8-K

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 8-K

                                 CURRENT REPORT

     Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934


         Date of Report (Date of Earliest Event Reported): July 1, 2005


                               HALIFAX CORPORATION
             (Exact name of registrant as specified in its charter)


       Virginia            1-08964               54-0829246
  (State or other       (Commission File      (I.R.S. Employer
  jurisdiction of           Number)         Identification No.)
   incorporation)

                5250 Cherokee Avenue, Alexandria, Virginia 22312
                (Address of principal executive offices/Zip Code)


Registrant's telephone number, including area code:  (703) 658-2400

Former  name,  former  address, and former fiscal year, if  changed  since  last
report:  N/A


Check  the  appropriate box below if the Form 8-K filing is intended to  satisfy
the filing obligation of the registrant under any of the following provisions:

[ ]  Written communications pursuant to Rule 425 under the Securities Act
     (17 CFR 230.425)

[ ]  Soliciting material pursuant to Rule 14a-12 under the Exchange Act
     (17 CFR 240.14a-12)

[ ]  Pre-commencement communications pursuant to Rule 14d-2(b) under the
     Exchange Act(17 CFR 240.14d-2(b))

[ ]  Pre-commencement communications pursuant to Rule 13e-4(c) under the
      Exchange Act (17 CFR 240.13e-4(c))


Forward Looking Statements

     Certain statements in this Annual Report on Form 10-K constitute "forward-
looking statements" within the meaning of the Federal Private Securities
Litigation Reform Act of 1995. While forward-looking statements sometimes are
presented with numerical specificity, they are based on various assumptions made
by management regarding future events over which we have little or no control.
Forward-looking statements may be identified by words including "anticipate,"
"believe," "estimate," "expect" and similar expressions.  We caution readers
that forward-looking statements, including without limitation, those relating to
future business prospects, revenues, working capital, liquidity, and income, are
subject to certain risks and uncertainties that would cause actual results to
differ materially from those indicated in the forward-looking statements.
Factors that could cause actual results to differ from forward-looking
statements include the concentration of our revenues, risks involved in
contracting with our customers, including difficulties to accurately estimate
costs when bidding on a contract and the occurrence of start-up costs prior to
receiving revenues and contract with fixed price provisions, government
contracting risks, potential conflicts of interest, difficulties we may have in
attracting and retaining management, professional and administrative staff,
fluctuation in quarterly results, risks related to acquisitions and acquisition
strategy, continued favorable banking relationships, the availability of capital
to finance operations and ability to make payments on outstanding indebtedness,
weakened economic conditions, acts of terrorism, risks related to competition
and our ability to continue to perform efficiently on contracts, and other risks
and factors identified from time to time in the reports we file with the
Securities and Exchange Commission ("SEC"), including our Annual Report on Form
10-K.  Should one or more of these risks or uncertainties materialize, or should
underlying assumptions prove incorrect, actual results may vary materially from
those anticipated, estimated or projected.

     Forward-looking statements are intended to apply only at the time they are
made.  Moreover, whether or not stated in connection with a forward-looking
statement, the Company undertakes no obligation to correct or update a forward-
looking statement should we later become aware that it is not likely to be
achieved.  If the Company were to update or correct a forward-looking statement,
you should not conclude that the Company will make additional updates or
correction thereafter.

ITEM 1.01  ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT

     On June 30, 2005, we simultaneously entered into and closed on an asset
purchase agreement with INDUS Corporation pursuant to which we sold
substantially all of the assets and certain liabilities of our secure network
services business.  The purchase price was approximately $12.5 million, subject
to adjustments described in the asset purchase agreement based on the net assets
of the business on the date of closing.  The asset purchase agreement provides
that $3.0 million of the purchase price will be held in escrow.  Of this amount,
$625,000 will be held as security for the payment of our indemnification
obligations pursuant to the asset purchase agreement, if any, and will be
released to us eighteen (18) months following the date of the asset purchase
agreement unless a certain key government contract, referred to as the Key
Contract, is not assigned (referred to as a novation) as of such time.  A
portion of the escrow amount equal to $2,000,000 (which includes the portion
referenced above for indemnification obligations), plus any interest or other
income earned thereon, will also serve as security for a payment obligation we
have to INDUS Corporation if the novation of the Key Contract from us to INDUS
Corporation is not approved by such government customer and received within two
years from the date of the asset purchase agreement.  If such novation of the
Key Contract is not received by the second anniversary of the date of the asset
purchase agreement or if such novation is affirmatively rejected prior to such
time under circumstances not giving rise to the rescission right referenced
below, we will be obligated to pay to INDUS Corporation an amount equal
$2,000,000 with the entire amount then held in escrow being released to INDUS
Corporation as full or partial payment of such obligation, as the case may be.
We will be obligated to pay directly to INDUS Corporation the amount, if any, by
which the balance of escrow funds at the time of disbursement is less than
$2,000,000.  Finally, a portion of the escrow amount equal to $1,000,000 serves
as security for a payment obligation we have to INDUS Corporation in connection
with a failure to obtain certain consents related to the transaction.  In
addition, INDUS Corporation has certain rescission rights.  First, if the
government customer to the Key Contract rejects the novation of such Key
Contract on or before the six month anniversary of the date of the asset
purchase agreement and the government customer takes action to preclude us from
providing INDUS Corporation with the economic benefit of such Key Contract
(whether by subcontract or otherwise), INDUS Corporation may rescind the entire
sale transaction in lieu of being paid the $2,000,000 amount referenced above.
Second, if we are unable to provide INDUS Corporation with evidence of the
government's approval of the assignment to INDUS Corporation to a material
contract (other than the Key Contract) on or before a date roughly six months
from the date of closing, INDUS Corporation may rescind the transaction.  The
asset purchase agreement contains representations, warranties, covenants and
related indemnification provisions, in each case that are customary in
connection with a transaction of this type; however, certain of the
representations and warranties require updating to a date which is the earlier
of the contract novation or thirty months from the closing.  In addition,
survival periods applicable to such updated warranties may be extended together
with related indemnification periods.  The secure network services business
comprised approximately $13.5 million, or 22%, and $9.5 million, or 19%, of our
revenues for the fiscal years ended 2005 and 2004 and represented 7% of our
assets at March 31, 2005.
     In connection with the asset purchase agreement, we also transferred to
INDUS Corporation all of our right, title and interest in and to our Federal
Supply Service Information Technology (Schedule 70) Contract (the "Contract")
with the federal government and a Blanket Purchase Agreement ("BPA") that we
entered into with one federal agency pursuant to the Contract.  Since we have a
need to utilize the Contract and BPA in connection with businesses that we have
retained, we entered into a transition services agreement with INDUS Corporation
with respect to the Contract and BPA in order to continue performing existing,
and to receive new, task/delivery orders from federal government agencies
awarded under the Contract and BPA until such time as we are awarded a new
Federal Supply Service Information Technology Contract.

ITEM 2.01  COMPLETION OF ACQUISITION OR DISPOSITION OF ASSETS

     Halifax completed the sale of assets described above on June 30, 2005.  The
information contained in Item 1.01 above is hereby incorporated by reference
into this Item 2.01.

ITEM 9.01.  FINANCIAL STATEMENTS AND EXHIBITS

     (a)  Financial Statements of Businesses Acquired

          None.

     (b)  Pro-forma Financial Information

          Any required pro forma financial information will be filed as an
          amendment to this Form 8-K within four (4) business days after the
          date of the earliest event reported on this Form 8-K.




     (c)  Exhibits

The following exhibit is filed herewith

     Exhibit
     Number    Description


     99.1           Press Release dated July 1, 2005.




                                    SIGNATURE




Pursuant  to  the  requirements of the Securities  Exchange  Act  of  1934,  the
Registrant  has  duly  caused this report to be signed  on  its  behalf  by  the
undersigned hereunto duly authorized.

                                   HALIFAX CORPORATION



Date:  July 1, 2005                By:  /s/Joseph Sciacca
                                        Joseph Sciacca
                                        Vice President, Finance & CFO













                                  EXHIBIT INDEX




     Exhibit No.              Description

               99.1           Press Release July 1, 2005.

EX-99.1

                                                                    Exhibit 99.1


                  HALIFAX ANNOUNCES SALE OF ITS SECURE NETWORK
                   SERVICES BUSINESS FOR $12.5 MILLION IN CASH
      Company Centralizes Focus on Enterprise Maintenance Services Business


ALEXANDRIA, VA - July 1, 2005 - Halifax Corporation (AMEX:HX) today announced
that it has sold its Secure Network Services business to INDUS Corporation for
$12.5 million in cash, subject to adjustment.  The sale, effective today,
includes all assets of the business including associated contracts and certain
liabilities.

Charles McNew, president and chief executive officer, stated, "Although the
Secure Network Services business generated $13.6 million in annual revenues for
our most recent fiscal year, it does not fit into our core enterprise
maintenance strategy.  Additionally, the infusion of cash significantly
strengthens our balance sheet and expands our options."

The sale was simultaneously signed and closed under an asset purchase agreement,
in which Halifax has sold substantially all of the assets and certain
liabilities of the Secure Network Services division for $12.5 million, subject
to certain adjustments and holdbacks described in the agreement among the
parties.  The Secure Network Services division provides infrastructure support
services (voice, data and video) for secure environments.

He added, "The contracts and customer relationships of the Secure Network
Services business will be valuable to INDUS, as it continues to expand its IT
services work for the federal government.  I'm confident that INDUS not only
will continue to provide a high level of service and support to our customers,
but that it will offer greater opportunities for growth for our employees and
suppliers given its exclusive focus on the federal marketplace."

BB&T Capital Market  Windsor Group served as the exclusive financial advisor for
Halifax in this transaction.  Reference is made to the Company's current Report
on Form 8K to be filed with the Securities and Exchange Commission, for
additional information on the transaction.



Since 1993, INDUS Corporation has provided sophisticated IT solutions to the
federal government.  INDUS specializes in mission-critical initiatives for such
government agencies as NASA, EPA, the Departments of Transportation, Commerce,
Health and Human Services, Education, Homeland Security and Defense, as well as
the intelligence community.  INDUS is supporting federal customers in over 50
locations throughout the United States.  For more information, visit
www.induscorp.com.

Founded in 1967, Halifax Corporation is an enterprise maintenance solutions
company providing a wide range of technology services to commercial and
government customers throughout the United States.  The Company's principal
products are high availability hardware maintenance services, technology
deployment and integration services.  More information on Halifax can be found
at www.hxcorp.com.

Certain statements made by the Company which are not historical facts may be
considered forward-looking statements, including, without limitation, statements
as to trends, management's beliefs, views, expectations and opinions, which are
based upon a number of assumptions concerning future conditions that ultimately
may prove to be inaccurate.  Such forward-looking statements are subject to
risks and uncertainties and may be affected by various factors described in the
Risk Factors Section in the Company's Annual Report on Form 10-K that may cause
actual results to differ materially from those in the forward-looking
statements.  For further information that could affect the Company's financial
statements, please refer to the Company's reports filed with the Securities and
Exchange Commission.