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TABLE OF CONTENTS

As filed with the Securities and Exchange Commission on October 9, 2003

Registration No. 333-107764

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

AMENDMENT NO. 5
TO
FORM S-1

REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933

DIGITALNET HOLDINGS, INC.
(Exact name of registrant as specified in its charter)

2525 Network Place
Herndon, VA 20171
(703) 563-7500
(Address, including zip code, and telephone number, including area code, of registrant's principal executive offices)

Ken S. Bajaj
Chairman, President and Chief Executive Officer
DigitalNet Holdings, Inc.
2525 Network Place
Herndon, VA 20171
(703) 563-7500
(Name, address, including zip code, and telephone number, including area code, of agent for service)

Approximate date of commencement of proposed sale to public:
As soon as practicable after this registration statement becomes effective.

        If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act, check the following box. o

        If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) 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 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 this Form is a post-effective amendment filed pursuant to Rule 462(d) 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, check the following box. o

CALCULATION OF REGISTRATION FEE

(1)

Includes 750,000 shares issuable upon exercise of the underwriters' overallotment option.

(2)

Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(o) under the Securities Act of 1933. The proposed maximum offering price includes amounts attributable to shares that may be purchased by the underwriters to cover the underwriters' option to purchase additional shares of our common stock from us at the initial public offering price less the underwriters' discount, if the underwriters exercise this option.

(3)

Previously paid.

        The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Commission, acting pursuant to said section 8(a), may determine.

SUBJECT TO COMPLETION, DATED OCTOBER 9, 2003

The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

PRELIMINARY  PROSPECTUS

5,000,000 Shares

DigitalNet Holdings, Inc.

Common Stock
$  per share

         We are selling 5,000,000 shares of our common stock.

         This is the initial public offering of our common stock. We currently expect the initial public offering price to be between $14.00 and $16.00 per share. Our common stock has been approved for quotation on the Nasdaq National Market under the symbol "DNET."

         Investing in our common stock involves risks. See "Risk Factors" beginning on page 10.

        Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

        The underwriters may also purchase up to an additional 750,000 shares of common stock from us at the public offering price, less the underwriting discount and commissions, within 30 days from the date of this prospectus.

         The underwriters expect to deliver the shares to purchasers on or about            , 2003.

                    , 2003

        You should rely only on the information contained in this prospectus. We have not authorized anyone to provide you with different information. We are not making an offer of these securities in any state where the offer is not permitted. You should not assume that the information contained in this prospectus is accurate as of any date other than the date on the front cover of this prospectus.

TABLE OF CONTENTS

        Until            , 2003 (25 days after the date of this prospectus), all dealers that buy, sell or trade our common stock, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers' obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.

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SUMMARY

        This is only a summary and it does not contain all the information that may be important to you. You should read the entire prospectus, especially "Risk Factors" and the DigitalNet Holdings, Inc. and DigitalNet Government Solutions, LLC ("DGS") consolidated financial statements and the related notes included in this prospectus before deciding to invest in shares of our common stock. Our pro forma financial information gives effect to the acquisition of our predecessor, Getronics Government Solutions, L.L.C., and related financing transactions as if they had occurred on January 1, 2002, as further described in "Unaudited Pro Forma Consolidated Financial Information." Unless otherwise specifically stated, the information in this prospectus has been adjusted to reflect the conversion of all outstanding shares of Class A Preferred Stock into common stock on the completion of this offering, but does not take into account the possible issuance of additional shares of common stock to the underwriters pursuant to their right to purchase additional shares of our common stock from us at the initial public offering price, less the underwriters' discount.

Company Overview

        We are a leading provider of managed network services, information security solutions, and application development and integration services to U.S. defense, intelligence, and civilian federal government agencies as measured by our revenues. Our comprehensive information technology services and solutions allow our federal government clients to outsource the design, implementation, integration, management, and security of their computer networks and systems. We are focused on increasing network reliability, reducing overall network costs, and rapidly migrating mission critical network computing environments to new technologies. Our remote and on-site managed network services are critical for maintaining the daily operations of numerous federal agencies, and we estimate that these services comprised approximately 72% of our pro forma revenues for the year ended December 31, 2002 and approximately 66% of our revenues for the six months ended June 30, 2003.

        On July 16, 2003 our wholly-owned subsidiary, DigtalNet, Inc., filed a registration statement on Form S-4 (File No. 333-107095-02) with the Securities and Exchange Commission in connection with an offer to exchange up to $125.0 million in aggregate principal amount of 9% senior notes due 2010 that were issued in a private placement on July 3, 2003 for 9% senior notes due 2010, which will be registered under the Securities Act of 1933, as amended. As described in "Use of Proceeds," we expect to redeem approximately $43.8 million in aggregate principal amount of the outstanding 9% senior notes due 2010 for approximately $47.7 million, or 109% of the aggregate principal amount of the notes being redeemed.

        We have a more than 30-year history of providing information technology solutions to U.S. federal government clients, and have established long-standing relationships with many of them. Our clients include the Department of Defense, the Department of State, the Department of Justice, the Department of Treasury, the National Security Agency, and other federal government clients with critical missions, such as intelligence and homeland security. We currently serve over 60 government clients on over 160 active engagements, across many defense, intelligence, and civilian agencies, which creates a diversified revenue stream. We provide many of our services under multi-year contracts.

        Our actual and pro forma revenues for the year ended December 31, 2002 were approximately $33.9 million and $367.8 million, respectively and our revenues for the six months ended June 30, 2003 were $160.3 million. Contracts funded by clients within the federal government accounted for approximately 98% of our pro forma revenues for the year ended December 31, 2002 and approximately 99% of our revenues for the six months ended June 30, 2003. As of June 30, 2003, our backlog was approximately $743 million, of which approximately $119 million was funded. For a discussion of our backlog, see "Business—Backlog."

        Prior to our acquisition of DGS, our predecessor lost its Immigration and Naturalization, or INS, Facilities Operations Support, or FOS, contract, which ended on November 30, 2002 and which accounted for approximately $60.1 million and 16.4% of our pro forma revenues for the year ended December 31, 2002. We had no revenues from this contract for the six months ended June 30, 2003. Our work for the National

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Aeronautics and Space Administration, or NASA, through a subcontract with Lockheed Martin Corporation on the Consolidated Space Operations Contract, or CSOC, will end in December 2003, subject to Lockheed Martin's options to purchase additional labor from us. This contract accounted for approximately $49.3 million and 13.4% of our pro forma revenues for the year ended December 31, 2002 and approximately $21.9 million and 13.7% of our revenues for the six months ended June 30, 2003.

        Our management team has substantial experience leading companies that provide technology services to the Department of Defense, the intelligence community, and civilian federal government agencies. Our executive team is supported by a high quality staff of nearly 1,650 people. As of September 10, 2003, approximately 80% of our employees were professional staff. As of June 30, 2003, approximately 62% of our employees held government security clearances and approximately 53% of these employees held Top Secret clearance or higher, which allows us to work with our clients in highly classified environments.

Industry Background

        The federal government is the largest consumer of information technology services and solutions in the U.S. According to INPUT, an independent federal government market research firm, the federal information technology market is expected to grow at a compound annual growth rate of 8.5%, from $45.4 billion in federal fiscal year 2003 to $68.2 billion in federal fiscal year 2008. Federal government spending on outsourced information technology, our primary market, is expected to grow at a compound annual growth rate of 12.6%, from $8.9 billion in fiscal year 2003 to $16.1 billion in fiscal year 2008, according to INPUT. We believe that the continued increase in the federal government's spending on information technology over the next several years will be primarily driven by the following factors:

•

increased spending on defense, intelligence, and homeland security initiatives;



•

demand for greater government efficiency and effectiveness; and



•

increased demand for complex, interoperable, and reliable networks.

Our Competitive Advantages

        We believe we are well positioned to address the specific requirements of our clients because we possess the following key competitive advantages:

•

knowledge of our clients' business processes, information architecture and technology initiatives;



•

in-depth network computing and information security expertise;



•

highly skilled technical and managerial professionals;



•

a disciplined program management review process; and



•

an experienced management team.

Our Strategy

        Our objective is to continue to profitably grow our business as a leading provider of information technology services and solutions. Key elements of our strategy include:

Leverage Our Differentiated Services and Solutions to Expand Our Client Base

        We believe our experience and highly differentiated services and solutions offerings will enable us to expand our client base in high growth areas of the federal information technology services market. We also believe our investment in emerging technologies, and our processes, methodologies, and best practices ensure high quality and consistent offerings in managed network services, information security solutions, and application development and integration solutions.

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Build on Our Longstanding Client Relationships to Cross-Sell Our Full Range of Services and Solutions

        We intend to continue our efforts to expand the scope of our existing client relationships by broadening the range of services we provide to our clients. Providing additional services to our clients should increase our overall knowledge of our clients' business and technical requirements, which we believe will contribute to increased use of our services over time.

Accelerate Our Sales and Marketing Efforts

        We intend to accelerate our sales and marketing efforts by adding additional business development personnel, increasing our spending on bid and proposal efforts, and leveraging the industry relationships of Ken S. Bajaj, our Chief Executive Officer, and Steven Hanau, the President of DGS.

Expand Our Services and Solutions Offering

        We plan to continue expanding our services and solutions in the areas of directory services, mobile computing, and secure remote access. We intend to continue to expand our services and solutions in areas such as managed network services, information security services, and other emerging technologies.

Pursue Strategic Acquisitions

        We may pursue strategic acquisitions that can cost-effectively add new clients, specific federal agency knowledge, or technological expertise to accelerate our access to existing or new markets.

        We were incorporated in 2001 under the laws of the State of Delaware and commenced operations in September 2001. We had no material business operations until our acquisition of Getronics Government Solutions, L.L.C. (now DigitalNet Government Solutions, LLC) in November 2002. Our predecessor, Getronics Government Solutions, L.L.C., was a U.S. subsidiary of a Netherlands-based company and had a more than 30-year history of providing information technology-based solutions to the federal government. Members of our executive team have managed portions of this business in the past. All of our operations are conducted through DGS, which is an indirect wholly-owned subsidiary of DigitalNet Holdings, Inc. Our headquarters are located at 2525 Network Place, Herndon, Virginia 20171, and our telephone number is (703) 563-7500. Our website address is www.digitalnet.com. We do not intend the information on our website to constitute part of this prospectus.

        DIGITALNET^SM and its logo are our service marks and trademarks.

        This prospectus includes trademarks and service marks owned by third parties.

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The Offering

         The common stock to be outstanding after the offering includes the conversion of our Class A Preferred Stock outstanding as of June 30, 2003, including accrued dividends, into 4,239,320 shares of common stock upon the completion of this offering, assuming an initial public offering price of $15.00 per share, the mid-point of the range shown on the cover page of this prospectus. Our Class A Preferred Stock accrues dividends on a daily basis at an annual rate of 6%. Upon conversion, dividends that have accrued from June 30, 2003 to the date of conversion will increase the number of shares of common stock into which our Class A Preferred Stock converts.

        The foregoing information is based upon shares outstanding as of June 30, 2003 and excludes:

•

208,025 shares of common stock that will be subject to issuance upon exercise of the options we granted in August 2003 under our amended and restated 2003 stock incentive plan;



•

165,391 shares of common stock reserved for future issuance under our amended and restated 2003 stock incentive plan, including the approximately 80,000 shares that will be subject to issuance upon exercise of the options we expect to grant pursuant to the plan shortly after the completion of this offering;



•

94,868 shares of common stock subject to outstanding warrants to purchase common stock at an exercise price of $0.01 per share;



•

379,475 shares of common stock subject to outstanding warrants to purchase common stock at an exercise price of $0.01 per share, which were cancelled upon our repayment in full of our subordinated bridge facility on July 3, 2003; and



•

750,000 shares of common stock that may be issued pursuant to the underwriters' option to purchase additional shares of our common stock from us at the initial public offering price less the underwriters' discount.

        Except as otherwise indicated, information in this prospectus has been adjusted to give effect to a one-for-eight reverse common stock split effective as of March 28, 2003.

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Summary Financial Data

        The following summarizes our historical and pro forma as adjusted consolidated financial information. We derived the historical financial information from our and our predecessor's audited and unaudited consolidated financial statements included elsewhere in this prospectus. The unaudited pro forma as adjusted statement of operations data for the year ended December 31, 2002 gives effect to the transactions described in note (2) below. The unaudited pro forma as adjusted balance sheet data as of June 30, 2003 gives effect to the transactions described in note (8) below.

        This information should be read in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations," "Unaudited Pro Forma Consolidated Financial Information," and the consolidated financial statements and related notes of DigitalNet and DGS appearing elsewhere in this prospectus.

DigitalNet Holdings, Inc.
Summary Historical and Pro Forma As Adjusted Consolidated Financial Data
(dollars in thousands)

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(1)

On November 26, 2002, we acquired all of the membership interests of Getronics Government Solutions, L.L.C. (now DigitalNet Government Solutions, LLC or DGS). Our results of operations for the year ended December 31, 2002 include the operating results of DGS from November 26, 2002 through December 31, 2002 along with that of DigitalNet Holdings, Inc. for the entire year ended December 31, 2002.

(2)

The unaudited pro forma as adjusted statement of operations data gives effect to (i) the DGS acquisition and the related financing transactions, (ii) the sale of the 9% senior notes due 2010 and certain related transactions, and (iii) this offering and certain related transactions as if each of the transactions had occurred on January 1, 2002. See "Unaudited Pro Forma Consolidated Financial Information" for a detailed discussion of the pro forma as adjusted statement of operations data.

(3)

On January 1, 2002, DGS adopted SFAS No. 142, "Goodwill and Other Intangible Assets," which requires that goodwill no longer be amortized. If SFAS No. 142 had been effective for the years ended December 31, 2000 and 2001, net income would have increased by approximately $5.4 million and $4.2 million, respectively, resulting in net income of approximately $7.2 million and $22.5 million, respectively.

(4)

EBITDA is defined as net income (loss) plus interest, income taxes, depreciation, and amortization. Our method of computation may or may not be comparable to other similarly titled measures used by other companies. EBITDA is presented because we believe EBITDA is a meaningful indicator that can be used by investors to analyze and compare our operating performance to the operating performance of other companies. However, EBITDA should not be construed as an alternative to net income as determined in accordance with accounting principles generally accepted in the United States, as an indicator of our operating performance or as an alternative to cash flows as a measure of liquidity. A reconciliation of net income (loss) to EBITDA is as follows (dollars in thousands):

(5)

Revenues, as adjusted, represent revenues, as reported, less revenues derived from our Immigration and Naturalization Service, or INS, Facilities Operation Support, or FOS, contract and our National Aeronautics and Space Administration, or NASA, Consolidated Space Operations Contract, or CSOC. Because our performance under the INS/FOS contract ended November 30, 2002 and our performance under the NASA CSOC contract will end on December 31, 2003, management believes that revenues, as adjusted, presents investors with a meaningful depiction of our ongoing business at the date of the DGS acquisition. A reconciliation of revenues, as reported, to revenues, as adjusted, is as follows (dollars in thousands):

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(6)

EBITDA, as adjusted, represents EBITDA as set forth above, less gross profit associated with our INS/FOS contract and our NASA CSOC contract, plus stock-based compensation and acquisition and related expenses. Our method of computation may or may not be comparable to other similarly titled measures used by other companies. EBITDA, as adjusted, should not be construed as either an alternative to net income, as determined in accordance with accounting principles generally accepted in the United States, as an indicator of our operating performance or as an alternative to cash flows as a measure of liquidity. Gross profit associated with our INS/FOS contract and our NASA CSOC contract represents the amount by which revenues associated with these contracts exceeds the costs of revenues associated with these contracts. Because our performance under the INS/FOS contract ended November 30, 2002 and our performance under the NASA CSOC contract will end on December 31, 2003, management believes that EBITDA, as adjusted, presents investors with a meaningful depiction of our ongoing business at the date of the DGS acquisition. We have also excluded stock-based compensation from EBITDA, as adjusted, because our predecessor did not incur similar expenses due to the nature of its ownership and management believes that such presentation provides greater comparability for our results of operations to the prior periods presented for our predecessor. In addition, we have excluded acquisition and related expenses from EBITDA, as adjusted, because management believes that such expenses were non-recurring as they relate to transactions in the period prior to or concurrent with the commencement of substantive operations upon the acquisition of DGS. A reconciliation of EBITDA to EBITDA, as adjusted, is as follows (dollars in thousands):

(7)

Capital expenditures on a pro forma as adjusted basis represent the sum of capital expenditures for DGS for the period from January 1, 2002 to November 25, 2002 and for DigitalNet for the year ended December 31, 2002.

(8)

The unaudited pro forma as adjusted balance sheet data gives effect to (i) the sale of the 9% senior notes due 2010 and certain related transactions and (ii) this offering and certain related transactions. The unaudited pro forma as adjusted balance sheet data gives effect to each of these transactions as if they had occurred on June 30, 2003. See "Capitalization" and "Unaudited Pro Forma Consolidated Financial Information" for a detailed discussion of the pro forma as adjusted balance sheet data.

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Recent Developments

        Our third quarter ended on September 30, 2003. Set forth below is a discussion of our unaudited financial information for the three months ended September 30, 2003 and our predecessor's unaudited financial information for the three months ended September 30, 2002.

        Revenues for the three months ended September 30, 2003 were $86.1 million, compared to our predecessor's revenues of $91.9 million for the three months ended September 30, 2002. Excluding revenues from both the INS/FOS contract and the NASA CSOC contract, revenues for the three months ended September 30, 2003 were $74.6 million, compared to our predecessor's revenues of $62.6 million for the three months ended September 30, 2002. Because our performance under the INS/FOS contract ended November 30, 2002 and our performance under the NASA CSOC contract will end on December 31, 2003, management believes that revenues and income from operations excluding the effect of these contracts present investors with a meaningful depiction of our ongoing business. The schedule on the following page reconciles the information set forth above and in the following paragraph.

        Income from operations for the three months ended September 30, 2003 was $6.7 million, compared to our predecessor's income from operations of $11.8 million for the three months ended September 30, 2002. Excluding the revenues and costs of revenues from both the INS/FOS contract and the NASA CSOC contract, our income from operations for the three months ended September 30, 2003 was $6.7 million, compared to our predecessor's income from operations of $6.5 million for the three months ended September 30, 2002. Income from operations for the three months ended September 30, 2003 includes $2.6 million of amortization expense, $2.0 million of depreciation expense and $0.2 million of stock-based compensation expense. The amortization expense in 2003 relates to the intangible assets acquired in the DGS acquisition. Our predecessor's income from operations for the three months ended September 30, 2002 includes approximately $2.1 million of depreciation expense. Our predecessor did not have amortization expense or stock-based compensation expense for the three months ended September 30, 2002.

        Net loss for the three months ended September 30, 2003 was $0.6 million (which is calculated prior to dividends and accretion on preferred stock), compared to our predecessor's net income of $7.7 million for the three months ended September 30, 2002. The net loss for the three months ended September 30, 2003 includes $2.7 million of non-recurring charges, net of the associated tax benefit, related to the refinancing transactions that occurred in July 2003 in connection with the sale of 9% senior notes due 2010, consisting of the write-off of deferred financing costs and debt discounts related to debt retired. The charges related to the refinancing are more fully described in our Unaudited Pro Forma Consolidated Financial Information.

        Net loss attributable to common stockholders for the three months ended September 30, 2003 was $2.1 million, compared to our predecessor's net income of $7.7 million for the three months ended September 30, 2002. Basic and diluted net loss per common share was $0.38 for the three months ended September 30, 2003. Basic and diluted net loss per common share do not give effect to the offering or the conversion of our Class A Preferred Stock.

        The financial information presented above for the quarters ended September 30, 2003 and September 30, 2002 is unaudited. The unaudited financial information reflects all adjustments (consisting of normal recurring adjustments) which are, in the opinion of management, necessary for a fair presentation of such information. The results of operations for the quarter ended September 30, 2003 are not necessarily indicative of the results to be expected for the entire fiscal year.

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        The following reconciles revenues and income from operations, as reported, to revenues and income from operations, as adjusted (dollars in millions):

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RISK FACTORS

        Investing in our common stock involves risk. Before making an investment in our common stock, you should carefully consider the following risks, as well as the other information contained in this prospectus, including our consolidated financial statements and the related notes and "Management's Discussion and Analysis of Financial Condition and Results of Operations." Additional risks and uncertainties not currently known to us, or risks that we currently deem immaterial, may also impair our business operations. Any of the risk factors described below could significantly and adversely affect our business and results of operations. As a result, the trading price of our common stock could decline and you may lose all or part of your investment.

Risks Related to Our Business

    We depend on contracts with U.S. government agencies for substantially all of our revenues. If our relationships with these agencies were harmed, our business would be adversely affected.

        Contracts funded by U.S. government agencies accounted for approximately 98% of our pro forma revenues for the year ended December 31, 2002, and approximately 99% of our revenues for the six months ended June 30, 2003. We believe that federal government contracts will continue to be the source of substantially all of our revenues for the foreseeable future. For this reason, any issue that compromises our relationship with agencies of the federal government in general, or with the Department of Defense in particular, would cause serious harm to our business. Among the key factors in maintaining our relationships with federal government agencies and departments are our performance on individual contracts and delivery orders, the strength of our professional reputation, and the relationships of our key executives with client personnel. To the extent that our performance does not meet client expectations, or our reputation or relationships with one or more key clients are impaired, our revenues and operating results could be materially harmed.

    Our acquisition of DGS may have adverse consequences on our business and our limited management history may make it difficult to evaluate our business and our future prospects.

        We commenced operations in September 2001 and did not have any material operations until our acquisition of Getronics Government Solutions, L.L.C. (now DigitalNet Government Solutions, LLC) in November 2002. Your evaluation of our business and prospects will be difficult because of our limited management history of DGS. Our historical financial and operational data are not necessarily indicative of results to be expected for any future period. Companies such as DGS that have experienced a change of control frequently encounter risks, expenses, and difficulties, including adverse effects on existing business relationships with suppliers and clients and the loss of key employees.

        We have already experienced some of these challenges. For example, in connection with the replacement of the former President and Chief Executive Officer of DGS following the acquisition, we are obligated to make additional cash payments related to a severance agreement. We may experience additional challenges that make it difficult to successfully operate the business that we acquired from DGS. If we fail to manage our business effectively, we could experience disruptions to our business and loss of revenues.

    Prior to our acquisition of DGS, our predecessor lost its largest contract, and another one of our largest contracts will end at the end of 2003. Both of these events will make us a smaller company than as presented in our historical financial statements.

        Our predecessor's INS/FOS contract ended on November 30, 2002. On a pro forma basis, this contract accounted for approximately 16% of our revenues and approximately 21% of our gross margin contribution for the year ended December 31, 2002 and represented our largest contract on a revenue and total profit basis. We had no revenues from this contract for the six months ended June 30, 2003. We do not currently expect the revenues from this contract to be replaced in 2003 or in the foreseeable future.

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        Our work for NASA, through a subcontract relationship with Lockheed Martin Corporation on the CSOC contract, will end in December 2003, subject to Lockheed Martin's option to purchase additional labor from us through December 31, 2004 to facilitate the transition to the replacement or follow-on contract. This contract represented approximately 13% and 14% of our revenues for the year ended December 31, 2002 on a pro forma basis and the six months ended June 30, 2003, respectively. This contract produced no gross margin for both the year ended December 31, 2002 on a pro forma basis and the six months ended June 30, 2003. We do not currently expect the revenues from this contract to be replaced in 2004 or in the foreseeable future.

        Both of these events will make us a smaller company than as presented in our historical financial statements. If other important contracts are terminated or not renewed, our financial performance could be further adversely affected.

    We may not receive the full amount of our backlog, which could harm our business.

        Our total backlog includes both funded and unfunded orders for services under existing signed contracts, assuming the exercise of all options relating to those contracts that we reasonably believe will be exercised. Congress often appropriates funds for our clients on a yearly basis, even though their contracts with us may call for performance that is expected to take a number of years. As a result, contracts typically are only partially funded at any point during their term, and all or some of the work to be performed under the contracts may remain unfunded unless and until Congress makes subsequent appropriations and the procuring agency allocates funding to the contract.

        Our backlog was approximately $743 million as of June 30, 2003, of which approximately $119 million was funded. Excluding our INS/FOS and NASA CSOC contracts from backlog, our backlog was approximately $720 million as of June 30, 2003, of which approximately $96 million was funded. As of June 30, 2003, we expected to recognize revenues from approximately 18% of our total backlog during the remaining six months of the year ended December 31, 2003. Our backlog includes orders under contracts that in some cases extend for several years, with the latest expiring at the end of calendar year 2015.

        There can be no assurance that our backlog will result in actual revenues in any particular period, or at all, or that any contract included in backlog will be profitable. This is because the actual receipt and timing of any of these revenues is subject to various contingencies, many of which are beyond our control. In addition, we may never realize revenues from some of the engagements that are included in our backlog, and there is a higher degree of risk in this regard with respect to unfunded backlog. The federal government's ability to select multiple winners under multiple award schedule contracts, government-wide acquisition contracts, blanket purchase agreements and other indefinite delivery/indefinite quantity, or IDIQ, contracts, as well as its right to award subsequent task orders among such multiple winners, means that there is no assurance that unfunded contract backlog will result in actual orders. The actual receipt of revenues on engagements included in backlog may never occur or may change because a program schedule could change or the program could be canceled, or a contract could be reduced, modified, or terminated early. Moreover, under multiple award schedule contracts, government wide acquisition contracts, blanket purchase agreements, and other IDIQ contracts, the government is frequently not obligated to order more than a minimum quantity of goods or services.

        For example, our backlog as of December 31, 2001 included $10.9 million for a contract with a Department of Defense client that we believed at the time would continue through 2005. The contract was not renewed during 2002, and we only realized $1.1 million in pro forma revenue in 2002. This resulted in a $9.8 million reduction of our backlog during 2002 without a corresponding increase in revenue.

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    Loss of our prime contractor position on one or more of our contracts would impair our operating results and our ability to win new business.

        We believe many of our clients have recently shown a preference for procuring services and solutions from only a limited number of contracts or schedules. If we were to lose our prime contractor position on any of our contracts, we could lose revenues and our ability to win new business and our operating results could be adversely affected.

    Most of our sales are made under contracts with limited initial terms. We may expend significant resources in connection with these contracts that we may not recover if our clients do not exercise their contract options.

        Our contracts typically have a one- or two-year initial term, with multiple options that are exercisable by our government clients to extend the contract for one or more years. For example, the initial term under our managed network services contract that we signed with the Federal Technology Service office of the GSA, or FTS, during 2002, was a one-year contract, with four subsequent one-year options. We cannot assure you that FTS will exercise any of their options on this contract, nor can we assure you that any of our other clients will exercise options under their contracts. Moreover, because we believe that our contracts with limited initial terms represent the early portion of longer client programs, we expend significant financial and personnel resources and expand our operations to be able to fulfill these programs beyond the initial contract term. If a significant number of our contracts are not extended beyond their initial terms, we may be unable to recover the costs we incurred, we would not recognize anticipated revenues, and our operating results would be harmed.

    The loss of key members of our senior management team could impair our relationships with government clients and disrupt the management of our business.

        We believe that our success depends on the continued contributions of the members of our senior management, including Ken S. Bajaj, our co-founder, Chairman, and Chief Executive Officer. We rely on our executive officers and senior management to generate business and ensure successful performance of our contracts. The loss of the services of Mr. Bajaj or one or more of our other executive officers or senior management members could have a material adverse effect on our financial performance and our ability to compete. In addition, the relationships and reputation that many members of our senior management team have established and maintain with government personnel contribute to our ability to maintain good client relations and to identify new business opportunities. Although we have employment agreements with several members of our senior management, none of these contracts provide for a specific term of employment. The loss of any member of our senior management could impair our ability to identify and secure new contracts, to maintain good client relations, and to otherwise manage our business.

    If we fail to attract and retain skilled employees, we might not be able to perform under our contracts, and we may lose revenues.

        The growth of our business and revenues depends in large part upon our ability to attract and retain sufficient numbers of highly qualified individuals who have advanced information technology and technical services skills and who work well with our government and defense clients. For example, networking engineers and security experts are in great demand throughout our industry and are likely to remain a limited resource in the foreseeable future. If we are unable to recruit and retain a sufficient number of these employees, our ability to maintain and grow our business could be limited. If we encounter a tight labor market, as our predecessor did in the first half of the year ended December 31, 2000, we could be required to engage larger numbers of subcontractor personnel, which could cause our profit margins to suffer. In addition, some of our contracts contain provisions requiring us to staff an engagement with personnel that the client considers key to our successful performance under the contract. In the event we are unable to provide these

12

key personnel or acceptable substitutions, the client may terminate the contract, we may not be able to recover our costs, and we may lose revenues.

    We face intense competition from many competitors that have greater resources than we do, which could result in price reductions, reduced profitability, and loss of market share.

        We operate in highly competitive markets and generally encounter intense competition to win contracts. For example, we must often discount our GSA schedule rates in order to secure contracts from many of our customers in competitive situations. We expect competition in our markets to increase as a result of a number of factors, including the entrance of new or larger competitors, including those formed through consolidation, who have greater financial, technical, marketing, and public relations resources, larger client bases, and greater brand or name recognition than we do. These competitors could, among other things:

•

divert sales from us by winning very large-scale government contracts due to different or greater technical capabilities, past performance on large-scale contracts, geographic presence, price, and the availability of key professional personnel, a risk that is enhanced by the recent trend in government procurement practices to bundle services into larger contracts;



•

force us to charge lower prices; and



•

adversely affect our relationships.

If we lose business to our competitors or are forced to lower our prices, our revenues, and our operating profits could decline.

        In addition, we may face competition from our subcontractors who, from time to time, seek to obtain prime contractor status on contracts for which they currently serve as a subcontractor for us. If one or more of our current subcontractors are awarded prime contractor status on such contracts in the future, it would divert sales from us and could force us to charge lower prices.

    If we are not successful in developing, or if we are delayed in introducing, new and enhanced solutions and features that keep pace with technology and our clients' needs and expectations, our sales and competitive position will suffer.

        The market for our solutions is characterized by rapidly changing technologies, frequent new product introductions, increasingly complex network environments, and evolving client requirements and industry standards. In order to remain competitive, we will need to introduce on a timely basis new solutions or product enhancements that offer significantly improved performance and features. We could damage our reputation and competitive position and experience reduced revenues if:

•

we are not able to develop new solutions;



•

we are delayed in introducing new or enhanced solutions, such as planned enhancements to our High Assurance Web Guard, High Assurance Web Server, and High Assurance Directory Server Solutions;



•

any manufacturer or supplier of equipment limits or eliminates our ability to apply TEMPEST and Zone solutions to its products and we are not able to find alternative equipment sources in a timely manner; or



•

we introduce new solutions which do not meet the evolving demands of our clients.

    We derive significant revenues from contracts awarded through a competitive procurement process, which can impose substantial costs upon us, and negatively impact our operating results.

        We derive significant revenues from federal government contracts that are awarded through a competitive procurement process. We expect that most of the government business we seek in the foreseeable future will

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be awarded through competitive procedures. Competitive procurements impose substantial costs and present a number of risks, including:

•

the substantial cost and managerial time and effort that we spend to prepare bids and proposals for contracts that may not be awarded to us; and



•

the expense and delay that we may face if our competitors protest or challenge contract awards made to us pursuant to competitive procedures, and the risk that any such protest or challenge could result in the resubmission of offers, or in termination, reduction, or modification of the awarded contract.

        The costs we incur in the competitive procurement process may be substantial and, to the extent we participate in competitive procurements and are unable to win particular contracts, these costs could negatively affect our operating results. In addition, GSA multiple award schedule contracts, government-wide acquisitions contracts, blanket purchase agreements, and other IDIQ contracts do not guarantee more than a minimal amount of work for us, but instead provide us access to work generally through further competitive procedures. This competitive process may result in increased competition and pricing pressure, requiring that we make sustained post-award efforts to realize revenues under the relevant contract.

    We may lose money on some contracts if we miscalculate the resources we need to perform under the contract.

        We provide services to the federal government under three basic types of contracts: time-and-materials, fixed-price, and cost-plus. For the year ended December 31, 2002, we derived 49%, 41%, and 10% of our pro forma revenues from time-and-materials, fixed-price, and cost-plus contracts, respectively. For the six months ended June 30, 2003, we derived 43%, 47% and 10% of our revenues from time-and-materials, fixed-price and cost-plus contracts, respectively. Each of these types of contracts, to differing degrees, involves the risk that we could underestimate our cost of fulfilling the contract, which may reduce the profit we earn or lead to a financial loss on the contract.

        For all three basic contract types, we bear varying degrees of risk associated with the assumptions we use to formulate our pricing for the work. To the extent our working assumptions prove inaccurate, we may lose money on the contract, which would adversely affect our operating results. For example, we miscalculated the costs we would incur to provide telecommunications circuits in connection with our NASA CSOC contract and, as a result, the total costs to perform under the contract exceeded the contract's fixed fee revenue.

    Failure to maintain strong relationships with other contractors could result in a decline in our revenues.

        We estimate that revenues derived from contracts in which we acted as a subcontractor to other companies represented 31% of our pro forma revenues for the year ended December 31, 2002 and 31% of our revenues for the six months ended June 30, 2003. We expect to continue to depend on relationships with other contractors for a portion of our revenues in the foreseeable future. The reduction or elimination of any of our subcontractor relationships could adversely affect our business and prospects. For example, in connection with our NASA CSOC contract, we were recently involved in litigation with Lockheed Martin Space Operations Company regarding disputed charges under the contract. Although this litigation has been settled, it could adversely affect our ability to team with Lockheed Martin Space Operations Company in the future.

    If our subcontractors fail to perform their contractual obligations, our performance and reputation as a prime contractor and our ability to obtain future business could suffer.

        As a prime contractor, we often rely significantly upon other companies as subcontractors to perform work we are obligated to perform for our clients. We estimate that revenues derived from work performed by our subcontractors represented 16% of our total pro forma revenues for the year ended December 31, 2002

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and 19% of our revenues for the six months ended June 30, 2003. Excluding our NASA CSOC contract, we estimate that revenues derived from work performed by our subcontractors represented approximately 4% of our total pro forma revenues for the year ended December 31, 2002 and 7% of our total revenues for the six months ended June 30, 2003. If one or more of our subcontractors fail to perform satisfactorily the agreed-upon services on a timely basis, or violate government contracting policies, laws, or regulations, our ability to perform our obligations or meet our clients' expectations as a prime contractor may be compromised. In some cases, we have limited involvement in the work performed by the subcontractors but are nevertheless responsible for the work performed. In extreme cases, performance or other deficiencies on the part of our subcontractors could result in a client terminating our contract for default. A default termination could expose us to liability for the agency's costs of reprocurement, damage our reputation, and hurt our ability to compete for future contracts.

    Unfavorable government audit results could subject us to a variety of penalties and sanctions, and could harm our reputation and relationships with our clients.

        The federal government audits and reviews our performance on contracts, pricing practices, cost structure, and compliance with applicable laws, regulations, and standards. Like most large government contractors, our contracts are audited and reviewed on a continual basis by federal agencies, including the Defense Contract Audit Agency, or the DCAA. An unfavorable audit of us or our subcontractors could have a substantial adverse effect on our operating results. For example, any costs which were originally reimbursed could subsequently be disallowed. In this case, cash we have already collected may need to be refunded and future operating margins may be reduced.

        Our incurred cost submissions have been audited by the DCAA through December 31, 2002. Costs for which we were reimbursed after January 1, 2003 may be subsequently disallowed upon the completion of future audits. In addition, non-audit review by the U.S. government may still be conducted on all of our government contracts.

        If a government audit uncovers improper or illegal activities, we may be subject to civil and criminal penalties and administrative sanctions, including termination of contracts, forfeiture of profits, suspension of payments, fines, and suspension or debarment from doing business with U.S. government agencies. In addition, we could suffer serious harm to our reputation if allegations of impropriety were made against us, whether or not true.

    The DCAA has alleged deficiencies in our written policies and procedures, which could subject us to penalties and sanctions.

        In July 2002, we received a report from the DCAA that alleged deficiencies in our written policies and procedures relating to our billing system. We formally responded to this report, and the DCAA re-examined our billing system as of August 25, 2003 and found it to be adequate.

        We received an additional report from the DCAA in March 2003 that alleged deficiencies in our written policies and procedures relating to our system designed to ensure that direct and indirect costs are properly classified, charged or allocated to cost objectives in accordance with applicable laws and regulations, including the Federal Acquisition Regulations and government Cost Accounting Standards. We have formally responded to this DCAA report and believe that we have satisfactorily resolved these issues through further documentation of our policies and procedures. Until the DCAA reevaluates our policies and procedures during its next audit of our system designed to ensure that direct and indirect costs are properly classified, charged or allocated to cost objectives in accordance with applicable laws and regulations, we will not know whether our efforts to correct these alleged deficiencies are adequate. However, we believe these alleged deficiencies will be resolved without any material adverse consequences to our business. We also cannot assure you that similar issues will not arise in the future.

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        If the DCAA finds that our efforts to correct the alleged deficiencies are not adequate, we may be subject to penalties and sanctions, including the suspension of contract payments and preclusion from bidding on future contracts with U.S. government agencies until these deficiencies are corrected.

    If we experience systems or services failures, our reputation could be harmed and our clients could assert claims against us for damages or refunds.

        We create, implement, and maintain information technology solutions that are often critical to our clients' operations, some of which involve U.S. government-classified or other sensitive information and work. We have experienced and may in the future experience some systems or services failures, schedule or delivery delays, and other problems in connection with our work. If our solutions, services, or other applications have significant defects or errors, are subject to delivery delays, or fail to meet our clients' expectations, we may:

•

lose revenues due to adverse client reactions;



•

be required to provide additional services to clients at no charge;



•

receive negative publicity, which could damage our reputation and adversely affect our ability to attract or retain clients; or



•

suffer claims for substantial damages.

        Many, although not all, of our contracts limit our liability for consequential damages that may arise from negligence in rendering services to our clients. We cannot assure you, however, that these contractual provisions will be legally sufficient to protect us if we are sued. In addition, our errors and omissions and product liability insurance coverage may not continue to be available on reasonable terms or in sufficient amounts to cover one or more large claims, or the insurer may disclaim coverage as to some types of claims. The successful assertion of any large claims against us could seriously harm our business. Even if not successful, these claims could result in significant legal and other costs, may be a distraction to our management, and may harm our reputation.

    Security breaches in sensitive government systems could result in the loss of clients and negative publicity.

        Many of the systems we develop, install, and maintain involve managing and protecting information involved in intelligence, national security, and other sensitive or classified government functions. A security breach in one of these systems could cause serious harm to our business, damage our reputation, and prevent us from being eligible for further work on sensitive or classified systems for federal 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 systems we develop, install, and maintain could materially reduce our revenues.

    Our failure to obtain and maintain necessary security clearances may limit our ability to perform classified work for government clients, which could cause us to lose business.

        Some government contracts require us to maintain facility security clearances, and require some of our employees to maintain individual security clearances. If our employees lose or are unable to timely obtain security clearances, or we lose a facility clearance, the government client can terminate the contract or decide not to renew it upon its expiration. As a result, to the extent we cannot obtain or maintain the required security clearances for a particular contract, or we fail to obtain them on a timely basis, we may not derive the revenues anticipated from the contract, which, if not replaced with revenues from other contracts, could harm our operating results. To the extent we are not able to obtain facility security clearances or engage employees with the required security clearances for a particular contract, we will be unable to perform that contract and we may not be able to compete for or win new contracts for similar work.

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    Our quarterly operating results may fluctuate significantly as a result of factors outside of our control, which could cause the market price of our common stock to decline.

        We expect our revenues and operating results to vary from quarter to quarter. As a consequence, our operating results may fall below the expectations of securities analysts and investors, which could cause the price of our common stock to decline. Factors that may affect our operating results include those listed in this "Risk Factors" section of this prospectus and others such as:

•

fluctuations in revenues earned on contracts;



•

variability in demand for our services and solutions;



•

seasonal fluctuations in our staff utilization rates;



•

seasonal fluctuations in our information security solutions sales;



•

commencement, completion, or termination of contracts during any particular quarter;



•

variable purchasing patterns under GSA schedule contracts, government-wide acquisition contracts, blanket purchase agreements, and other IDIQ contracts;



•

delays in commencement of contracts during any particular quarter;



•

changes in contract requirements;



•

strategic decisions by us or our competitors, such as acquisitions, divestitures, spin-offs, joint ventures, strategic investments, or changes in business strategy;



•

changes in the extent to which we use subcontractors; and



•

changes in presidential administrations and senior federal government officials that affect the timing of technology procurement.

        Reductions in revenues in a particular quarter could lead to lower profitability in that quarter because a relatively large amount of our expenses are fixed in the short-term. We may incur significant operating expenses during the start-up and early stages of large contracts and may not receive corresponding payments in that same quarter. We may also incur additional expenses when contracts expire or are terminated or are not renewed. In addition, payments due to us from government agencies may be delayed due to billing cycles or as a result of failures of governmental budgets to gain Congressional and administration approval in a timely manner.

    We depend on our intellectual property and our failure or inability to protect it could enable competitors to market services and solutions with similar features that may reduce demand for our services and solutions.

        Our success and competitiveness are dependent to a significant degree upon the protection of our internally developed technology, proprietary processes, and other intellectual property that we utilize to provide our services and incorporate in our solutions. If we are unable to protect our intellectual property, our competitors could market services or solutions similar to our services and solutions, which could reduce demand for our offerings.

        Federal government clients typically retain a perpetual, world-wide, royalty-free license to use the intellectual property we develop for them, including providing it to our competitors in connection with their performance of other federal government contracts. Federal government clients typically grant contractors the right to use and commercialize software developed with federal funding. However, if we were to improperly use intellectual property even partially funded by the federal government, the federal government could seek damages from us, sanction us, or prevent us from working on future government contracts.

17

        We may be unable to prevent unauthorized parties from attempting to copy or otherwise obtain and use our technology. Policing unauthorized use of our technology is difficult, and we may not be able to prevent misappropriation of our technology, particularly in foreign countries where the laws may not protect our intellectual property as fully as those in the U.S. Others, including our employees, may circumvent the protections provided by trade secrets and other intellectual property that we own. Although we require our new employees to execute non-disclosure and intellectual property assignment agreements, many of our employees hired by our predecessor have not executed such agreements. In addition, these agreements may not be legally or practically sufficient to protect our rights. Litigation may be necessary to enforce our intellectual property rights, to protect our trade secrets and to determine the validity and scope of the proprietary rights of others. Any litigation could result in substantial costs and diversion of resources, with no assurance of success. If we are unable to protect our proprietary rights against unauthorized use by others, our reputation may be damaged and our competitive position may be significantly harmed.

    We may be harmed by intellectual property infringement claims.

        We may become subject to claims from our employees or third parties who assert that software and other forms of intellectual property that we use in delivering services and solutions to our clients infringe upon intellectual property rights of such employees or third parties. Our employees develop much of the software and other forms of intellectual property that we use to provide our services and solutions to our clients, but we also license technology from other vendors. If our vendors, our employees, or third parties assert claims that we or our clients are infringing on their intellectual property, we could incur substantial costs to defend those claims. In addition, if any of these infringement claims are ultimately successful, in addition to paying damages, we could be required to do the following, each of which could entail incurring a significant expense or result in a significant reduction in revenues:

•

cease selling or using services or solutions that incorporate the challenged software or technology;



•

obtain a license or additional licenses from our vendors or other third parties; or



•

redesign our services and solutions that rely on the challenged software or technology.

        In addition, we do not own a federal trademark registration for the DigitalNet service mark or trademark. If a third party challenges our right to use our name, we may be prevented from using the name or may be subject to other remedies sought by any such party. If a third party is successful in challenging the use of the DigitalNet name, in addition to paying damages, we could be required to change our corporate name, which could:

•

cause us to incur significant expense;



•

adversely affect our brand recognition; and



•

adversely affect our development of goodwill.

    If we make strategic acquisitions or investments, we could assume additional liabilities or have integration problems.

        One of our strategies is to pursue growth through acquisitions. While we do not currently have any commitments, agreements, or understandings to acquire any specific businesses or other material operations, we expect to consider acquisitions in the future. If we make an acquisition or investment, we may:

•

issue stock that would dilute your stock ownership;



•

incur debt that would restrict our cash flow;



•

assume liabilities;



•

incur large and immediate write-offs;

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•

experience problems combining the purchased operations, technologies or products with our business;



•

incur unanticipated costs;



•

divert management's attention from our core business;



•

experience risks associated with entering markets in which we have no or limited prior experience; and



•

lose key employees from the purchased organizations.

Risks Related to Our Industry

    Changes in the spending policies or budget priorities of the federal government could cause us to lose revenues.

        We derive substantially all of our revenues from contracts funded by federal government agencies. For the year ended December 31, 2002, on a pro forma basis, civilian agency clients accounted for approximately 62% of our revenues, Department of Defense clients accounted for approximately 28% of our revenues, and national security and intelligence agency clients accounted for approximately 8% of our revenues. For the six months ended June 30, 2003, civilian clients accounted for approximately 51% of our revenues, Department of Defense clients accounted for approximately 34% of our revenues, and national security and intelligence agency clients accounted for approximately 14% of our revenues. Excluding the INS/FOS and NASA CSOC contracts, for the year ended December 31, 2002, on a pro forma basis, civilian agency clients accounted for approximately 47% of our revenues, Department of Defense clients accounted for approximately 39% of our revenues, and national security and intelligence clients accounted for approximately 11% of our revenues. Excluding the INS/FOS and NASA CSOC contracts, for the six months ended June 30, 2003, civilian clients accounted for approximately 43% of our revenues, Department of Defense clients accounted for approximately 39% of our revenues, and national security and intelligence agency clients accounted for approximately 17% of our revenues. We believe that contracts with federal government agencies, and defense agencies in particular, will continue to be the primary source of our revenues for the foreseeable future. Accordingly, changes in federal government fiscal or spending policies or the U.S. defense budget could directly affect our financial performance. For example, the reduction in the U.S. defense budget during the early 1990s caused some defense-related government contractors to experience decreased sales, reduced operating margins and, in some cases, net losses. Among the factors that could harm our business are:

•

curtailment of the federal government's use of technology services firms;



•

a significant decline in spending by the federal government, in general, or by specific agencies such as the Department of Defense;



•

reductions in federal government programs or requirements;



•

a shift in spending to federal programs and agencies that we do not support or where we currently do not have contracts;



•

delays in the payment of our invoices by government payment offices;



•

federal governmental shutdowns, such as the shutdown that occurred during the government's 1996 fiscal year, and other potential delays in the government appropriations process; and



•

general economic and political conditions, including any event that results in a change in spending priorities of the federal government.

        These or other factors could cause federal government agencies and departments to reduce their purchases under contracts, to exercise their right to terminate contracts, or not to exercise options to renew contracts, any of which could cause us to lose revenues. In addition, any limitations imposed on spending by U.S. government agencies that result from efforts to reduce the federal deficit may limit both the continued funding of our existing contracts and our ability to obtain additional contracts. Our backlog consists almost

19

exclusively of contracts with federal departments and agencies, and the continuation of these contracts, or award of additional contracts from these agencies, could be materially harmed by federal government spending reductions or budget cutbacks at these departments or agencies.

    Federal government contracts contain provisions giving government clients a variety of rights that are unfavorable to us, including the ability to terminate a contract at any time for convenience.

        Federal government contracts contain provisions and are subject to laws and regulations that provide government clients with rights and remedies not typically found in commercial contracts. These rights and remedies allow government clients, among other things, to:

•

terminate existing contracts, with short notice, for convenience, as well as for default;



•

reduce orders under or otherwise modify contracts;



•

for larger contracts subject to the Truth in Negotiations Act, reduce the contract price or cost where it was increased because a contractor or subcontractor during negotiations furnished cost or pricing data that was not complete, accurate, and current;



•

for GSA multiple award schedule contracts, government-wide acquisition agreements, and blanket purchase agreements, demand a refund, make a forward price adjustment, or terminate a contract for default if a contractor provided inaccurate or incomplete data during the contract negotiation process, or reduce the contract price under certain triggering circumstances, including the revision of pricelists or other documents upon which the contract award was predicated, the granting of more favorable discounts or terms and conditions than those contained in such documents, and the granting of certain special discounts to certain clients;



•

terminate our facility security clearances and thereby prevent us from receiving classified contracts;



•

cancel multi-year contracts and related orders if funds for contract performance for any subsequent year become unavailable;



•

decline to exercise an option to renew a multi-year contract or issue task orders in connection with IDIQ contracts;



•

claim rights in solutions, systems, and technology produced by us;



•

prohibit future procurement awards with a particular agency due to a finding of organizational conflict of interest based upon prior related work performed for the agency that would give a contractor an unfair advantage over competing contractors or the existence of conflicting roles that might bias a contractor's judgment;



•

subject the award of contracts to protest by competitors, which may require the contracting federal agency or department to suspend our performance pending the outcome of the protest and may also result in a requirement to resubmit offers for the contract or in the termination, reduction, or modification of the awarded contract; and



•

suspend or debar us from doing business with the federal government.

If a federal government client terminates one of our contracts for convenience, we may recover only our incurred or committed costs, settlement expenses, and profit on work completed prior to the termination. If a federal government client were to unexpectedly terminate, cancel, or decline to exercise an option to renew with respect to one or more of our significant contracts or suspend or debar us from doing business with the federal government, our revenues and operating results would be materially harmed.

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    Our failure to comply with complex procurement laws and regulations could cause us to lose business and subject us to a variety of penalties.

        We must comply with laws and regulations relating to the formation, administration, and performance of federal government contracts, which affect how we do business with our federal government clients and may impose added costs on our business. Among the most significant laws and regulations are:

•

the Federal Acquisition Regulation, and agency regulations analogous or supplemental to the Federal Acquisition Regulation, which comprehensively regulate the formation, administration, and performance of government contracts;



•

the Truth in Negotiations Act, which requires certification and disclosure of all cost or pricing data in connection with some contract negotiations;



•

the Cost Accounting Standards, which impose cost accounting requirements that govern our right to reimbursement under some cost-based government contracts; and



•

laws, regulations, and executive orders restricting the use and dissemination of information classified for national security purposes and the exportation of specified solutions and technical data.

        If a government review or investigation uncovers improper or illegal activities, we may be subject to civil and criminal penalties and administrative sanctions, including the termination of our contracts, the forfeiture of profits, the suspension of payments owed to us, fines, and our suspension or debarment from doing business with federal government agencies. In particular, the civil False Claims Act provides for treble damages and potentially substantial civil penalties where, for example, a contractor presents a false or fraudulent claim to the government for payment or approval, or makes a false statement in order to get a false or fraudulent claim paid or approved by the government. Actions under the civil False Claims Act may be brought by the government or by other persons on behalf of the government. These provisions of the civil False Claims Act permit parties, such as our employees, to sue us on behalf of the government and share a portion of any recovery. Any failure to comply with applicable laws and regulations could result in contract termination, price or fee reductions, or suspension or debarment from contracting with the government, each of which could lead to a material reduction in our revenues.

    The adoption of new procurement laws or regulations could reduce the amount of services that are outsourced by the federal government and cause us to experience reduced revenues.

        New legislation, procurement regulations, or labor organization pressure could cause federal agencies to adopt restrictive procurement practices regarding the use of outside information technology providers. The American Federation of Government Employees, the largest federal employee union, strongly endorses legislation that may restrict the procedure by which services are outsourced to government contractors. One such proposal, the Truthfulness, Responsibility, and Accountability in Contracting Act, or TRAC, would have effectively reduced the volume of services that is outsourced by the federal government by requiring agencies to give in-house government employees expanded opportunities to compete against contractors for work that could be outsourced. Although the TRAC legislation did not pass committee in either house of Congress last term, and it has not been reintroduced in the current term, if TRAC, or similar legislation, were to be enacted, it would likely reduce the amount of information technology services that could be outsourced by the federal government, which could materially reduce our revenues.

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Risks Related to Our Capital Structure

    We may not be able to generate adequate cash to service our $125.0 million of existing indebtedness and any additional future indebtedness, including approximately $5.2 million we intend to borrow under our credit facility in connection with the offering and the application of proceeds thereafter to redeem the 9% senior notes due 2010 and to purchase the Class B Preferred Stock.

        We have a significant amount of debt outstanding, including $125.0 million of outstanding indebtedness under the 9% senior notes due 2010. We expect to use the net proceeds from this offering to redeem approximately $43.8 million in aggregate principal amount of outstanding 9% senior notes due 2010 for approximately $47.7 million, or 109% of the aggregate principal amount of the notes being redeemed, plus accrued and unpaid interest from July 3, 2003, as described in "Use of Proceeds." After this redemption, we will have approximately $81.3 million of outstanding indebtedness under the 9% senior notes due 2010. In addition, we have up to $50.0 million of availability under our credit facility, a senior secured revolving credit facility that we obtained concurrently with the offering of the 9% senior notes due 2010. As described in "Use of Proceeds", we intend to borrow approximately $5.2 million under our credit facility in connection with the offering and the application of proceeds thereafter to redeem the 9% senior notes due 2010 and to purchase the Class B Preferred Stock. This amount assumes that the offering, the redemption of the 9% senior notes due 2010, the purchase of the Class B Preferred Stock and the borrowings under the current credit facility were completed as of June 30, 2003. You should be aware that this level of debt could have important consequences to you. Below we have identified some of the material potential consequences resulting from this significant amount of debt, assuming the application of proceeds from this offering as described in "Use of Proceeds":

•

on an annual basis, approximately $7.3 million of our cash flow from operations must be dedicated to the payment of interest under the 9% senior notes due 2010, thereby reducing the amount of cash we have available for other purposes, including reinvestment in the company;



•

we will be required to repay $81.3 million in respect of the 9% senior notes due 2010 when they mature in 2010;



•

to the extent we incur additional debt, we will need to dedicate additional cash flow from operations to the repayment and servicing of such debt;



•

we may be unable to obtain additional financing for working capital, capital expenditures, acquisitions and general corporate purposes;



•

our ability to adjust to changing market conditions may be hampered;



•

we may be at a competitive disadvantage compared to our less leveraged competitors; and



•

we may be vulnerable to the impact of adverse economic and industry conditions and, to the extent of our outstanding debt under our credit facility, the impact of increases in interest rates.

        Our ability to repay or refinance our debt, including the 9% senior notes due 2010, depends on our successful financial and operating performance and the availability of financing through our credit facility. We cannot assure you that our business strategy will succeed or that we will achieve our anticipated financial results. Our financial and operating performance depends upon a number of factors including those listed in this "Risk Factors" section of this prospectus, many of which are beyond our control. In addition, our ability to borrow funds in the future to make payments on our debt will depend on our satisfaction of the covenants and other conditions in our credit facility and other agreements we may enter into in the future.

        We cannot assure you that we will continue to generate sufficient cash flow from operations or that we will be able to borrow funds under our credit facility in amounts sufficient to enable us to service our debt, including the 9% senior notes due 2010, or meet our working capital and capital expenditure requirements. We must satisfy borrowing base restrictions in order to borrow additional amounts under our credit facility. If

22

we are not able to generate sufficient cash flow from operations or to borrow sufficient funds to service our debt, due to borrowing base restrictions or otherwise, we may be required to sell assets, reduce capital expenditures, refinance all or a portion of our existing debt, including the 9% senior notes due 2010, or obtain additional financing. We cannot assure you that we will be able to refinance our debt, sell assets or borrow more money on terms acceptable to us, if at all.

    Under our credit facility, we will be able to incur more indebtedness, which may intensify the risks associated with our substantial leverage, including our ability to service our indebtedness.

        We and our subsidiaries will be able to incur substantial additional indebtedness in the future, including up to the greater of (i) $60.0 million and (ii) specified percentages of our accounts receivable under our credit facility. Although our ability to incur additional debt will be restricted under the covenants contained in our credit facility and the indenture governing the 9% senior notes due 2010, these restrictions are subject to a number of qualifications and exceptions, and the indebtedness incurred in compliance with these restrictions could be substantial. To the extent new debt is added to our currently anticipated debt levels, the substantial leverage risks described above would increase. Also, these restrictions do not prevent us from incurring obligations that do not constitute indebtedness. As described in "Use of Proceeds", we intend to borrow $5.2 million under our credit facility in connection with the offering and the application of proceeds thereafter to redeem the 9% senior notes due 2010 and to purchase the Class B Preferred Stock. This amount assumes that the offering, the redemption of the 9% senior notes due 2010, the purchase of the Class B Preferred Stock and the borrowings under the current credit facility were completed as of June 30, 2003.

    Covenants in the financing agreements governing our debt, including the 9% senior notes due 2010 and our credit facility, may restrict our financial and operating flexibility and any event of default could cause acceleration of amounts outstanding under these agreements and have a material adverse effect on our business.

        Our financing agreements, including the 9% senior notes due 2010 and our credit facility, will contain covenants that limit or restrict our and our subsidiaries' operating and financial activities. Our credit facility contains customary affirmative and negative covenants, including financial covenants that we are required to meet, including a consolidated total leverage ratio; a consolidated fixed charge coverage ratio; and a minimum net worth covenant.

        Those covenants also restrict certain of our corporate activities, including, among other things, our ability to: make acquisitions, merge or consolidate with other entities, dispose of assets, incur additional indebtedness, pay dividends, create liens, make investments, make capital expenditures, and engage in certain transactions with affiliates. The credit agreement also contains customary events of default, including, among others, defaults based on certain bankruptcy and insolvency events; nonpayment; cross-defaults to other debt; breach of specified covenants; change of control and material inaccuracy of representations and warranties.

        The indenture governing the 9% senior notes due 2010 restricts, among other things, our ability to pay dividends on, or redeem or repurchase, our stock, incur additional debt or sell preferred stock, create liens, restrict dividend payments or other payments from subsidiaries to us, engage in consolidations and mergers or sell or transfer assets, make specified types of investments, apply net proceeds from certain asset sales, create unrestricted subsidiaries, and engage in transactions with our affiliates.

        Our ability to satisfy the covenants and other conditions in our credit facility can be affected by events beyond our control, and we cannot assure you that we will satisfy them. If we cannot comply with the financial covenants in our credit facility, we may not be able to borrow under this facility. In addition, failure to comply with any of the covenants in our existing or future financing agreements could result in a default under those agreements and under other agreements containing cross-default provisions. A default would permit the lenders under the applicable agreement to declare amounts outstanding under such agreements to be due and, in the case of our credit facility, the lenders could proceed against the assets that are pledged. We

23

have pledged substantially all of our assets, including the stock of our subsidiaries, to secure the debt under our credit facility. If our creditors decide to exercise their rights, we cannot assure you that our assets would be sufficient to pay that debt and other debt, including the 9% senior notes due 2010.

        In addition, in the event of a default, the lenders under our credit facility will, and any future lenders may, be able to terminate any commitments they made to supply us with further funds. Under these circumstances, we might not have sufficient funds or other resources to satisfy all of our obligations, including our obligations under the 9% senior notes due 2010. In addition, the limitations imposed by our financing agreements on our ability to incur additional debt and to take other actions might significantly impair our ability to obtain other financing. We cannot assure you that we will be able to obtain waivers or amendments of our financing agreements, if necessary, at acceptable terms or at all. Any event of default could have a material adverse effect on our business.

    We may not be able to finance a change of control offer as required by the indenture governing the 9% senior notes due 2010, which would result in defaults under the indenture governing the 9% senior notes due 2010 and our credit facility and may require us to repay any debt then outstanding under our credit facility. Any event of default could have a material adverse effect on our business.

        Upon a change of control under the indenture governing the 9% senior notes due 2010, we will be required to offer to repurchase all of the 9% senior notes due 2010 then outstanding at 101% of the principal amount, plus accrued and unpaid interest and liquidated damages, if any, to the repurchase date. Prior to repurchasing any of the 9% senior notes due 2010, we must either repay all debt under our our credit facility or obtain the required consents from the applicable lenders to allow us to repurchase the 9% senior notes due 2010. In such circumstances, we cannot assure you that we would have the financial resources available to repay our credit facility and any other debt that would become payable upon a change of control and to repurchase all of the 9% senior notes due 2010 at the required premium. Our failure to do so would constitute an event of default under the indenture and, accordingly, under our credit facility. Any event of default could have a material adverse effect on our business.

    If we do not timely complete the exchange offer, we will be required to pay additional interest on the 9% senior notes due 2010, which would have a negative effect on our results of operations.

        We are in the process of conducting an exchange offer to satisfy obligations contained in the registration rights agreement we entered into in connection with the private placement of the 9% senior notes due 2010. If we are unable to timely complete the exchange offer, the registration rights agreement requires us to pay additional interest on the 9% senior notes due 2010, up to a maximum increase of $0.385 additional interest per week per $1,000 principal amount of the 9% senior notes due 2010. Any increase in the interest rate would have a negative effect on our results of operations.

Risks Related to This Offering

    We expect that none of the proceeds of this offering will be available for general corporate purposes.

        As described in "Use of Proceeds," the primary use of the proceeds of this offering is to redeem approximately $43.8 million in aggregate principal amount of outstanding 9% senior notes due 2010 for approximately $47.7 million, or 109% of the aggregate principal amount of the notes being redeemed, plus accrued and unpaid interest from July 3, 2003. We also intend to use the remaining proceeds of this offering along with $5.2 million of borrowings under our credit facility to exercise our right of first refusal to purchase the outstanding shares of our Class B Preferred Stock for $27.0 million as described in "Use of Proceeds." This amount assumes that the offering, the redemption of the 9% senior notes due 2010, the purchase of the Class B Preferred Stock and the borrowing were completed as of June 30, 2003. As a result, none of the proceeds of this offering will be available for general corporate purposes.

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    There is no prior public market for our common stock, and our stock price could be volatile and could decline following this offering, resulting in a substantial loss on your investment.

        Prior to this offering, there has not been a public market for our common stock. An active trading market for our common stock may never develop or be sustained, which could affect your ability to sell your shares and could depress the market price of your shares. In addition, the initial public offering price has been determined through negotiations between us and the representatives of the underwriters and may bear no relationship to the price at which the common stock will trade upon completion of this offering. The stock market in general, and the market for technology-related stocks in particular, has been highly volatile. As a result, the market price of our common stock is likely to be similarly volatile, and investors in our common stock may experience a decrease in the value of their stock, including decreases unrelated to our operating performance or prospects. The price of our common stock could be subject to wide fluctuations in response to a number of factors, including those listed in this "Risk Factors" section of this prospectus and others such as:

•

our operating performance and the performance of other similar companies;



•

changes in our revenues or earnings estimates or recommendations by securities analysts;



•

publication of research reports about us or our industry by securities analysts;



•

speculation in the press or investment community;



•

terrorist acts; and



•

general market conditions, including economic factors unrelated to our performance.

        In the past, securities class action litigation has often been instituted against companies following periods of volatility in their stock price. This type of litigation against us could result in substantial costs and divert our management's attention and resources.

    The significant concentration of ownership of our common stock will limit your ability to influence corporate activities.

        Immediately following this offering, our executive officers, directors, and their affiliates, including GTCR Golder Rauner, L.L.C. and its affiliates ("GTCR") including GTCR Fund VII, L.P. and GTCR Co-Invest, L.P., will together own approximately 66% of our outstanding common stock, and GTCR will own approximately 53% of our outstanding common stock, assuming an initial public offering price of $15.00 per share, the mid-point of the range shown on the cover page of this prospectus. As a result, those stockholders, if they act together, or GTCR acting alone, will be able to determine the outcome of any matter requiring stockholder approval, including the election of directors, amendments to our certificate of incorporation, and mergers or other business combinations. This concentration of ownership may also have the effect of delaying, preventing or deterring a change in control of our company, which could deprive our stockholders of an opportunity to receive a premium for their common stock as part of a sale of our company and might adversely affect the market price of our common stock.

    Some provisions of our certificate of incorporation and bylaws may delay or prevent transactions that many stockholders may favor.

        Some provisions of our certificate of incorporation and bylaws may have the effect of delaying, discouraging, or preventing a merger or acquisition that our stockholders may consider favorable, including transactions in which stockholders might receive a premium for their shares. These provisions include:

•

authorization of the issuance of "blank check" preferred stock without the need for action by stockholders;

25

•

the removal of directors only by the affirmative vote of the holders of two-thirds of the shares of our capital stock entitled to vote;



•

any vacancy on the board of directors, however occurring, including a vacancy resulting from an enlargement of the board, may only be filled by vote of the directors then in office;



•

inability of stockholders to call special meetings of stockholders; and



•

advance notice requirements for board nominations and proposing matters to be acted on by stockholders at stockholder meetings.

        Some provisions of Delaware law may also discourage, delay or prevent someone from acquiring us or merging with us. See "Description of Capital Stock—Delaware Law and Certain Charter and Bylaw Provisions; Anti-Takeover Effects" for more detailed information on these provisions.

    A substantial number of shares will be eligible for sale in the near future, which could cause our common stock price to decline significantly.

        Additional sales of our common stock in the public market after this offering, or the perception that such sales could occur, could cause the market price of our common stock to decline. Upon completion of this offering, we will have 15,972,346 shares of common stock outstanding, assuming no exercise of the underwriters' over-allotment option and no exercise of outstanding options or warrants. See "Summary—The Offering" for a detailed discussion of shares included and excluded from this number. The 5,000,000 shares to be sold in this offering will be freely tradable without restriction or further registration under the Securities Act of 1933, as amended. All of our existing stockholders will be subject to agreements with the underwriters that restrict their ability to transfer their stock for a period of 180 days from the date of this prospectus. For a detailed description of these agreements, see "Underwriting." After the lock-up agreements expire, an aggregate of 10,972,346 additional shares will be eligible for sale in the public market, subject in most cases to the limitations of either Rule 144 or Rule 701. For a detailed discussion of the shares eligible for future sale, see "Shares Eligible for Future Sale."

        In addition, Citigroup and UBS Securities LLC, on behalf of the underwriters, may in their sole discretion, at any time without notice, release all or any portion of the shares subject to the lock-up agreements, which would result in more shares being available for sale in the public market at an earlier date. Sales of common stock by existing stockholders in the public market, the availability of these shares for sale, or our issuance of securities, could materially and adversely affect the market price of our common stock.

        Under the terms of employment agreements between us and several of our executive officers and employees, we have agreed to use commercially reasonable efforts to file a Form S-8/S-3 registration statement to permit the resale of 2,139,209 shares of our common stock purchased pursuant to their employment agreements.

        In addition, as soon as practicable following the date of this prospectus, we intend to file a registration statement on Form S-8 under the Securities Act to register up to 373,416 shares of our common stock that are reserved for issuance or previously issued under our amended and restated 2003 stock incentive plan. On August 29, 2003, we granted options to purchase 208,025 shares of our common stock to certain of our employees under our amended and restated stock incentive plan. We expect to grant additional options under the plan in the future. As those options vest and are exercised, the shares issued on exercise generally will be available for sale in the open market by holders who are not affiliates of DigitalNet and, subject to the volume and other applicable limitations of Rule 144, by holders who are affiliates of DigitalNet. The registration statement is expected to become effective upon filing.

        After this offering, the holders of 10,972,346 shares of common stock and the holders of warrants to purchase 94,868 shares of our common stock will have certain rights with respect to registration of such shares for sale to the public. See "Summary—The Offering" for a detailed discussion of shares included and

26

excluded from these numbers. If such holders, by exercising their registration rights, cause a large number of securities to be registered and sold in the public market, such sales could have an adverse effect on the market price for our common stock. See "Shares Eligible for Future Sale" for further details regarding the number of shares eligible for sale in the public market after this offering.

    If you invest in this offering, you will experience immediate and substantial dilution.

        The initial public offering price of our common stock is substantially higher than the pro forma net tangible book value per share of the outstanding common stock. As a result, investors purchasing common stock in this offering will incur immediate and substantial dilution of $18.26 per share in the pro forma net tangible book value of the common stock, assuming an initial public offering price of $15.00 per share, the mid-point of the range shown on the cover page of this prospectus, and a June 30, 2003 closing. This means that the investors who purchase shares:

•

will pay a price per share that substantially exceeds the per share value of our assets after subtracting our liabilities; and



•

will have contributed 53% of the total amount of our equity funding since inception but will only own 31% of the shares outstanding, assuming an initial public offering price of $15.00 per share, the mid-point of the range shown on the cover page of this prospectus.

        We have offered, and expect to continue to offer, stock options to our employees. As of August 29, 2003, there were 208,025 shares of common stock issuable upon exercise of outstanding stock options. To the extent options or warrants we have issued or may issue in the future have exercise prices below the initial public offering price and such options or warrants are exercised, there will be further dilution to new public investors.

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FORWARD-LOOKING STATEMENTS

        Some of the statements under "Summary," "Risk Factors," "Management's Discussion and Analysis of Financial Condition and Results of Operations," "Business," and elsewhere in this prospectus constitute forward-looking statements that relate to future events or our future performance. These statements involve known and unknown risks, uncertainties, and other factors that may cause our actual results, level of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. Words such as "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "plan," "potential," "should," "will," and "would," or the negative of such terms or other comparable words are intended to identify forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including the risks outlined under "Risk Factors" and elsewhere in this prospectus. We undertake no obligation to update publicly or revise any forward-looking statements. You should not place undue reliance on the forward-looking statements.

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USE OF PROCEEDS

        Our net proceeds, after deducting the underwriting discount and commissions and estimated offering expenses, from the sale of the 5,000,000 shares of our common stock being offered by this prospectus are estimated to be approximately $68.0 million, or $78.4 million if the underwriters exercise in full their option to purchase up to 750,000 additional shares of our common stock from us, at the initial public offering price less the underwriters' discount, based upon an assumed initial public offering price of $15.00 per share, the mid-point of the range shown on the cover page of this prospectus, after deducting the underwriting discounts and commissions and estimated offering expenses payable by us.

        We expect to use the net proceeds from this offering together with the proceeds of $908,000 from the repayment of certain management notes receivable and borrowings of $5.2 million under our current credit facility to:

•

redeem $43.8 million in aggregate principal amount of outstanding 9% senior notes due 2010 for approximately $47.7 million, or 109% of the aggregate principal amount of the notes being redeemed; and



•

exercise our right of first refusal to purchase for $27.0 million all of the outstanding shares of the Class B Preferred Stock.

        The foregoing amounts assume the sale of the 9% senior notes due 2010 and the offering were completed on June 30, 2003. The actual amount required to redeem approximately $43.8 million in aggregate principal amount of the 9% senior notes due 2010 will be affected by the amount of interest accrued and unpaid from the date of issuance to the date of redemption.

        As described in "Description of Certain Indebtedness" our indebtedness under the 9% senior notes due 2010 bears interest at an annual rate of 9%. We applied the net proceeds from the issuance of the 9% senior notes due 2010 toward the repayment of the indebtedness under the subordinated bridge facility and the term loan portion of the senior secured credit facility. The 9% senior notes due 2010 mature July 15, 2010.

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DIVIDEND POLICY

        We have never declared or paid any cash dividends on our capital stock or other securities. The terms of our current credit facility and the indenture governing the 9% senior notes due 2010 restrict our ability to pay dividends on our common stock. We currently intend to retain all future earnings, if any, for use in the operation, development, and expansion of our business. As a result, we do not anticipate paying any cash dividends in the foreseeable future. Any future determination as to the declaration and payment of cash dividends will be at the discretion of our board of directors and will depend on then-existing conditions, business prospects, and any other factors our board of directors deems relevant.

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CAPITALIZATION

        The following table sets forth the cash and cash equivalents and capitalization of DigitalNet Holdings, Inc. as of June 30, 2003:

•

On an actual basis;



•

On a pro forma basis, assuming that the following were completed as of June 30, 2003:



•

The sale of the 9% senior notes due 2010 issued by DigitalNet, Inc. on July 3, 2003 and the related exchange offer including the following:



•

The application of the estimated net proceeds from the sale of the 9% senior notes due 2010 of $121.3 million, together with cash on hand of approximately $2.8 million, to repay $44.0 million of outstanding indebtedness under our subordinated bridge facility plus accrued interest of $18,000, to repay $78.8 million of outstanding indebtedness under our term loan facility plus accrued interest of $85,000 and to pay the financing costs related to our current credit facility and the exchange offer; and



•

The write-off of approximately $4.4 million of deferred financing costs and debt discounts and the related tax benefit of approximately $1.7 million attributable to the subordinated bridge facility debt repaid and the term loan facility debt repaid and the termination of our previous revolving credit facility.



•

On a pro forma as adjusted basis, assuming that each of the following were completed as of June 30, 2003:



•

The sale of the 9% senior notes due 2010 issued by DigitalNet, Inc. on July 3, 2003 and certain related transactions, as described above; and



•

The offering contemplated hereby including the following:



•

The filing of a restated certificate of incorporation upon the closing of this offering to authorize 100,000,000 shares of common stock and 5,000,000 shares of preferred stock, each with a par value of $0.001 per share;



•

The sale of 5,000,000 shares of common stock in this offering at an assumed initial public offering price of $15.00 per share, the mid-point of the range shown on the cover page of this prospectus;



•

The required repayment by management and other employees of $908,000 of certain promissory notes immediately prior to the completion of this offering;



•

The application of the net proceeds from this offering, after deducting the underwriting discount and commissions and estimated offering expenses, of approximately $68.0 million together with the proceeds of $908,000 from the repayment of certain management notes receivable and borrowings of approximately $5.2 million under our current credit facility to redeem $43.8 million in aggregate principal amount of the 9% senior notes due 2010 for approximately $47.7 million and to purchase for $27.0 million all of the outstanding shares of the Class B Preferred Stock as described in "Use of Proceeds;"



•

The recognition of a charge of approximately $3.9 million and the related tax benefit of approximately $1.5 million attributable to the premium paid to redeem approximately $43.8 million in aggregate principal amount of the 9% senior notes due 2010;



•

The write-off of approximately $1.9 million of deferred financing costs and the related tax benefit of $730,000 attributable to the 9% senior notes due 2010 redeemed with a portion of the net proceeds of this offering;

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•

The conversion of our Class A Preferred Stock outstanding as of June 30, 2003, including accrued dividends, into 4,239,320 shares of common stock upon completion of this offering, assuming an initial public offering price of $15.00 per share, the mid-point of the range shown on the cover page of this prospectus. Our Class A Preferred Stock accrues dividends on a daily basis at an annual rate of 6%. Upon conversion, dividends that have accrued from June 30, 2003 to the date of conversion will increase the number of shares of common stock into which the Class A Preferred Stock converts;



•

The recognition of a beneficial conversion feature recorded as a deemed dividend of approximately $11.2 million on our Class A Preferred Stock upon conversion of the Class A Preferred Stock into common stock upon completion of this offering; and



•

The recognition of stock-based compensation charges of approximately $9.2 million as a result of the completion of this offering, assuming an initial public offering price of $15.00 per share, the mid-point of the range shown on the cover page of this prospectus.

        The amounts above related to the repayment of outstanding indebtedness with the proceeds from the sale of the 9% senior notes due 2010 assume that such sale was completed on June 30, 2003. The actual amounts repaid under our subordinated bridge facility and our term loan facility were affected by the amount of interest accrued and unpaid from June 30, 2003 to the repayment date of July 3, 2003.

        The amount above related to the redemption of the 9% senior notes due 2010 assumes the offering was completed on June 30, 2003. The actual amount required to redeem approximately $43.8 million of the 9% senior notes due 2010 will be affected by the amount of interest accrued and unpaid from the date of issuance to the date of redemption.

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DigitalNet Holdings, Inc.

(1)

Our previous revolving credit facility provided for borrowings of up to $25.0 million. This facility terminated upon the commencement of our current credit facility on July 3, 2003. Our current credit facility provides for borrowings of up to $50.0 million. Our subsidiary, DigitalNet, Inc., is the borrower under our current credit facility.

(2)

The actual balance as of June 30, 2003 consists of $78.8 million principal amount net of a $454,000 discount. Accrued interest on the term loan facility totaled $85,000 as of June 30, 2003 and was included in accrued expenses on our June 30, 2003 unaudited consolidated balance sheet. This facility was terminated upon repayment on July 3, 2003.

(3)

The actual balance as of June 30, 2003 consists of $44.0 million principal amount net of a $85,000 discount. Accrued interest on the subordinated bridge facility totaled $18,000 as of June 30, 2003 and was included in accrued expenses on our June 30, 2003 unaudited consolidated balance sheet. This facility was terminated upon repayment on July 3, 2003.

(4)

Our subsidiary, DigitalNet, Inc., is the issuer of the 9% senior notes due 2010.

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         See "Unaudited Pro Forma Consolidated Financial Information" for a detailed discussion of the pro forma and pro forma as adjusted balance sheet data and the related adjustments. You should also read this table along with "Management's Discussion and Analysis of Financial Condition and Results of Operations" and the DigitalNet and DGS consolidated financial statements and related notes appearing elsewhere in this prospectus.

        The outstanding share information in the preceding table excludes the following as of June 30, 2003:

•

208,025 shares of common stock that will be subject to issuance upon exercise of the options we granted in August 2003 under our amended and restated 2003 stock incentive plan;



•

165,391 additional shares of common stock reserved for future issuance under our amended and restated 2003 stock incentive plan, including the approximately 80,000 shares that will be subject to issuance upon exercise of the options we expect to grant pursuant to the plan shortly after the completion of this offering;



•

94,868 shares of common stock subject to outstanding warrants to purchase common stock at an exercise price of $0.01 per share;



•

379,475 shares of common stock subject to outstanding warrants to purchase common stock at an exercise price of $0.01 per share, which were cancelled upon our repayment in full of our subordinated bridge facility on July 3, 2003; and



•

750,000 shares of common stock that may be issued pursuant to the underwriters' option to purchase additional shares of our common stock from us at the initial public offering price less the underwriters' discount.

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DILUTION

        If you invest in our common stock, your interest will be diluted to the extent of the difference between the initial public offering price per share of our common stock and the pro forma as adjusted net tangible book value per share of our common stock immediately after this offering.

        The pro forma net tangible book value of our common stock as of June 30, 2003 was approximately $(125.3) million, or approximately $(11.43) per share. Pro forma net tangible book value per share represents the amount of our total tangible assets less our total liabilities after giving effect to the sale of the 9% senior notes due 2010 and certain related transactions and the conversion of our Class A Preferred Stock into common stock divided by the pro forma number of shares of common stock outstanding after giving effect to the conversion of our Class A Preferred Stock outstanding as of June 30, 2003 into 4,239,320 shares of common stock upon the completion of this offering, assuming an initial public offering price of $15.00 per share, the mid-point of the range shown on the cover page of this prospectus. See "Capitalization" for a detailed discussion of the transactions related to the sale of the 9% senior notes due 2010.

        Dilution in net tangible book value per share represents the difference between the amount per share paid by purchasers of shares of common stock in this offering and the net tangible book value per share of common stock immediately after the completion of this offering.

        After giving effect to the issuance and sale of the shares of common stock offered by us and after deducting the underwriting discount and commissions and estimated offering expenses payable by us, and the application of the net proceeds therefrom together with proceeds from the repayment of certain management notes receivable and borrowings under our current credit facility to redeem certain indebtedness and to purchase all of the outstanding shares of the Class B Preferred Stock as described under "Use of Proceeds," our pro forma as adjusted net tangible book value as of June 30, 2003 would have been approximately $(52.1) million, or approximately $(3.26) per share. This represents an immediate increase in pro forma net tangible book value of approximately $8.17 per share to existing stockholders and an immediate dilution of approximately $18.26 per share to new investors purchasing shares in this offering. If the initial public offering price is higher or lower, the dilution to the new investors will be greater or less, respectively. The following table illustrates this per share dilution:

        The following table summarizes, as of June 30, 2003, on the pro forma basis described above, the total number of shares of common stock purchased from us, the value of the total consideration paid to us, or attributed to the shares purchased, and the average price per share paid to us, or attributed to the shares purchased, by the existing stockholders and by the investors purchasing shares of common stock in this offering. The calculation below is based on an assumed initial public offering price of $15.00 per share, the mid-point of the range shown on the cover page of this prospectus, before deducting the underwriting

35

discount and commissions and estimated offering expenses payable by us (dollars in thousands, except per share data):

        If the underwriters exercise in full their option to purchase additional shares of our common stock from us at the initial public offering price less the underwriters' discount, the percentage of shares held by existing stockholders will decrease to 66% of the total shares outstanding, and the number of shares held by new investors will increase to 5,750,000, or 34% of the total shares outstanding.

        The discussion and table assume no exercise of any stock options or warrants outstanding and therefore excludes:

•

208,025 shares of common stock that will be subject to issuance upon exercise of the options we granted in August 2003 under our amended and restated 2003 stock incentive plan;



•

165,391 additional shares of common stock reserved for future issuance under our amended and restated 2003 stock incentive plan, including the approximately 80,000 shares that will be subject to issuance upon exercise of the options we expect to grant pursuant to the plan shortly after the completion of this offering;



•

94,868 shares of common stock subject to outstanding warrants to purchase common stock at an exercise price of $0.01 per share;



•

379,475 shares of common stock subject to outstanding warrants to purchase common stock at an exercise price of $0.01 per share, which were cancelled upon our repayment in full of our subordinated bridge facility on July 3, 2003; and



•

750,000 shares of common stock that may be issued pursuant to the underwriters' option to purchase additional shares of our common stock from us at the initial public offering price less the underwriters' discount.

        To the extent existing options or warrants or options or warrants we may issue in the future with exercise prices below the initial public offering price are exercised, there will be further dilution to new public investors.

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SELECTED CONSOLIDATED FINANCIAL DATA

        The following selected consolidated financial data should be read in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations," our consolidated financial statements and the related notes and DigitalNet Government Solutions, LLC's consolidated financial statements and the related notes, included elsewhere in this prospectus. The historical results are not necessarily indicative of results to be expected for any future period. Our consolidated statement of operations data and other financial data for the period from September 7, 2001 (inception) through December 31, 2001 and for the year ended December 31, 2002 and the balance sheet data as of December 31, 2001 and 2002 are derived from our consolidated financial statements audited by Ernst & Young LLP, independent auditors, and are included elsewhere in this prospectus.

        Our statement of operations data and other financial data for the six months ended June 30, 2002 and 2003 and the balance sheet data as of June 30, 2003 are derived from our unaudited interim consolidated financial statements which are included elsewhere in this prospectus. The balance sheet data as of June 30, 2002 is derived from our unaudited interim consolidated financial statements for the six months ended June 30, 2002 not included in this prospectus. In the opinion of management, the unaudited interim consolidated financial statements for the six months ended June 30, 2002 and 2003 include all adjustments (consisting of normal recurring adjustments) that are necessary for a fair presentation of such consolidated financial statements. Our statement of operations data and other financial data for the three months ended June 30, 2003 are derived from our unaudited interim consolidated financial statements not included in this prospectus, which in the opinion of management, include all adjustments (consisting of normal recurring adjustments) that are necessary for a fair presentation of such consolidated financial statements. The results of operations for the three and six months ended June 30, 2003 are not necessarily indicative of the results to be expected for the entire fiscal year or for any future period.

        The statement of operations data and other financial data for DigitalNet Government Solutions, LLC for the years ended December 31, 2000 and 2001 and the period from January 1, 2002 through November 25, 2002 and the balance sheet data as of December 31, 2001 and as of November 25, 2002 are derived from the consolidated financial statements of DigitalNet Government Solutions, LLC, which have been audited by Ernst & Young LLP, independent auditors, and are included elsewhere in this prospectus. The statement of operations data and other financial data for the six months ended June 30, 2002 and the balance sheet data as of June 30, 2002 are derived from the DigitalNet Government Solutions, LLC unaudited interim consolidated financial statements not included in this prospectus and which, in the opinion of management, include all adjustments (consisting of normal recurring adjustments) that are necessary for a fair presentation of such consolidated financial statements. The balance sheet data as of December 31, 2000 and the statement of operations data and the other financial data for DigitalNet Government Solutions, LLC as of and for the years ended December 31, 1998 and 1999 are derived from audited consolidated financial statements not included in this prospectus.

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DigitalNet Holdings, Inc.
Selected Historical and Pro Forma As Adjusted Consolidated Financial Data
(dollars in thousands, except per share data)