Hitech Engineering Co. said it will absorb the employes and several advisory board members of PNX Systems, a newly incorporated firm specializing in high-security computer systems.
Hitech said it is neither merging with nor acquiring PNX, but has invited the company's principals to join Hitech.
PNX's seven employes will take positions with Hitech, while the five PNX advisers joining Hitech will receive stock options for an undisclosed amount. Both companies are in McLean.
Hitech will form an advisory board composed of Charles Broadhead, vice president of Alex.
Brown & Sons Inc.; Larry Darby, vice president of corporate finance for Shearson Lehman Bros. in New York; Gen. Lincoln Farr, former director of the National Security Agency and president and chief executive officer of the Corporation for Open Systems in Vienna; Harry Fitzwater, former deputy director for administration of the Central Intelligence Agency, and Milton Zaslow, formerly with the NSA.
William A. Best, who incorporated PNX Systems in March and was its president, will become chairman of Hitech's advisory board.
"We've shifted gears from getting PNX off the ground. We're now subordinating our energies to help Hitech expand," said Farr.
He said he plans to use his experience in government to help Hitech gauge the demand in the intelligence community for secure computer systems and will offer advice on technical matters.
Francine J. Prokoski, president and chief executive officer of Hitech, said the new board members are "bringing strategic planning support to Hitech and some very strong financial advice for us." The board will be separate from Hitech's legal board of directors and have no fiduciary or legal responsibility to the firm, said Best.
Both companies design and market computer systems that are shielded from electronic espionage by using a technology known as Tempest. Tempest quells the radio-frequency waves emitted by computers so they won't be picked up by eavesdroppers.
"They Hitech have the established ground in the industry," said Best.
"A lot of things they've done are things that we would have to replicate. It would be a case of having to reinvent the wheel."
Hitech is a member of the NSA's Industrial Tempest Program and has three products on the NSA's preferred-product list for Tempest-approved equipment.
Best's PNX had been working on projects that combine Tempest technology with encryption, a technique whereby the computer's radio emissions are scrambled. Prokoski said PNX's expertise in encryption technology will make Hitech "a much stronger player in that field."
Hitech, which last quarter had revenue of $1.8 million and earnings of $128,000, has been plagued by financial troubles recently.
After its founding in 1983, the company posted a $1.1 million loss in 1984 and a $1.8 million loss for 1985.
Best said he had no immediate plans to unincorporate PNX.