compared to first quarter fiscal year 2014. Overhead and general and administrative, or ~~71%~~ ~~from~~G&A, expenses were down $06.7 million ~~for~~in ~~the~~first ~~24-week~~quarter ~~period~~fiscal ~~ended March 16,~~year ~~2001,~~2015 compared to $0first quarter fiscal year 2014.~~2 million~~ ~~for~~The ~~the~~reductions ~~24-week~~in ~~period ended~~overhead ~~March 15,~~and ~~2002.~~general ~~This~~and ~~decrease~~administrative ~~was~~expenses ~~primarily attributable~~were due, in part, to athe elimination ~~decrease~~of refinancing expenses the Company incurred in ~~interest~~first ~~expense~~quarter ~~of $0~~fiscal year 2014.~~5 million,~~ orOccupancy ~~71%,~~costs ~~from~~increased $01.7 0 million ~~for~~period ~~the 24-week~~over period ~~ended~~as ~~March 16,~~we ~~2001~~expanded our presence in several locations in conjunction with our growing revenue base, while todepreciation and amortization charges declined by $0255 thousand.~~2 million for~~ ~~the~~We ~~24-week~~expect ~~period~~to ~~ended~~incur ~~March~~transaction 15costs in connection with the Transactions, ~~2002.~~and ~~Improvements~~the inelimination of all of our ~~accounts~~ ~~receivable~~outstanding ~~processing~~Series A Preferred Stock and ~~collections~~the ~~resulted~~full ~~in improved~~exercise ~~cash~~of ~~flow~~the 2014 Warrants, ~~which~~and ~~reduced~~to ~~overall~~have ~~borrowings~~greater inoperating ~~the~~and ~~2002 period~~general and administrative expenses as a result of becoming a public company.

Operating Income ~~Tax (Expense) Benefit~~

First ~~Our~~quarter ~~wholly~~fiscal ~~owned,~~year ~~for-profit~~2015 ~~subsidiary, HFA, had~~ operating income ofwas ~~approximately~~ $14.0 million, as compared to $2.7 2 million ~~for~~in ~~the 24-week~~first ~~period~~quarter ~~ended~~fiscal ~~March 16~~year 2014. The increase was due to higher revenue, ~~2001~~and, ~~compared~~in topart, improved contract execution and performance, which generated higher $0contract profitability.~~8 million~~ ~~for~~Operating ~~the~~income ~~24-week~~was also higher period ~~ended~~over ~~March 16, 2002~~period because of reduced overhead and core general and administrative costs. AsIn afiscal ~~result~~year 2014, ~~HFA~~we ~~recorded~~faced anrefinancing ~~income~~related ~~tax~~expenses ~~provision~~that ofwe did not have in first quarter ~~approximately~~fiscal $0year 2015.~~3 million~~ ~~and~~First ~~$0.4~~quarter ~~for~~fiscal ~~the~~year ~~24-week~~2015 ~~periods ended~~operating ~~March 16,~~income ~~2001~~margin ~~and~~was ~~March 15,~~6.1% ~~2002,~~up ~~respectively~~from 1. 2% in first quarter fiscal year 2014.

~~Year~~Interest ~~Ended~~and ~~September 30,~~Other ~~2000~~Expense ~~Compared to Year Ended September 30, 2001~~

First quarter fiscal year 2015 aggregate interest income and interest expense and other expense was approximately $3.4 million higher than it ~~Contract~~was ~~Revenue~~in first quarter fiscal year 2014. Cash settled interest expense declined by $3.3 million period over period because we had to pay cash interest on the Existing Debt Instruments. The Existing Third Lien Note cash interest rate is currently 5.5%. Last year we had to pay cash interest on a higher total outstanding principal for the now-extinguished Secured Notes and Unsecured Notes and at a higher cash paid interest rate. Interest expense on our Revolving Credit Facility increased because we carried a $43 million balance in the first quarter fiscal year 2015. In contrast, during first quarter fiscal year 2014, we only borrowed $10 million for a brief period. As a result of the Transactions, we expect our interest expense to decrease.

Our contract revenue increased by $37.1 million, or 24%, from $156.1 million for the year ended September 30, 2000, to $193.2 million for the year ended September 30, 2001. This growth in contract revenue resulted from an increase in demand for our services across many of our research operations. Notably, our work in support of the Defense Information Systems Agency was responsible for an aggregate $54.2 million in revenues in fiscal year 2001. Under these contracts, our revenues increased $28.8 million, or 113%, from $25.4 million in fiscal year 2000 to $54.2 million in fiscal year 2001. Additionally, HFA’s naval ordnance support services provided to the U.S. Department of Defense under subcontract to Raytheon Technical Services Corporation increased $6.7 million, or 335%, from $2.0 million in fiscal year 2000 to $8.7 million in fiscal year 2001.

Direct Contract Expenses

Our direct contract expenses increased $29.5 million, or 27%, from $111.1 million for the year ended September 30, 2000, to $140.6 million for the year ended September 30, 2001, commensurate with our increase in contract revenue. As a percentage of revenue, direct contract expenses increased from 71% for the year ended September 30, 2000, to 73% for the year ended September 30, 2001. This percentage increase is due in part to an increase in the proportion of material and subcontract direct costs to total direct costs.

Operating Expenses

Our operating expenses increased $2.1 million, or 5%, from $39.7 million in fiscal year 2000 to $41.8 million in fiscal year 2001. As a percentage of revenue, our operating expenses decreased from 25% in fiscal year 2000 to 22% of revenue in fiscal year 2001. On a comparative basis, our revenue increased by approximately 24% from 2000 to 2001 while general and administrative expenses increased by only 8% and other operating expenses increased by 4%. Approximately $0.9 million of the increase in operating expenses in fiscal year 2001 was attributable to an increase in our bad debt expense.

Interest expense increased overall because in first quarter fiscal year 2015 we had more debt ~~Other~~outstanding ~~Income~~subject to higher PIK interest rates than paid on the Secured Notes earned in first quarter fiscal year 2014. We accrued $7.9 million in PIK interest on the Existing Second Lien Loan and ~~Expense~~Existing Third Lien Notes in first quarter fiscal year 2015 compared to $1.7 million in PIK interest in first quarter fiscal year 2014 for the Secured Notes. We also amortized a higher amount of debt issue costs in first quarter fiscal year 2015 compared to first quarter fiscal year 2014.

Other expense increased $0.4 million, or 57%, from $0.7 million for the year ended September 30, 2000 to $1.1 million for the year ended September 30, 2001. Fiscal year 2000 results reflect a gain of $1.3 million on the sale of land asset and $0.5 million loss of equity in an investment. Without these events other expense would have decreased by $0.4 million during fiscal year 2001, due to greater efficiencies in our accounts receivable processing, which resulted in less use of our credit facility and lower interest expense.


	Three Months Ended December 31,
	2014		2013
	(Dollars in millions)
Cash Pay Interest
Revolver	$	0.6	$	0.3
First lien term loan, Tranche A		2.2		—
First lien term loan, Tranche B		4.9		—
Third lien notes		3.0		—
Secured notes		—		8.3
Unsecured notes		0.6		6.0
Other cash pay interest and fees		0.04		0.02

Sub-total cash pay interest	$	11.3	$	14.6
Deferred and Non-cash Interest
Secured notes PIK interest		—		1.7
Second lien term loan PIK interest		2.6		—
Third lien notes PIK interest		5.3		—
Debt issue costs and other non-cash items		3.1		2.7

Sub-total non-cash interest	$	11.0	$	4.4

Total interest expense	$	22.4	$	18.9

Income Tax (Expense) ~~Benefit~~

~~Our~~Deferred ~~wholly-owned,~~income ~~for~~tax ~~profit~~expense ~~subsidiary~~was ~~HFA~~$1.7 ~~had operating~~million ~~income~~in each of ~~approximately~~first ~~$0.5 million~~quarter ~~for~~ fiscal year ~~2000~~2015 and $12014.~~0 million~~ ~~for~~Deferred ~~fiscal~~tax ~~year~~expense ~~2001. Accordingly,~~relates ~~HFA~~to ~~recorded an income~~ tax ~~provision of~~-deductible ~~approximately $0~~goodwill.~~2 million~~ ~~and~~The ~~$0.3 million~~Company ~~for~~also ~~the years~~had ~~ended~~modest ~~September 30,~~current ~~2000~~foreign ~~and 2001, respectively. Additionally, $0.2 million of income~~ tax expense ~~was recorded~~ for ~~the~~its ~~year~~Indian ~~ended~~subsidiary’s ~~September 30, 2000 for unrelated~~ business ~~income~~development ~~arising from the AB Technologies, Inc~~activities. ~~acquisition.~~

Alion ~~Year~~has ~~Ended~~not ~~September~~been profitable since it became a C 30Corporation in March 2010. As of December 31, ~~1999~~2014, ~~Compared~~the Company has generated $241.1 million in NOL tax deductions. The earliest NOL deduction does not expire until fiscal year 2030. As a result of the offering, the Company’s NOLs will become subject to ~~Year~~an ~~Ended~~annual ~~September 30~~use limitation. The effect of the annual use limitation is that the Company will be able to use up to approximately $150 million of its NOLs over the five-year period following the offering. Another $20-25 million of the Company’s NOLs will be available to be used over the remaining available term of the NOLs. Thus, ~~2000~~a portion of the Company’s NOLs is likely to expire unutilized. In addition to the Company’s existing NOLs, the Company has certain built-in deductions available to reduce its taxable income in future periods.

Alion’s ability to utilize NOL tax benefits will depend upon how much future taxable income it has. Management regularly reviews ~~Contract~~NOL-related U.S. Internal Revenue Code of 1986, as amended, or Code, provisions that could potentially limit the Company’s ability to use its existing NOL deductions in the future. Because Alion’s history of losses makes it unlikely it will be able to realize the full benefit of its deferred tax assets, U.S. GAAP requires management to record a full valuation allowance for all deferred tax assets including NOLs. Therefore, the Company’s deferred tax assets had a zero carrying value as of September 30, 2014 and 2013.

~~Our~~Alion ~~contract~~carries ~~revenue~~a ~~increased~~ $3866.~~6 million,~~8 ~~or 33%, from $117.5~~ million ~~for~~deferred ~~the year~~tax ~~ended~~liability ~~September 30,~~that ~~1999,~~arose tofrom ~~$156.1 million~~prior ~~for~~goodwill ~~the~~deductions ~~year~~that ~~ended~~increased ~~September 30,~~its ~~2000.~~NOLs ~~Approximately $28~~deductions.~~2 million~~ ofThe ~~this~~Company ~~increase~~expects isits ~~associated~~domestic ~~with~~tax ~~the completion~~liability ofto ~~our~~be ~~acquisition~~limited offor ~~AB Technologies and~~ the ~~consolidation~~ offoreseeable ~~its~~future ~~operations into our existing operations. The remaining $10.4 million increase was~~ due to ~~growth~~available ~~in our existing sponsor base~~NOLs, ~~specifically~~and ~~$5.8~~expects ~~million~~only ~~of additional~~minimal ~~support~~foreign toincome ~~the~~taxes ~~Defense Information Systems Agency~~ for ~~information~~ ~~and~~operations ~~analysis~~in ~~for weapons systems and manufacturing technologies and $2~~India.~~0 million~~ inAlion ~~support~~expects ~~by HFA~~ to ~~the~~ ~~Department of the Navy under subcontract to Raytheon Technical Services Corporation in the area of ordnance management.~~

Direct Contract Expenses

Our direct contract expenses increased by $22.4 million, or 25%, from $88.7 million for the year ended September 30, 1999, to $111.1 million for the year ended September 30, 2000, commensurate with our increase in revenue. As a percentage of revenue, direct contract expenses decreased from 75% for the year ended September 30, 1999, to 71% for the year ended September 30, 2000. The percentage decrease is due in part to a decrease in the proportion of material and subcontract direct costs to total direct costs.

Operating Expenses

Our operating expenses increased $14.2 million, or 56%, from $25.5 million for the year ended September 30, 1999, to $39.7 million for the year ended September 30, 2000. Approximately $8.5 million of the increased cost is associated with the operating costs assumed in our acquisition of AB Technologies. Approximately $2.6 million was expended in support of general growth across other areas of the company. Additionally, to accommodate both current and anticipated growth, we incurred $3.1 million in general and administrative expenses related to investments to improve our information technology and internet connectivity capability, build our administrative management infrastructure, and increase internal research and development activities.

Other Income and Expense

Other expenses remained relatively steady at $0.1 million and $0.7 million for the years ended September 30, 1999, and September 30, 2000, respectively. There was a $1.2 million increase in interest expense in the year ended September 30, 2000, related to increased borrowings under our revolving credit facility to provide working capital and to finance capital expenditures and acquisitions. Approximately $0.5 million of this increase was attributable to recognition of our proportionate share of AB Technologies’

~~operating~~continue ~~loss~~to ~~for~~recognize ~~the~~deferred ~~period~~income ~~during~~tax ~~which~~expense ~~we held~~for atax-deductible ~~25%~~goodwill ~~interest~~for ~~in AB Technologies stock, prior to our purchase of~~ the ~~assets~~next ofseveral ~~AB Technologies~~years. ~~This~~See ~~increase~~Note ~~in other~~18 ~~expenses~~to ~~was~~the ~~offset~~unaudited byfinancial astatements ~~$1.3 million~~for ~~gain~~information onabout the ~~sale~~ components of the ~~land~~Company’s indeferred ~~Annapolis,~~tax ~~Maryland~~assets.

~~Income~~Net ~~Tax~~Loss ~~(Expense) Benefit~~

~~HFA~~We ~~recorded~~lost a $09.~~2 million~~9 ~~provision for income taxes against approximately $0.5~~ million in ~~operating~~ ~~income~~first ~~for~~quarter fiscal year ~~2000~~2015. ~~Additionally,~~ This was an $08.2 6 million ofimprovement ~~income~~over ~~tax~~the ~~expense~~$18.5 ~~was~~million ~~recorded~~net ~~for~~loss ~~the year~~in ~~ended~~first ~~September 30,~~quarter fiscal ~~2000~~year ~~for~~2014. ~~unrelated~~Operating ~~business~~ income ~~arising~~ ~~from~~was ~~the~~up AB$11.8 ~~Technologies,~~million ~~Inc.~~in ~~acquisition.~~first ~~During~~ quarter fiscal year ~~1999,~~2015 ~~HFA~~as ~~had~~compared anto ~~operating~~first ~~loss~~quarter offiscal ~~$0.7 million and~~year ~~recorded~~2014 abut ~~tax~~was ~~benefit~~partly ofoffset ~~approximately~~by $03.2 5 million in higher interest expense.

~~Liquidity~~Backlog ~~and Capital Resources~~

~~For~~As ~~fiscal~~of ~~years~~December 31, ~~1999~~2014, management ~~through~~estimates ~~2001,~~the ~~our~~amount ~~primary liquidity~~of ~~requirements~~future ~~were~~revenues ~~for~~to ~~debt~~be ~~service~~recognized under anour existing ~~credit~~ ~~facility~~contracts ~~for~~to ~~working~~be ~~capital~~approximately ~~needs,~~$1.5 ~~capital expenditures~~billion, ~~and~~ ~~acquisitions.~~of ~~Our~~which ~~principal~~approximately ~~working~~$499 ~~capital~~million ~~need~~is ~~has~~funded. ~~been~~Of ~~to fund accounts receivable, which have increased with~~ the ~~growth of our business~~$1.5 Onbillion anof ~~annual basis~~backlog, ~~our~~the ~~recurring~~amount ~~capital expenditure~~not ~~investment~~reasonably ~~requirements~~expected ~~have been approximately 1%~~ to be 4%filled ofin ~~our~~fiscal ~~annual~~year ~~revenue.~~2015 ~~Requirements~~is ~~for~~approximately ~~acquisitions are dictated by the terms of each transaction~~$0. 8 billion.

~~For~~All ~~the~~of ~~past~~our ~~three~~existing ~~years~~contracts wemay have funded ~~our~~backlog and unfunded ~~liquidity~~backlog, ~~requirements~~each ~~with~~of ~~cash~~which ~~from~~is ~~operations~~described below. The contract values and ~~drawdowns~~management’s estimated revenues do not include any task orders or ceiling value under IDIQ contracts, including GWACs and GSA schedules, except to the extent that task orders ~~from~~have ~~our~~been ~~$25.0 million~~awarded ~~revolving~~to ~~credit~~us ~~facility~~under those contracts.

~~Net~~• ~~cash~~Funded ~~used~~Backlog. inFunded ~~operations~~backlog ~~was~~represents ~~$0.1 million for~~ the ~~24-week~~estimated ~~period~~revenue ~~ended~~value ~~March 16,~~of ~~2001,~~orders ~~compared~~for ~~to $4.2 million~~services ~~used~~under inexisting ~~operations~~contracts for ~~the~~which ~~same~~funding ~~period~~is ~~in 2002.~~appropriated ~~This~~or ~~change~~otherwise ~~was~~authorized ~~primarily~~less ~~due to a $4.7 million increase in accounts receivable. Increased expense associated with~~ revenue ~~growth~~previously ~~accounted~~recognized ~~for~~on ~~approximately $1.9 million~~these ~~of this increase in cash used in operations~~contracts. We ~~also~~expect ~~used $2.8 million in cash~~ to ~~fund~~recognize ~~increased unbilled~~a ~~accounts~~substantial ~~receivable~~portion ~~associated~~of ~~with~~our ~~contracts~~funded ~~where~~backlog ~~we are~~as ~~awaiting~~revenue ~~specific~~by ~~funding~~December in31, ~~order to invoice for services already rendered~~2015.

Cash used in operating activities for fiscal year 2000 was $4.0 million, compared to cash provided by operating activities of $9.9 million for fiscal year 2001. This increase in cash provided by operations was primarily due to increased net income in fiscal year 2001.


	As of December 31,
	2014		2013
	(Dollars in millions)
Backlog:
Funded	$	498.6	$	364.3

~~Net~~• ~~cash~~Unfunded ~~provided~~Backlog. byUnfunded ~~investing~~backlog ~~activities~~represents ~~for~~ the ~~24-week~~ ~~period~~estimated ~~ended~~revenue ~~March 16,~~value ~~2001, was $12.1 million, compared to net cash used in investing activities~~ of ~~$2.0 million~~orders for ~~the~~services ~~24-week~~under ~~period~~existing ~~ended March 15,~~contracts ~~2002. This decrease in cash provided by investing activities was primarily due to the impact of receiving $12.2 million in cash proceeds in fiscal year 2001~~ for ~~the sale~~which offunding ahas ~~building.~~not ~~There~~been ~~was~~appropriated noor ~~similar~~otherwise ~~transaction in 2002~~authorized.

Cash used in investing activities for fiscal year 2000 was $3.0 million, compared to cash provided by investing activities of $9.9 million for fiscal year 2001. This increase in cash provided by operations was attributable to a $2.5 million payment in fiscal year 2000 for the purchase of assets associated with the acquisition of AB Technologies, compared to the receipt in 2001 of $12.2 million in cash proceeds associated with the sale of a building.


	As of December 31,
	2014		2013
	(Dollars in millions)
Backlog:
Unfunded	$	1,047.5	$	1,213.7

~~Net~~In ~~cash~~fiscal ~~used~~year in2013, ~~financing~~management ~~activities~~refined ~~was $11.7 million~~the ~~for~~methodology ~~the~~used ~~24-week~~to ~~period~~determine ~~ended~~funded ~~March 16~~backlog and unfunded backlog, ~~2001,~~including ~~compared~~only toestimates ~~net~~of ~~cash~~future ~~provided~~revenues byto ~~financing~~be ~~activities~~recognized ~~of $6.6 million~~under ~~for~~awarded ~~the~~contracts. ~~same~~The ~~period~~change in ~~2002~~backlog estimating methodology better aligned our backlog estimates with our industry peer group. ~~This~~Each ~~increase~~fiscal inyear quarter our funded and unfunded ~~cash~~backlog ~~provided~~estimates are determined by ~~financing~~analyzing ~~activities~~a ~~was~~number ~~primarily~~of ~~due~~key ~~to increased~~factors ~~borrowings~~and ~~under~~attributes for each of our ~~revolving~~executed ~~bank~~contracts, ~~credit~~task ~~facility~~orders ~~of $4~~or delivery orders.~~7 million~~ toBased ~~fund~~upon ~~working~~the ~~capital,~~result ~~$1.5 million~~of ~~to fund~~our ananalysis ~~incentive~~we ~~compensation~~establish ~~plan~~the expected revenue value for each of those items contracts, task orders or delivery orders and ~~approximately $1~~report those results on a consolidated basis.~~1 million~~ toSee ~~fund~~“Risk ~~transaction~~Factors ~~costs~~– ~~related~~Risks Related to ~~this offering~~Our Business and Operations – We may not realize the ~~acquisition~~full amount of ~~IITRI~~our ~~assets.~~backlog, which could lower future revenue”.

~~Net~~There ~~cash~~can ~~provided~~be byno ~~financing~~assurance ~~activities~~that ~~for fiscal~~our ~~year~~existing ~~2000~~contracts ~~was~~will ~~$4.1 million,~~result ~~compared~~in toactual ~~net~~revenue ~~cash used~~ in ~~financing~~any ~~activities~~particular ofperiod, ~~$19.9 million~~or ~~for fiscal~~at ~~year~~all, ~~2001.~~or ~~This~~that ~~increase~~any contract included in ~~cash~~backlog ~~used~~will inbe ~~financing~~profitable. ~~activities reflects~~There ~~approximately~~is a ~~$10.8 million~~higher ~~repayment~~degree onof ~~our revolving~~risk ~~bank~~in ~~credit~~

Filing Compare · HII Mission Technologies Corp.