UNITED STATES
                    SECURITIES AND EXCHANGE COMMISSION
                         WASHINGTON, D.C.  20549
                                 FORM 10-K
(Mark One)
 X   ANNUAL  REPORT  PURSUANT  TO SECTION 13 OR  15(D)  OF  THE  SECURITIES
     EXCHANGE ACT OF 1934

For the fiscal year ended June 30, 1999

     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
     EXCHANGE ACT OF 1934

For the transition period from ______________ to _________________

Commission file number     0-5404
                               HADRON, INC.

          (Exact name of registrant as specified in its charter)

         New York                        11-2120726
(State or other jurisdiction of      (I.R.S. Employer Identification
incorporation or organization)        Number)

                7611 Little River Turnpike, Suite 404 West
                         Annandale, Virginia 22003
                 (Address of principal executive offices)

             Registrant's telephone number including area code
                              (703) 642-9404

Securities registered pursuant to Section 12(b) of the Act:  None

Securities registered pursuant to Section 12(g) of the Act:

                 Common Stock, par value $0.02 per share
                             (Title of Class)

Indicate  by  check mark whether the registrant (1) has filed  all  reports
required to be filed by Section 13 or 15(d) of the Securities Exchange  Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant  was required to file such reports) and (2) has been subject  to
such filing requirements for the past 90 days.
        Yes   X                           No  ___

Indicate by check mark if disclosure of delinquent filers pursuant to  Item
405  of  Regulation S-K is not contained herein, and will not be contained,
to  the  best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K  or  any
amendment to this Form 10-K. [X]

As of September 23, 1999, the aggregate market value of the common stock of
the  registrant  held by non-affiliates of the registrant (based  upon  the
average  bid  and  asked  prices of the common stock  as  reported  by  the
National Association of Securities Dealers Inc. through its Electronic  OTC
Bulletin Board) was approximately $1,379,573.

As  of  September  23, 1999, 2,707,217 shares of the common  stock  of  the
registrant were outstanding.
<PAGE>
                             PART I


Item 1.   Business


Introduction

     Hadron,  Inc. ("Hadron" or the "Company") provides  a  broad
range  of  information,  management  and  technical  services  to
businesses   and  federal  government  agencies.    The   Company
specializes in developing innovative technical solutions for  the
intelligence community, analyzing and supporting defense  systems
(including  intelligent  weapons systems and  biological  warfare
defense),  and  supporting  computer  systems.  The  Company  was
incorporated  in  New  York in 1964, and  can  be  found  on  the
Internet at www.hadron.com.


Operations

     The  Company's  ongoing operations are  formally  structured
along  the  business  lines of its four  operating  subsidiaries,
although there is considerable cooperation and interaction  among
the   subsidiaries.  Descriptions  of  the  operations   of   the
subsidiaries follow.

Engineering & Information Services, Inc. ("EISI")

     EISI,  incorporated in Virginia as a wholly-owned subsidiary
of Hadron, provides the Department of Defense ("DoD") and related
clients  with  software and hardware engineering  expertise  that
include:  systems  integration; software development;  local  and
wide-area   computer   networking   installation   and   support;
relational  database  development on client-server  architecture;
and hardware board-level design and development.

     EISI   supports  the  DoD  environment  with  UNIX   systems
installation  and administration and development  of  large-scale
integrated database applications on distributed workstations in a
client-server architecture.  EISI also provides a variety of cost-
effective engineering services.

     EISI  has been a long-term provider of software and hardware
expertise  to  The  Johns  Hopkins  University  Applied   Physics
Laboratory  ("APL"),  located  near Baltimore,  Maryland.  EISI's
business  with  APL constitutes approximately  45%  of  the  1999
revenues  of  the  Company. EISI staff are  instrumental  in  the
design  and  development of multi-platform analysis,  simulation,
communications,  and  decision  support  systems  for  APL.  EISI
applications  developed  for APL help  ensure  the  accuracy  and
readiness  of  a  number of U.S. Navy defense  systems  that  are
deployed in global operations today.

     In  April  1997,  the  Company was  awarded  four  follow-on
contracts  by  APL  to  continue its support  activities  through
September 2001.
<PAGE>

SyCom Services, Inc. ("SyCom")

     Hadron's   wholly-owned  subsidiary,   SyCom,   a   Delaware
corporation, is an information management and systems development
firm.   SyCom specializes in computer-based technologies  related
to  complex  information, communications and electronic  systems.
Headquartered  near Baltimore, Maryland, SyCom  performs  a  full
range  of information and network support services for commercial
and  defense-related  clients working on  military  and  civilian
electronic systems.

     SyCom  has particular expertise in the development of  real-
time  and  embedded  software engineering  for  systems  such  as
civilian and military radars, airspace management systems, signal
analysis  and specialized database systems.  SyCom also  provides
software  support,  including  software  documentation,  document
management  and  imaging. SyCom's business from Northrop  Grumman
constitutes  approximately  40%  of  the  1999  revenues  of  the
Company.

Vail Research and Technology Corporation ("Vail")

      Effective  December  18, 1998, the  Company  acquired  Vail
Research  and  Technology Corporation ("Vail"), a  privately-held
information   technology  firm  based  in  Annandale,   VA,   for
approximately  $1,580,000.   Vail  operates  as  a   wholly-owned
subsidiary  of  Hadron.  Vail provides a comprehensive  range  of
superior-quality professional and technical services to clients -
including  the  U.S.  Navy,  Defense Advanced  Research  Projects
Agency   (DARPA),  U.S.  Army,  U.S.  Air  Force,  U.S.   Special
Operations   Command,   NASA,   Department   of   Transportation,
Department of Commerce, Department of Energy as well as  numerous
private-sector firms.

Avenue Technologies, Inc.  ("ATI")

       Effective  May  12,  1999,  the  Company  acquired  Avenue
Technologies,   Inc.   ("ATI"),  a   privately-held   information
technology  firm  based  in  Alexandria,  VA,  for  approximately
$2,500,000.  ATI operates as a wholly-owned subsidiary of Hadron.
Within the broad field of information technology, ATI specializes
in  the  areas  of intelligence, special operations  and  systems
integration  support.  ATI  core  competencies  include   systems
integration,   specialized   software   development,    technical
evaluation    services,   intelligence   systems   architectures,
specialized   training   services,  and  information   operations
support.   Key  ATI  clients include the National  Reconnaissance
Office,  the  Defense Intelligence Agency, the National  Security
Agency,  the  Naval Research Laboratory, the U.S. Navy,  and  the
Defense Advanced Research Projects Agency (DARPA).
<PAGE>

General Information

     The  Company operates predominantly in one industry segment,
providing  engineering,  computer  support  services  and   other
professional technical services. In general, the industry segment
in  which  the  Company  operates  includes  a  large  number  of
competitors  of varying sizes, many of which, like  the  Company,
are   principally   located  in  the   Washington,   D.C.   area.
Competition  within  the  information technology  and  government
contracting  arenas  is  extremely intense;  selection  is  based
primarily  on  a  combination  of  the  price  of  services   and
evaluation  of  technical  capability,  as  well  as  reputation,
quality of service and responsiveness to client requirements.

     The Company maintains a primary commitment to its direct and
indirect   government   clients,  but  is   also   simultaneously
intensifying its program of business development targeted  toward
commercial  operations.   The Company is  continuing  efforts  to
diversify its client base.

     Direct  and  indirect contracts with government defense  and
intelligence  agencies  comprise the majority  of  the  Company's
business  base,  and increased competition for  government-funded
projects continues to exert pressure on profit margins.  However,
the   Company's   management  continues  its  program   of   cost
containment,  primarily  in the areas of  indirect  labor  costs,
overhead  and general and administrative expenses, and  therefore
believes  the Company is well positioned and competitive  in  its
marketplace.

     The  revenues of EISI accounted for 54%, 57% and 55% of  the
Company's total consolidated revenues for the fiscal years  1999,
1998  and  1997,  respectively.  During the  same  fiscal  years,
SyCom's revenues respectively accounted for 40%, 43% and  44%  of
consolidated  revenues.  The combined revenues of  Vail  and  ATI
accounted for 6% of the Company's total consolidated revenues for
fiscal year 1999.

     The  Company's backlog of orders believed to be firm  as  of
June 30, 1999 approximates $16 million, which the Company expects
will  be  filled during fiscal 2000.  As of June  30,  1998,  the
Company  had  approximately $15 million in firm  backlog  orders.
Included  in  the  firm backlog approximation  are  estimates  of
amounts   the  Company  anticipates  receiving  under  government
contracts,  some  of  which are indefinite  delivery,  indefinite
quantity contracts, under which services are provided as  ordered
by  the  government.   Not included in the backlog  approximation
are amounts from future years of government contracts under which
the  government  has  the right to exercise  an  option  for  the
Company to perform services.
<PAGE>

     As of June 30, 1999 the Company (including its subsidiaries)
employed  approximately 250 people, including 10 and 45 employees
for  Vail and ATI, respectively.  The Company's employees are not
members  of  any  union, and employee relations are  believed  by
management to be generally good.
     Raw materials, patents, licenses, trademarks, franchises and
concessions  are not materially important to the conduct  of  the
Company's business and the Company's business is not seasonal.


Government Procurement

     The  Company  is heavily dependent on the DoD,  as  well  as
other  U.S. governmental agencies, for contract work.   Contracts
and  subcontracts with the DoD produced approximately 48% of  the
Company's  total revenues during fiscal year 1999.  The Company's
other   U.S.  government  contracts  and  subcontracts   produced
approximately  12% of the Company's total revenues during  fiscal
year  1999.   Contracts with the U.S. Government are  subject  to
audit by the Defense Contract Audit Agency.

     The  Company has been a contractor or subcontractor with the
DoD  continuously since 1973 with periodic renewals.  During this
time,  neither the Company nor its subsidiaries have  experienced
any   material  adjustment  of  profits  under  these  contracts;
however, no assurance can be given that the DoD will not seek and
obtain  an  adjustment  of  profits  in  the  future.   All  U.S.
government   contracts  contain  clauses  that  allow   for   the
termination  of  contracts  at  the  convenience  of   the   U.S.
government.

     The   preponderance   of   the   Company's   technical   and
professional service business with the DoD and other governmental
agencies is obtained through competitive procurement and  through
"follow-up"  services related to existing business.   In  certain
instances,  however, the Company acquires such service  contracts
because   of   special  professional  competency  or  proprietary
knowledge in specific subject areas.


Recent Developments

     Effective June 30, 1997, SyCom entered into an agreement  to
sell the HeaTreaT software products and certain related assets to
Performance  Engineering International  Corp.  ("PEI"),  a  newly
formed  company  owned  by former Hadron  and  SyCom  executives.
During  fiscal  year 1998, PEI ceased operations.  In  accordance
with the terms of the agreement, the HeaTreaT assets reverted  to
SyCom.  The Company retained a third party to pursue the sale  of
these assets, which had a carrying value of $135,900 at June  30,
1998.   These  efforts proved unsuccessful and the Company  wrote
off the investment in the fourth quarter of fiscal year 1999.
<PAGE>

      In January 1999, the Company announced establishment of  an
acquisition program to further growth and diversification of  its
client  base.   In  connection  with  the  program,  the  Company
retained  Boles,  Knop and Company, L.L.C. to provide  investment
banking services.

      In  April  1999,  the Company hired a chief  scientist  and
business development executive with extensive experience  in  the
areas  of  biological weapons defense and counter  terrorism,  in
order to establish and develop initiatives in these fields.


Item 2.   Properties

     The  Company owns no real estate.  As of June 30, 1999,  the
Company  leased  a total of 29,800 square feet of  office  space.
These leases expire between February and December 2002. (See Note
10 of the Notes to Consolidated Financial Statements.)

Item 3.   Legal Proceedings

     No material legal proceedings are currently pending.


Item 4.   Submission of Matters to a Vote of Security Holders

     None.
<PAGE>

                            PART II

Item 5.   Market  for  Registrant's  Common  Equity  and  Related
          Shareholder Matters

     The  Company's  common  stock,  par  value  $.02  per  share
("Common  Stock"),  is  traded  on the  National  Association  of
Securities Dealers' ("NASD") Electronic OTC Bulletin Board, under
the symbol HDRN.

     The  range  of  high and low bid quotations for  the  Common
Stock,  as  reported by the National Quotation Bureau,  for  each
quarterly period during the fiscal years ended June 30, 1999  and
June 30, 1998 is shown below:


Fiscal Year Ended June 30, 1999                High     Low
-------------------------------               -------   ------
     First Quarter
     (7/1 to 9/30/98)                         2 1/16   1 5/8
     Second Quarter
     (10/1 to 12/31/98)                       2        1 5/8
     Third Quarter
     (1/1 to 3/31/99)                         1 5/8    1 9/32
     Fourth Quarter
     (4/1 to 6/30/99)                         1 5/16   1 9/32


Fiscal Year Ended June 30, 1998                High     Low
-------------------------------               -------  -------
     First Quarter
     (7/1 to 9/30/97)                         1 5/32     7/8
     Second Quarter
     (10/1 to 12/31/97)                       2 11/16  1 5/32
     Third Quarter
     (1/1 to 3/31/98)                         2 1/8    1 11/16
     Fourth Quarter
     (4/1 to 6/30/98)                         2 5/16   1 3/4



     As  of  September  23, 1999, there were approximately  2,164
shareholders of record of the Company's Common Stock.

     No  cash  dividends  were paid during the  past  two  fiscal
years,  and  none are expected to be declared during fiscal  year
2000.
<PAGE>
<TABLE>
Item 6.  Selected Financial Data

                                          Fiscal Year Ended
                                                June 30
<CAPTION>
                                1999      1998    1997     1996     1995
                              -------   -------  ------   -------  -------
                              (In Thousands, except per share amounts)
<S>                           <C>       <C>      <C>      <C>      <C>
Total Revenues                $20,333   $21,134  $16,988  $18,306  $20,534

Operating Income (Loss)            63       888      128       59     (161)
Interest Expense, net of
 Interest income                   78        56       84      132      217
Income (Loss)
 before income taxes &
 extraordinary item                48       819       57      194     (436)
Income (Loss)
 before extraordinary item         34       761       13      162     (460)
Extraordinary item -
 gain on retirement
 of debt                                                             2,718
Net Income                         34       761       13      162    2,258
Income (Loss) per share
 of Common Stock:
Per share data:
 Income (Loss) before
 extraordinary item
 Basic                            .02       .45      .01      .11     (.31)
 Diluted                          .01       .26      .01      .11     (.31)
Extraordinary item - gain on
 retirement of debt                                                   1.82
Net Income
 Basic                            .02       .45      .01      .11     1.51
 Diluted                          .01       .26      .01      .11     1.51
At Period End:
Total Assets                    6,690     3,507    2,712    2,874    4,373
Long-term Liabilities           2,160        53      169      320      341
Working Capital (Deficit)         (67)     (186)    (906)    (654)    (978)
Shareholders' Equity
 (Deficit)                        456        22     (811)    (869)  (1,047)
</TABLE>
<PAGE>
Item 7 and  7A. Management's Discussion and Analysis of Financial
          Condition  and  Results of Operations and  Quantitative
          and Qualitative Disclosure about Market Risk

                      Results of Operations
       Comparison Of Fiscal Year 1999 To Fiscal Year 1998

     Revenues  for  the  fiscal year ended  June  30,  1999  were
approximately  $20,333,000, a 4% decrease from the  prior  fiscal
year.   This  decrease  reflects fewer contract  requirements  at
major government and commercial customers of both EISI and SyCom,
primarily   due  to  certain  government  budgetary  constraints,
partially  offset by revenues from newly acquired companies  Vail
and ATI.

     Costs  of  revenue for the fiscal year ended June  30,  1999
were  approximately $17,735,000, a decrease of  approximately  2%
from  the prior fiscal year.  The decrease is due primarily to  a
decrease   in  billable  positions  with  major  government   and
commercial customers of both EISI and SyCom.  Costs of revenue as
a  percentage of revenues were approximately 87% and 86% for  the
fiscal years ended June 30, 1999 and 1998, respectively.  This 1%
increase  is  due primarily to retaining technical  professionals
awaiting new tasking by customers.

     Selling,   general   and  administrative  expenses   totaled
approximately $2,535,000 for the fiscal year ended June 30, 1999,
compared with approximately $2,128,000 for the prior fiscal year.
The  increase is primarily due to the Company's addition  of  key
administrative  personnel  heading  up  the  Company's   business
development efforts.

     The  Company  had  an operating profit  of  $63,000  in  the
current  fiscal year, compared to an operating profit of $888,000
in   the   prior   fiscal  year.   This  decrease  is   primarily
attributable  to the loss of billable employees due  to  customer
cutbacks,  coupled with the retaining of technical  personnel  on
overhead  while awaiting new customer tasking and funding,  along
with  the  increase in corporate personnel hired to  develop  the
Company's initiatives in the areas of biological weapons  defense
and counter terrorism.

     For  the  twelve  months ended June 30, 1999,  other  income
(expense)  decreased by $55,000, primarily reflecting the  write-
off   of   assets  held  for  resale  and  certain  miscellaneous
liabilities.

     Net income was approximately $34,000, compared to net income
of  approximately  $761,000  in the  prior  year.   The  decrease
resulted  from the loss of billable positions and hiring  freezes
by  the  Company's  major customers, coupled with  the  costs  of
retaining  key technical professional personnel and  diversifying
business development efforts.
<PAGE>

                     Results of Operations
       Comparison Of Fiscal Year 1998 To Fiscal Year 1997

     Revenues  for  the  fiscal year ended  June  30,  1998  were
approximately $21,134,000, a 24% increase from the  prior  fiscal
year.   The  increase  was primarily attributable  to  growth  on
existing contracts with major government and commercial customers
of both EISI and SyCom.

     Costs  of  revenue for the fiscal year ended June  30,  1998
were approximately $18,118,000, an increase of approximately  19%
from the prior fiscal year.  The increase is due to the growth in
EISI  and  SyCom contracts noted above, partially offset  by  the
elimination  of  the  HeaTreaT product  development  expenses  of
$599,000.   Costs  of revenue as a percentage  of  revenues  were
approximately  86% and 90% for the fiscal years  ended  June  30,
1998  and  1997, respectively.  This 4% decrease is due primarily
to the elimination of the HeaTreaT expenditures.

        Selling,  general  and  administrative  expenses  totaled
approximately $2,128,000 for the fiscal year ended June 30, 1998,
compared with approximately $1,610,000 for the prior fiscal year.
The  increase is primarily due to the Company's addition  of  key
administrative  personnel, coupled with the implementation  of  a
profit-based employee incentive program, partially offset by  the
absence of HeaTreaT marketing costs of $248,000.

     The  Company  had  an operating profit of  $888,000  in  the
current  fiscal year, compared to an operating profit of $128,000
in the prior fiscal year.  This substantial increase is primarily
attributable  to the growth in EISI and SyCom, coupled  with  the
elimination of HeaTreaT expenses of $847,000, partially offset by
the increased general and administrative expenses noted above.

     For  the  twelve  months ended June 30, 1998,  net  interest
expense  decreased  approximately $28,000  from  the  prior  year
period due to decreases in the Company's average debt outstanding
during the year.

      Net  income  was  approximately $761,000, compared  to  net
income  of approximately $13,000 in the prior year.  The increase
resulted  primarily  from the improved profitability  of  current
operations,  coupled  with the elimination  of  HeaTreaT  product
costs.

Capital Resources and Liquidity

      The  working capital deficit at June 30, 1999 decreased  by
approximately  $120,000  from  June  30,  1998.   The   Company's
profitability,  coupled with its acquisitions of  Vail  and  ATI,
contributed to funding working capital requirements.

      Effective June 29, 1999, the Company entered into a Line of
Credit  Agreement  with United Bank, which provides  the  Company
with  a  $1,500,000 line of credit facility.  The line of  credit
provides  additional  working capital availability  to  fund  the
Company's  growth.   Borrowings outstanding  under  the  line  of
credit totaled $639,000 at June 30, 1999.
<PAGE>
       The  Company  is  exposed  to  market  risks  related   to
fluctuations  in  interest  rates  on  its  debt.   Increases  in
prevailing  interest rates could increase the Company's  interest
payment obligations relating to variable rate debt.  For example,
a  100  basis  points increase in interest rates  would  increase
annual interest expense by $21,000.

      For  the  twelve  months ended June 30, 1999,  the  Company
generated  cash flows from operations of approximately  $469,000.
In  addition,  the Company received new capital of  approximately
$325,000  resulting from the exercise of warrants, conversion  of
debt  and purchases under the Employee Stock Purchase Plan during
fiscal year 1999.

      The  Company is pursuing a previously announced acquisition
program  as  part of its growth strategy.  No assurances  can  be
made  as  to  the success of the program.  Previous  acquisitions
have   been   funded  through  internal  and  external   sources.
Continuing  profitability and availability of external  financing
are   necessary  for  successful  implementation  of  the  growth
strategy.  The Company may require infusion of equity capital  in
pursuit of its strategy.

Year 2000 Issue

     The Year 2000 issue is the result of computer programs being
written  using  two  digits  rather  than  four  to  define   the
applicable   year,  resulting  in  possible  system  failure   or
miscalculations causing disruptions of operations.

     The  Company has completed an internal review and assessment
of  the  impact  of  the  Year  2000 issue  upon  its  operating,
financial  and  accounting systems.  At this  time,  the  Company
believes  that,  with respect to its internal systems,  the  Year
2000 issue will not pose any significant operational problems  or
costs.   The Company has commenced a program to assess the impact
of  the  Year  2000  issue with respect to  the  Company's  major
vendors and customers (external agents).  Letters have been  sent
requesting  detailed, written information concerning existing  or
anticipated Year 2000 compliance by their systems, insofar as the
operating  systems  relate to the Company's  business  activities
with  such  parties.  The Company has received and  reviewed  the
replies  and  its assessment is that the Company's major  vendors
and customers appear to be Year 2000 ready.

     Management  of  the  Company believes it  has  an  effective
program in place to assess the Year 2000 issue.  As noted  above,
the  Company is still completing all necessary phases of the Year
2000  program.   Failure on the part of the  external  agents  to
comply  and  disruptions in the economy generally resulting  from
Year 2000 issues could materially affect the Company.  The amount
of  potential  liability and lost revenues cannot  be  reasonably
estimated at this time.

     The  Company currently has no contingency plans in place  in
the  event its external agents do not complete all phases of  the
Year   2000   resolution  process.   The  Company  is   presently
evaluating  the  status of completion and is determining  whether
such a plan is necessary.
<PAGE>
     Except for the historical information contained herein,  the
matters discussed in this 10-K include forward-looking statements
that  involve  a  number of risks and uncertainties.   There  are
certain  important factors and risks that could cause results  to
differ  materially  from  those  anticipated  by  the  statements
contained  herein.   Such  factors  and  risks  include  business
conditions  and  growth in the information services,  engineering
services, software development and government contracting  arenas
and  in the economy in general.  Competitive factors include  the
pressures toward consolidation of small government contracts into
larger  contracts awarded to major, multi-national  corporations;
the  Company's  ability to continue to recruit and retain  highly
skilled technical, managerial and sales/marketing personnel;  and
the  Company's  ability  to successfully identify,  complete  and
integrate  acquisitions.  Other risks  may be detailed from  time
to time in the Company's SEC reports.

Item 8.   Financial Statements and Supplementary Data

     The  information  required by this item is set  forth  under
Item   14(a),  which  information  is  incorporated   herein   by
reference.

Item 9.   Changes  in  and  Disagreements  with  Accountants   on
          Accounting and Financial Disclosure

     None.
<PAGE>
                            PART III

Item 10.  Directors and Executive Officers of the Registrant


Item 11.  Executive Compensation


Item 12.  Security Ownership of Certain Beneficial Owners and
          Management


Item 13.  Certain Relationships and Related Transactions


     The  information required by Items 10, 11, 12 and 13 of Part
III  of  Form  10-K  have  been omitted in  reliance  on  General
Instruction  G(3)  to  Form 10-K and are incorporated  herein  by
reference to the Company's definitive proxy statement to be filed
with  the  SEC pursuant to Regulation 14A promulgated  under  the
Securities Exchange Act of 1934, as amended.
<PAGE>
                            PART IV

Item 14.  Exhibits, Financial Statement Schedules, and Reports on
          Form 8-K.

(a) (1)  Financial Statements                                Page

Report of Independent Accountants                             F-1

Consolidated Balance Sheets as of June 30, 1999 and 1998      F-2

Consolidated Statements of Operations for the fiscal
 years ended June 30, 1999, 1998, and 1997                    F-4

Consolidated Statements of Shareholders' Equity (Deficit)
 for the fiscal years ended June 30, 1999, 1998, and 1997     F-5

Consolidated Statements of Cash Flows for the
 fiscal years ended June 30, 1999, 1998, and 1997             F-6

Notes to Consolidated Financial Statements                    F-7

(a) (2)  Financial Statement Schedules

All  schedules are omitted since the required information is  not
present  or  is  not  present in amounts  sufficient  to  require
submission  of the schedule, or because the information  required
is  included in the consolidated financial statements  and  notes
thereto.

(b)  Reports on Form 8-K

On  May  27,  1999,  the  Company filed  a  report  on  Form  8-K
disclosing  that  on May 12, 1999, the Company acquired  all  the
oustanding  capital  stock  of  the  Avenue  Technologies,   Inc.
("ATI").

On  July  14,  1999,  the Company filed  a  report  on  Form  8-K
disclosing that on June 29, 1999, the Company entered into a Loan
and  Security Agreement (the "Loan Agreement") among the Company,
United  Bank and each of the Company's wholly owned subsidiaries,
ATI,  Vail,  SyCom,  and EISI.  The Loan Agreement  provides  the
Company with a one-year $1.5 million line of credit facility (the
"Credit  Facility") and a three-year $1.5 million term loan  (the
"Term Loan").

On  July  26,  1999,  the Company filed a report  on  Form  8-K/A
amending its Current Report on Form 8-K dated May 27, 1999 by the
addition of required financial statements.
<PAGE>
(c)  Exhibits

Exhibit No.

  2.1     Stock Purchase Agreement dated as of December 18, 1998
          among Jeannine Mantz, Hadron, Inc., and Vail Research
          And Technology Corporation (incorporated by reference
          to the Company's Current Report on Form 8-K filed
          January 4, 1999).

  2.2     Stock Purchase Agreement dated as of May 12, 1999 among
          Hadron, Inc., Avenue Technologies, Inc. and Six
          Nations, Inc. (incorporated by reference to the
          Company's Current Report on Form 8-K filed May 27,
          1999).

  3.1     Articles of Incorporation (incorporated by reference to
          the  Company's  Registration  Statement  on  Form  S-1,
          Registration No. T-77699, filed May 21, 1982).

  3.2     Certificate    of    Amendment   of   Certificate    of
          Incorporation  of Hadron, Inc. dated  August  12,  1993
          (incorporated  by  reference to  the  Company's  Annual
          Report on Form 10-K for the fiscal year ended June  30,
          1993).

  3.3     Amended  and Restated Bylaws (incorporated by reference
          to  the  Company's Annual Report on Form 10-K  for  the
          fiscal year ended June 30, 1991).

  4.0     The  Company's  warrant to purchase 250,000  shares  of
          Common  Stock  issued  to Translator  Associates,  L.P.
          (incorporated  by  reference to  the  Company's  Annual
          Report on Form 10-K for the fiscal year ended June  30,
          1991).

 10.1     Hadron,  Inc.  1994  Employee  Stock  Option  Plan,  As
          Amended  (incorporated by reference  to  the  Company's
          Proxy Statement dated October 28, 1994).

 10.2     Hadron,   Inc.   1997  Employee  Stock  Purchase   Plan
          (incorporated  by  reference  to  the  Company's  Proxy
          Statement dated October 28,1997).

 10.3     Employment  Agreement  entered into  the  18th  day  of
          December,  1998,  by  and  between  Hadron,  Inc.   and
          Jeannine  Mantz  (incorporated  by  reference  to   the
          Company's  Current Report on Form 8-K filed January  4,
          1999).
<PAGE>

 10.4     Investment Banking Agreement dated January 7, 1999
          between Hadron, Inc. and Boles Knop & Company, L.L.C.
          (incorporated by reference to the Company's Current
          Report on Form 8-K filed January 28, 1999).

 10.5     Employment Agreement entered into the 12th day of May, 1999,
          by and between Hadron, Inc. and Howard C. Whetzel (incorporated
          by reference to the Company's Current Report on Form 8-K filed
          May 27, 1999).

 10.6     Loan and Security Agreement between United Bank and
          Hadron, Inc., Avenue Technologies, Inc., Vail Research
          and Technology Corporation, SyCom Services, Inc., and
          Engineering & Information Services, Inc. dated June 29,
          1999 (incorporated by reference to the Company's
          Current Report on Form 8-K filed July 14, 1999).

 10.7     Guaranty of Payment between United Bank and Hadron,
          Inc., Avenue Technologies, Inc., Vail Research and
          Technology Corporation, SyCom Services, Inc., and
          Engineering & Information Services, Inc. dated June 29,
          1999 (incorporated by reference to the Company's
          Current Report on Form 8-K filed July 14, 1999).

 10.8     $1,500,000 Commercial Note in favor of United Bank
          dated June 29, 1999 (incorporated by reference to the
          Company's Current Report on Form 8-K filed July 14,
          1999).

 10.9     $1,500,000 Revolving Commercial Note in favor of United
          Bank dated June 29, 1999 (incorporated by reference to
          the Company's Current Report on Form 8-K filed July 14,
          1999).

 10.10    Employment  Agreement with C.W. Gilluly dated  July  1,
          1998 (incorporated by reference to the Company's Annual
          Report on Form 10-K dated June 30, 1998).

 10.11    Amended  Stock Purchase Warrant granted to C.W. Gilluly
          and dated June 2, 1997.

 10.12    Employment  Agreement with S. Amber Gordon  dated  June
          24, 1999.

 10.13    Employment Agreement with George E. Fowler dated July
          1, 1999.

 10.14    Employment Agreement with Donald Jewell dated  July  1,
          1999.
<PAGE>

 10.15    Employment Agreement with Donald E. Ziegler dated  July
          1,  1998  (incorporated by reference to  the  Company's
          Annual  Report on Form 10-K for the fiscal  year  ended
          June 30, 1998.

 10.16    Employment Agreement with Shawn K. McCoy dated July  1,
          1999.

 22       Subsidiaries of the Company.

 23       Consent of Independent Auditors.

 27       Financial Data Schedule.
<PAGE>

                            SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d)  of  the
Securities  Exchange Act of 1934, the registrant has duly  caused
this  report  to  be  signed on its behalf  by  the  undersigned,
thereunto duly authorized.

Date: September 28, 1999          HADRON, INC.


By:/S/ C. W. GILLULY             By: /S/ DONALD E. ZIEGLER
   C. W. Gilluly                   Donald E. Ziegler
   Chief Executive Officer         Chief Financial Officer
    and Chairman                     (Principal Financial
    (Principal Executive Officer)     Officer and Principal
                                      Accounting Officer)

     Pursuant to the requirements of the Securities Exchange  Act
of  1934,  this  report has been signed below  by  the  following
persons on behalf of the Company and in the capacities and on the
dates indicated.

      Signature                Title          Date



/S/ C.W. Gilluly              Chairman        September 28, 1999
C.W. Gilluly


/S/ William J. Howard         Director        September 28, 1999
William J. Howard


/S/ Robert J. Lynch, Jr.      Director        September 28, 1999
Robert J. Lynch, Jr.


/S/ John D. Sanders           Director        September 28, 1999
John D. Sanders


/S/ Howard C. Whetzel
Howard C. Whetzel             Director        September 28, 1999
<PAGE>


REPORT OF INDEPENDENT ACCOUNTANTS



Board of Directors and Shareholders


We  have audited the accompanying consolidated balance sheets  of
Hadron,  Inc. and subsidiaries as of June 30, 1999 and  1998  and
the  related consolidated statements of operations, shareholders'
equity  (deficit), and cash flows for each of the three years  in
the  period ended June 30, 1999.  These financial statements  are
the    responsibility   of   the   Company's   management.    Our
responsibility  is  to  express an  opinion  on  these  financial
statements based on our audits.

We  conducted  our  audits in accordance with generally  accepted
auditing  standards.  Those standards require that  we  plan  and
perform  the  audit to obtain reasonable assurance about  whether
the  financial statements are free of material misstatement.   An
audit  includes  examining, on a test basis, evidence  supporting
the  amounts  and  disclosures in the financial  statements.   An
audit also includes assessing the accounting principles used  and
significant  estimates made by management, as well as  evaluating
the  overall  financial statement presentation.  We believe  that
our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to
above  present fairly, in all material respects, the consolidated
financial position of Hadron, Inc. and subsidiaries at  June  30,
1999  and  1998, and the consolidated results of their operations
and  their  cash flows for each of the three years in the  period
ended  June  30,  1999,  in  conformity with  generally  accepted
accounting principles.


                              /S/ ERNST & YOUNG, LLP

Vienna, Virginia
September 3, 1999
                               F-1
<PAGE>
<TABLE>
                                  HADRON, INC.
                         CONSOLIDATED BALANCE SHEETS
                        JUNE 30, 1999 AND JUNE 30, 1998
<CAPTION>
                                                          JUNE 30,     JUNE 30,
 ASSETS                                                     1999         1998
-------                                                -----------   ----------
<S>                                                    <C>           <C>
 Current assets:
   Cash and cash equivalents                            $  256,000   $   60,500
   Accounts receivable, net                              3,495,700    3,143,900
   Prepaid expenses and other                              255,400       41,100
                                                         ----------   ----------

     Total current assets                                4,007,100    3,245,500
                                                         ----------   ----------

 Fixed assets, net                                         290,900      116,300
 Goodwill                                                2,246,600
 Other                                                     145,100      145,200
                                                         ----------   ----------
     Total other assets                                  2,682,600      261,500
                                                         ----------   ----------

 Total assets                                           $6,689,700   $3,507,000
                                                        ===========  ===========
</TABLE
                  See Notes to Consolidated Financial Statements
                                    F-2
<PAGE>

</TABLE>
<TABLE>
                                  HADRON, INC.
                         CONSOLIDATED BALANCE SHEETS
                        JUNE 30, 1999 AND JUNE 30, 1998
<CAPTION>

                                                           JUNE 30,     JUNE 30,
 LIABILITIES AND SHAREHOLDERS' EQUITY                        1999         1998
-------------------------------------                    ----------   ----------
<S>                                                      <C>         <C>
 Current liabilities
   Accounts payable                                      $  917,100   $  948,900
   Note payable - line of credit                            638,800       80,000
   Note payable - current maturity of long-term debt        500,000
   Note payable - related party                             150,000      120,000
   Other current liabilities                              1,867,800    2,282,700
                                                          ----------   ----------
     Total current liabilities                            4,073,700    3,431,600
                                                          ----------   ----------

 Notes payable                                            1,292,700
 Notes payable - related parties                            805,100
 Other                                                       62,600       53,400
                                                          ----------   ----------
     Total long-term liabilities                          2,160,400       53,400
                                                          ----------   ----------
 Commitments and contingencies

 Total liabilities                                        6,234,100    3,485,000
                                                          ----------   ----------
 Shareholders' equity:

 Common stock $.02 par; authorized 20,000,000  shares;
 issued and outstanding- June 30,1999, 2,487,518 shares,
 and  June 30, 1998, 1,731,956 shares                        49,700       34,700

 Additional capital                                       9,758,300    9,374,100

 Accumulated deficit                                     (9,352,400)  (9,386,800)
                                                          ----------   ----------
     Total shareholders' equity                             455,600       22,000

 Total liabilities and shareholders' equity              $6,689,700   $3,507,000
                                                         ===========  ===========
</TABLE>
                  See Notes to Consolidated Financial Statements
                                    F-3
<PAGE>
<TABLE>                            HADRON, INC.
                        CONSOLIDATED STATEMENTS OF OPERATIONS
               FOR THE FISCAL YEARS ENDED JUNE 30, 1999, 1998 AND 1997
<CAPTION>
                                                       1999         1998         1997
                                                    -----------  -----------  -----------
<S>                                                 <C>          <C>          <C>
Revenues                                            $20,333,200  $21,133,900  $16,987,700
                                                    -----------  -----------  -----------
Operating costs and expenses:
  Costs of revenue                                   17,734,800   18,118,100   14,650,600
  Development  costs of HeaTreaT                                                  598,900
  Selling, general and administrative                 2,535,400    2,127,500    1,610,300
                                                    -----------  -----------  -----------
Total operating costs and expenses                   20,270,200   20,245,600   16,859,800
                                                    -----------  -----------  -----------
Operating income                                         63,000      888,300      127,900
                                                    -----------  -----------  -----------
Other income (expense):
  Interest income                                         2,600        5,500        8,100
  Interest expense                                      (80,800)     (61,700)     (92,600)
  Other income (expense)                                 63,500      (13,000)      13,500
                                                     -----------  -----------  -----------
Total other income (expense)                            (14,700)     (69,200)     (71,000)
                                                     -----------  -----------  -----------

Income before income taxes                               48,300      819,100       56,900

Provision for income taxes                               13,900       58,500       44,000
                                                     -----------  -----------  -----------

Net income                                          $    34,400  $   760,600   $   12,900
                                                    ============ ============  ===========

Per share data:

Net income per share
  Basic                                             $       .02   $       .45  $      .01
                                                    ============ ============ ===========
  Diluted                                           $       .01   $       .26  $      .01
                                                    ============ ============ ===========

Weighted average number of shares
  Basic                                               1,794,775    1,686,808    1,529,519
                                                    ============ ============ ===========
  Diluted                                             2,579,439    2,990,897    1,535,074
                                                    ============ ============ ===========
</TABLE>
                       See Notes to Consolidated Financial Statements
                                        F-4
<PAGE>
<TABLE>
                    HADRON, INC. AND SUBSIDIARIES
        CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT)
         FOR THE FISCAL YEARS ENDED JUNE 30, 1999, 1998 AND 1997
 --------------------------------------------------------------------------------------------------
 <CAPTION>
                                             Common Stock
                                           ---------------       Additional    Accumulated
                                          Shares      Amount     Capital       Deficit        Total
                                        ----------- ----------  ------------  ------------   -----------
<S>                                     <C>         <C>         <C>           <C>             <C>
 Balance - June 30, 1996                 1,503,685     $30,000  $9,260,800   ($10,160,300)    ($869,500)

   Exercise of warrants                    183,000       3,800      42,000                       45,800

   Net income                                                                     12,900         12,900
                                        ----------- ----------  -----------  ------------    -----------
 Balance - June 30, 1997                 1,686,685      33,800   9,302,800   (10,147,400)      (810,800)

   Shares purchased pursuant
    to the Employee Stock Purchase Plan     45,271         900      71,300                       72,200

   Net income                                                                   760,600         760,600
                                        ----------- ----------  ----------   ----------      -----------
 Balance - June 30, 1998                 1,731,956      34,700   9,374,100   (9,386,800)         22,000

   Shares issued to investment
    banking firm                            75,000       1,500      73,500                       75,000

   Shares purchased pursuant
    to the Employee Stock Purchase Plan     75,896       1,400      99,200                      100,600

   Exercise of warrants                    400,000       8,000      92,000                      100,000

   Shares issued upon conversion of debt   200,000       4,000     116,000                      120,000

   Exercise of options                       4,666         100       3,500                        3,600

   Net income                                                                    34,400          34,400
                                        ----------- -----------  ---------   ----------      -----------
 Balance - June 30, 1999                 2,487,518     $49,700  $9,758,300  ($9,352,400)       $455,600
                                        =========== ===========  =========  ===========      ===========
 </TABLE>
                   See Notes to Consolidated Financial Statements
                                        F-5
<PAGE>
<TABLE>
                       HADRON, INC.
           CONSOLIDATED STATEMENTS OF CASH FLOWS
  FOR THE FISCAL YEARS ENDED JUNE 30, 1999, 1998 AND 1997
--------------------------------------------------------------------------------------------------
<CAPTION>
                                                                 1999         1998         1997
                                                              -----------  -----------  -----------
<S>                                                           <S>          <S>          <S>
Cash flows from operating activities:
  Net income                                                  $   34,400   $  760,600   $   12,900
                                                              -----------  -----------  -----------
Adjustments to reconcile net income to net
    cash provided (used) by operating activities:
    Depreciation and amortization                                 97,200       34,500       73,800
    Provision for doubtful accounts receivable                   (50,000)                 (114,600)
Changes in operating assets and liabilities:
    Accounts and notes receivable                              1,818,600     (741,600)     384,200
    Prepaid expenses and other                                  (127,400)     (11,900)      24,600
    Other assets                                                 (67,100)       5,200      (10,600)
    Accounts payable                                            (254,400)    (453,400)    (419,200)
    Other current liabilities                                   (968,400)     348,900      211,700
    Other long-term liabilities                                  (13,300)       4,100        4,000
                                                              -----------  -----------  -----------
      Total adjustments                                          435,200     (814,200)     153,900
                                                              -----------  -----------  -----------
Net cash provided (used) by operating activities                 469,600      (53,600)     166,800
                                                              -----------  -----------  -----------
Cash flows from investing activities:
    Property additions                                          (121,800)     (29,600)     (94,100)
    Investment in PEI                                                         (15,900)
    Purchase of Vail and ATI, net of cash acquired              (378,700)
                                                              -----------  -----------  -----------
Net cash used by investing activities                           (500,500)     (45,500)     (94,100)
                                                              -----------  -----------  -----------
Cash flows from financing activities:
    Proceeds of borrowings on bank and other loans               850,000      796,700      711,900
    Proceeds of stock options and warrants exercised             103,600                    45,800
    Proceeds of employee stock purchase                          100,600       72,200
    Proceeds of convertible promissory notes                                               120,000
    Payments on bank and other loans                            (827,800)    (734,000)    (969,600)
                                                              -----------  -----------  -----------
Net cash provided (used) by financing activities                 226,400      134,900      (91,900)
                                                              -----------  -----------  -----------
Net increase (decrease) in cash and cash equivalents             195,500       35,800      (19,200)

Cash and cash equivalents at beginning of year                    60,500       24,700       43,900
                                                              -----------  -----------  -----------

Cash and cash equivalents at end of year                      $  256,000   $   60,500   $   24,700
                                                              ===========  ===========  ===========
</TABLE>
                   See Notes to Consolidated Financial Statements
                                    F-6
<PAGE>
                          HADRON, INC.
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. The Company:

       Hadron, Inc. ("Hadron" or the "Company") provides a broad
   range of information, management and technical services to
   businesses and federal government agencies.  The Company
   specializes in developing innovative technical solutions for the
   intelligence community, analyzing and supporting defense systems
   (including intelligent weapons systems and biological warfare
   defense), and supporting computer systems.

       Revenues  from services performed under direct  and  indirect
   long-term  contracts  and subcontracts with  government  defense,
   justice  and intelligence agencies comprise the majority  of  the
   Company's business.  The majority of the Company's technical  and
   professional  service business with governmental departments  and
   agencies is obtained through competitive procurement and  through
   "follow-up" services related to existing contracts.   In  certain
   instances,  however, the Company acquires such service  contracts
   because   of   special  professional  competency  or  proprietary
   knowledge in specific subject areas.


2. Summary of significant accounting policies:

   A. Principles of consolidation:

          The consolidated financial statements include the accounts
       of  Hadron,  Inc.  and  its  four wholly-owned  subsidiaries,
       Engineering  &  Information Services,  Inc.  ("EISI"),  SyCom
       Services, Inc. ("SyCom"), Vail Research and Technology,  Inc.
       ("Vail"),   and   Avenue   Technologies,   Inc.   ("ATI")(the
       "Company").  All  significant intercompany transactions  have
       been eliminated.

   B.  Risks and uncertainties:

          Financial instruments that potentially subject the Company
       to  concentrations of credit risk consist principally of cash
       and  cash equivalents, and accounts receivable.  The  Company
       maintains its cash and cash equivalents principally  in  four
       United  States  commercial banks. Cash  in  excess  of  daily
       requirements  is invested by the banks in one-day  repurchase
       agreements   of   securities  of  United  States   Government
       agencies.  To  date,  the  Company has  not  incurred  losses
       related to cash and cash equivalents.
<PAGE>
          The Company's accounts receivables consist principally  of
       accounts  receivable from prime contractors to  agencies  and
       departments  of  the United States Government.   The  Company
       extends  credit in the normal course of operations  and  does
       not require collateral from its customers.

          The  Company has historically been, and continues  to  be,
       heavily  dependent  upon direct and indirect  contracts  from
       various    U.S.    government   agencies.    Contracts    and
       subcontracts  with the U.S. Government are subject  to  audit
       by  audit agencies of the government.  Such audits determine,
       among   other  things,  whether  an  adjustment  of  invoices
       rendered   to  the  government  is  appropriate   under   the
       underlying  terms  of  the  contracts.  All  U.S.  government
       contracts  contain clauses that allow for the termination  of
       contracts at the convenience of the government.

          The preparation of financial statements in conformity with
       generally  accepted accounting principles requires management
       to  make  estimates and assumptions that affect the  reported
       amounts of assets, liabilities and contingent liabilities  at
       the  date  of  the  financial  statements  and  the  reported
       amounts   of  revenues  and  expenses  during  the  reporting
       periods.  Actual results could differ from those estimates.

   C.  Cash equivalents:

          Cash  equivalents  represent amounts  invested  in  highly
       liquid  short-term  investments with original  maturities  of
       three months or less.

   D.  Fixed assets:

          Furniture  and  equipment and leasehold  improvements  are
       stated  at  cost.  The Company uses the straight-line  method
       of  depreciation  and amortization over the estimated  useful
       lives  of  the furniture and equipment (principally three  to
       ten   years)   and   over  the  lease  term   for   leasehold
       improvements, if shorter.

          Maintenance and repairs are charged to expense as
       incurred,  and  the  cost of additions  and  betterments  are
       capitalized.  When assets are retired or sold, the  cost  and
       related   accumulated  depreciation  are  removed  from   the
       accounts and the gain or loss is included in operations.
<PAGE>
          Purchased software is capitalized at cost.  Such costs are
       amortized using the straight-line method for a period  of  up
       to five years.

   E.  Goodwill:

          Goodwill is amortized using the straight-line method for a
       period of seven years.

   F.  Accounting for contracts:

          Revenues  on  time and material contracts are recorded  at
       the  contracted  rates as the labor hours  and  out-of-pocket
       expenses  are incurred.  Revenues from fixed-price and  cost-
       plus-fixed-fee  contracts  are  generally  recorded  on   the
       percentage-of-completion   method,    determined    by    the
       percentage that incurred costs bear to estimated total  costs
       or  on  engineering estimates.  As soon as it  is  determined
       that it is probable a contract will result in a loss and  the
       loss  can be reasonably estimated, the entire estimated  loss
       is charged to operations.

          In  accordance with industry practice, accounts receivable
       relating  to  long-term contracts are classified  as  current
       assets  although an indeterminable portion of  these  amounts
       is not expected to be realized within one year.

   G.  Income taxes:

          Deferred  tax liabilities and assets are determined  based
       on  the  difference between the financial statement  and  tax
       bases  of  assets and liabilities using enacted tax rates  in
       effect for the year in which the differences are expected  to
       reverse.

   H.  Stock-based compensation:

          The  Company  grants stock options for a fixed  number  of
       shares to employees with an exercise price equal to the  fair
       value  of  the shares at the date of the grant.  The  Company
       accounts  for  stock  option grants in  accordance  with  APB
       Opinion  No.  25, "Accounting for Stock Issued to Employees",
       and  accordingly recognizes no compensation expense  for  the
       stock option grants.
<PAGE>
   I.  Reclassifications:

          Certain  fiscal  year  1998 and  1997  amounts  have  been
       reclassified   to   conform   to   the   fiscal   year   1999
       presentation.


   J.   Recent accounting pronouncements:

           Effective  January  1,  1998,  the  Company  adopted  the
       Financial   Accounting   Standards   Board's   Statement   of
       Financial  Accounting Standards No. 131,  "Disclosures  about
       Segments   of   an   Enterprise  and   Related   Information"
       (Statement 131). Statement 131 superseded FASB Statement  No.
       14,   "Financial  Reporting  for  Segments  of   a   Business
       Enterprise."   Statement 131 establishes  standards  for  the
       way  that  public  business  enterprises  report  information
       about  operating segments in annual financial statements  and
       requires  that those enterprises report selected  information
       about   operating  segments  in  interim  financial  reports.
       Statement   131  also  establishes  standards   for   related
       disclosures  about  products and services, geographic  areas,
       and  major customers.  The adoption of Statement 131 did  not
       affect  results of operations or financial position, but  did
       affect the disclosure of segment information.
<PAGE>
<TABLE>
3. Accounts receivable:

       The components of accounts receivable are as follows:
<CAPTION>
                                               June 30,
                                   ----------------------------
                                        1999             1998
                                   ------------     -----------
<S>                                <C>              <C>
   Trade accounts receivable:
   U.S. Government:
   Amounts billed                  $  1,640,800     $ 1,170,600
   Recoverable costs and
     profits - not billed             1,247,400         793,300
                                   ------------     -----------
     Total                            2,888,200       1,963,900
                                   ------------     -----------
   Commercial, state and local
     governments:
   Amounts billed                       555,200       1,015,700
   Recoverable costs and
     profits - not billed               306,000         374,100
                                   ------------     -----------
     Total                              861,200       1,389,800

   Total accounts receivable          3,749,400       3,353,700

   Less allowance for doubtful
    accounts                           (253,700)       (209,800)
                                   ------------     ------------
   Total accounts receivable, net   $ 3,495,700     $ 3,143,900
                                   ============     ============
</TABLE>
<PAGE>
<TABLE>

          The  following table summarizes activity in the  allowance
    for doubtful accounts:
<CAPTION>
                                Fiscal Year ended June 30,
                                1999       1998       1997
                              --------   --------   --------
<S>                           <C>        <C>        <C>
   Beginning Balance          $209,800   $158,800   $648,800

       Additions                93,900     51,000

       Deletions               (50,000)             (490,000)
                              ---------  --------   ---------
   Balance at end of year     $253,700   $209,800   $158,800
                              =========  ========   =========
</TABLE>

          The   amount  of  customer  retentions  included  in  U.S.
   Government accounts receivable-not billed is $18,400 and  $17,500
   at June 30, 1999 and 1998, respectively.

          Unbilled   accounts  receivable  can  be   invoiced   upon
   completion  of  contractual  billing  cycles,  attaining  certain
   milestones  under fixed-price contracts, attaining  a  stipulated
   level  of  effort on cost-type contracts for government agencies,
   upon  completion of federal government overhead audits  and  upon
   final approval of design plans for engineering services.

          In  December 1997, ATI received a Stop Work Order  from  a
   Department  of  Defense agency.  The contract was terminated  for
   convenience.  The Company has submitted a termination  claim  for
   approximately  $419,000, representing the costs incurred  by  the
   Company   and  its  subcontractors.   The  U.S.  Government   has
   questioned  certain  of  the  costs submitted.   Discussions  are
   ongoing  for  the resolution of the final claim amounts.   It  is
   reasonably  possible  that  a lesser amount  could  be  received.
   However,  this claim has been recorded at its expected realizable
   amount.   The  Company believes that a resolution  of  the  claim
   will not have a material adverse financial impact.
<PAGE>
4.   Fixed assets:
<TABLE>
       The components of fixed assets are as follows:
<CAPTION>
                                                June 30,
                                      ----------------------------
                                        1999             1998
                                      ------------    ------------
<S>                                   <C>             <C>
     Computer hardware and
       software                       $   579,800     $   400,500
     Office equipment                     188,400         136,700
                                      ------------    ------------
     Total fixed assets                   768,200         537,200

     Less accumulated depreciation
       and amortization                 ( 477,300)      ( 420,900)
                                      ------------    ------------
     Total fixed assets, net         $    290,900      $  116,300
                                     =============    ============
</TABLE>

5.  Debt:

         During fiscal year 1997, the Company prepaid $25,000  of  a
   Convertible  Promissory Note due from the  Company  to  Dr.  C.W.
   Gilluly,  and  pursuant  to  its  terms  and  conditions,  issued
   warrants  to  Dr.  Gilluly  to  acquire  100,000  shares  of  the
   Company's common stock.

         On  April  21,  1997,  Dr.  Gilluly  sold  $25,000  of  the
   Convertible  Promissory  Note to five officers  of  the  Company.
   Concurrently, the Company elected to prepay the $25,000 of  Notes
   held  by the officers, and in accordance with terms of the Notes,
   issued warrants to the officers to acquire 100,000 shares of  the
   Company's common stock.  The officers exercised the warrants  and
   acquired  the 100,000 shares at the Conversion Price of $.25  per
   share.

          In  June 1997, the Company prepaid its $225,000 Promissory
   Note  to Dr. Gilluly.  Under the terms of the original Promissory
   Note  dated October 21, 1993, which had been extended and amended
   as  of April 21, 1997, the Company issued 900,000 warrants, which
   expire  on  October  21,  2003, to Dr.  Gilluly  to  acquire  the
   Company's  common stock ("Common Stock") at $.25 per  share.   In
   June  1999,  Dr.  Gilluly exercised warrants to  acquire  400,000
   shares of the Company's common stock at a purchase price of  $.25
   per share.
<PAGE>
          Certain  members of the Company's management or  Board  of
   Directors (the "Investors") each agreed to invest $24,000 in  the
   Company  in the form of five separate two-year promissory  notes,
   the  principal of which is convertible at $.60 per share at  each
   of  his  or her respective option, into restricted shares of  the
   Company's  common stock.  In June 1999, the Investors elected  to
   convert their notes into restricted shares.

        As part of the purchase of Vail, the Company issued two non-
   interest  bearing  promissory notes  of  $300,000  and  $100,000,
   respectively.  The $300,000 non-interest bearing note,  which  is
   based  upon  the collection of Vail's accounts receivable,  shall
   be  payable  each  month  in the amount  of  $25,000  for  twelve
   months.   As of June 30, 1999, $136,000 has been paid and $14,000
   offset  due  to post-closing adjustments, leaving an  outstanding
   note  balance of $150,000.  The $100,000 non-interest  promissory
   note  is  due  and  payable on the two-year  anniversary  of  the
   closing  date,  less  permitted deductions taken  for  contingent
   liabilities and uncollected accounts receivable.

         The  Company  entered  into a Loan and  Security  Agreement
   dated  June  29, 1999 (the "Loan Agreement") among  the  Company,
   United  Bank and each of the Company's wholly owned subsidiaries,
   ATI,  Vail,  SyCom,  and EISI.  The Loan Agreement  provides  the
   Company  with  a  one-year $1.5 million line of  credit  facility
   (the  "Credit Facility") and a three-year $1.5 million term  loan
   (the "Term Loan").  Interest on each of the facilities is at  the
   prime rate plus 150 basic points.  Dr. Gilluly and his wife  have
   personally guaranteed the Term Loan.

         The  Company  is  subject  to certain  financial  covenants
   pursuant  to  the  Loan Agreement, including debt  to  net  worth
   ratio,  debt to EBITDA ratio, and working capital and  net  worth
   requirements.

         The Credit Facility replaces the Company's previous line of
   credit  with Century National Bank.  Proceeds from the Term  Loan
   were  used  to  repay  the Company's $1.5 million  in  short-term
   notes that were issued in connection with the Company's May  1999
   acquisition   of  ATI.   The  Term  Loan  provides  for   monthly
   principal payments of $42,000, plus interest.
<PAGE>
         The  Term Loan and the Credit Facility are secured  by  the
   accounts  receivable  and  other  assets  of  the  Company.    In
   addition,   the  3-year  $998,000  convertible  notes,   interest
   payable  at  6%, issued by the Company to the former shareholders
   of  ATI in connection with the Company's acquisition of ATI  were
   subordinated  to the Company's obligations under  the  Term  Note
   and  the Credit Facility.  The notes are convertible into 444,000
   shares of the Company's Common Stock at $2.25 per share.

<TABLE>
         The  Company's future debt maturites at June 30,  1999  are
   summarized below:
<CAPTION>
                                        Debt
   Fiscal Year                        Maturities
   -----------                        -----------
<S>                                   <C>
   2000                               $1,288,800
   2001                                  500,000
   2002                                1,597,800
                                      -----------
    Total minimum debt payments        3,386,600

    Less:  current maturities         (1,288,800)
                                      -----------
    Total long-term debt              $2,097,800
                                      ===========
</TABLE>

6. Other current liabilities:
<TABLE>
         Other  current  liabilities  include  the  following  major
   classifications:
<CAPTION>
                                              June 30,
                                    ----------------------------
                                        1999            1998
                                    -----------      -----------
<S>                                 <C>              <C>
   Payroll and related taxes        $   855,900      $   850,800
   Accrued vacation                     543,800          498,900
   Accrued bonuses                                       159,200
   Self-insured medical expense         165,300          275,700
   Due to subcontractors                143,900          134,900
   Other                                158,900          363,200
                                    -----------      -----------
   Total                            $ 1,867,800      $ 2,282,700
                                    ===========      ===========
</TABLE>
<PAGE>
7.   Acquisitions:

          Effective  December  18, 1998, the Company  acquired  Vail
     Research  and Technology Corporation ("Vail"), a privately-held
     information  technology  firm  based  in  Annandale,  VA,   for
     approximately  $1,580,000.   Vail operates  as  a  wholly-owned
     subsidiary of Hadron. The purchase price was satisfied  with  a
     net  payment of $1,180,000 and the issuance of two non-interest
     bearing  promissory  notes  in  the  amounts  of  $300,000  and
     $100,000  payable  to  Jeannine Mantz.   Ms.  Mantz,  the  sole
     stockholder  of  Vail,  is President of Vail,  in  addition  to
     holding a corporate vice-president position at Hadron.

          The  fair  value  of  the assets and liabilities  acquired
     approximated  their  book  value of  $1,833,000  and  $121,000,
     respectively.   The  Company  incurred  financial,  legal   and
     accounting   costs  associated  with  the  Vail   purchase   of
     approximately  $55,000.  Included in these fees was  a  $25,000
     payment  made  to  a  Hadron director,  John  D.  Sanders,  for
     advisory services in connection with the purchase.

          On   May  12,  1999,  the  Company  acquired  all  of  the
     outstanding capital stock of Avenue Technologies, Inc. ("ATI"),
     a   privately  held  information  technology  firm   based   in
     Alexandria, VA, for $2,503,000, consisting of $27,000 in  cash,
     $1,478,000  in  short  term promissory notes  and  $998,000  in
     convertible  notes.  The acquisition was effected  pursuant  to
     the  terms  of  a Stock Purchase Agreement dated May  12,  1999
     among  the  Company,  ATI and Six Nations, Inc.,  the  majority
     stockholder of ATI.

          The  fair  value  of  the assets and liabilities  acquired
     approximated  their  book value of $1,459,000  and  $1,161,000,
     respectively.   The  Company  incurred  financial,  legal   and
     accounting   costs  associated  with  the   ATI   purchase   of
     approximately $129,000, of which $69,000 was paid  in  cash  at
     closing.  Included in these fees was a $25,000 payment made  to
     a  Hadron employee for advisory services in connection with the
     purchase.   Resulting from the acquisition of ATI, the  Company
     recorded  goodwill of approximately $2,287,000, which  will  be
     amortized  over  a  7-year  period.  Goodwill  amortization  of
     $41,000 was recorded in fiscal year 1999.

          In   conjunction  with  the  acquisition,  Dr.  Howard  C.
     Whetzel,  Chairman  of  ATI,  joined  the  Company's  Board  of
     Directors.
<PAGE>
          The  following  table  sets  forth  proforma  results   of
     operations of the Company for the fiscal years ended  June  30,
     1999 and 1998, as if Vail and ATI had been acquired on July  1,
     1997.
<TABLE>
                      Fiscal year ended   Fiscal year ended
                        June 30, 1999       June 30, 1998
                      -----------------   -----------------
<S>                     <C>                 <C>
   Net revenues         $27,780,200         $36,211,600

   Net income (loss)       (716,300)            391,300

   Net income
    (loss) per share:

   Basic                       (.40)                .23

   Diluted                     (.40)                .13
</TABLE>

8. Net income per share:
<TABLE>
       The  following table sets forth the computation of basic  and
   diluted earnings per share:
<CAPTION>

                                    1999         1998         1997
                                  ---------   -----------   ---------
<S>                               <C>         <C>           <C>
 Numerator:
  Net income                      $  34,400   $   760,600    $ 12,900

 Effect of dilutive securities:
  Convertible debt                                 12,000         300
                                  ---------   -----------   ---------
 Numerator for diluted earnings
  per share - income available
  to common shareholders after
  assumed conversion              $  34,400   $   772,600    $ 13,200
                                  =========   ===========   =========
 Denominator:
  Denominator for basic
   earnings per share:
   weighted average shares
   outstanding                    1,794,775     1,686,808   1,529,519

  Effect of dilutive securities:
   Warrants                         527,738       855,064
   Employee stock options           256,926       249,025
   Convertible debt                               200,000       5,555
                                  ---------   -----------   ---------
<PAGE>
 Denominator for diluted
  earnings per share              2,579,439     2,990,897   1,535,074
                                  =========   ===========   =========
 Basic earnings per share         $     .02     $     .45   $     .01
                                  =========   ===========   =========
 Diluted earnings per share       $     .01     $     .26   $     .01
                                  =========   ===========   =========
</TABLE>

       Shares  issuable  upon  the  exercise  of  stock  options  or
   warrants  or upon conversion of debt have been excluded from  the
   computation  to  the extent that their inclusion would  be  anti-
   dilutive.


  9.   Income taxes:

       The  provision for income taxes for the years ended June  30,
   1999, 1998 and 1997 is for state income taxes currently due.

      The  tax provision differs from the amounts computed using the
   statutory federal income tax rate as follows:
<TABLE>
                                1999         1998         1997
                               -------     --------     --------
<S>                            <C>         <C>         <C>
   Tax expense at
    statutory rate - federal      35%          35%           35%
   State tax expense
    net of federal taxes          29            7            77

   Permanent differences          38
   Utilization of net
     Operating loss
     carryforwards               (73)         (35)          (35)
                               -------     --------     ---------
   Tax expense at
     actual rate                  29%           7%           77%
                               =======     ========     =========
</TABLE>

       Deferred  income  taxes  reflect  the  net  tax  effects   of
   temporary differences between the carrying amounts of assets  and
   liabilities  for  financial reporting and  income  tax  purposes.
   Deferred  tax assets at June 30, 1999 and 1998 consist  primarily
   of  temporary  differences from net operating loss  carryforwards
   of  approximately $2,100,000 and $1,920,000, respectively, and  are
   fully reserved.

       The  Company  has net operating loss (NOL) carryforwards  for
   federal  and  state purposes available to offset  future  taxable
   income  of  approximately $ 4,500,000 as of June 30,  1999.  These
   NOL carryforwards expire at various dates through June 30,2009.
<PAGE>

   10.  Commitments and contingencies:

   Operating leases:

       The  Company leases real property and personal property under
   various   long-term  operating  leases  and  sublease  agreements
   expiring  at various dates through fiscal year 2003.  Certain  of
   the  leases  contain  renewal  options  and  require  payment  of
   property  taxes, insurance and maintenance costs.  The  Company's
   future  minimum operating lease commitments inclusive of property
   taxes,  insurance  and maintenance costs at  June  30,  1999  are
   summarized below:
<TABLE>
       Fiscal Year Ending             Lease
             June 30,              Commitments
       ------------------         ------------
<S>                               <C>
        2000                         $ 538,800
        2001                           555,400
        2002                           491,900
        2003                           182,300
                                  ------------
 Total minimum payments required    $1,768,400
                                  ============
</TABLE>

       Rent  expense,  net  of  sublease  income,  included  in  the
   consolidated statements of operations is as follows:
<TABLE>
                                Rent
               Period          Expense
          ----------------   ----------
<S>                          <C>
          Fiscal Year 1999   $  235,700
          Fiscal Year 1998   $  141,800
          Fiscal Year 1997   $  114,600
</TABLE>

     U.S. Government contract audits:

         The  Company's revenues and costs related to contracts with
   the  agencies and departments of the U.S. Government are  subject
   to  audit  by  the  Defense  Contract  Audit  Agency,  which  has
   completed  the  majority of its audits for the  Company's  fiscal
   years  through fiscal year 1994.  It is the opinion of management
   that  the results of such audits will not have a material  effect
   on  the  financial  condition or results  of  operations  of  the
   Company.


11. Employee savings plan:

         The  Company  sponsors a defined contribution savings  plan
   under   section  401(k)  of  the  Internal  Revenue  Code.    The
   Company's  contributions to the 401(k)  plan  are  based  upon  a
   percentage    of    employee   contributions.    The    Company's
   discretionary  contributions to the Plan were $147,000,  $101,500
   and $18,000 for fiscal years 1999, 1998 and 1997, respectively.
<PAGE>

12. Stock option plan:

         Under  the  Company's 1994 Stock Option Plan,  as  amended,
   (the  "Plan"),  shares of its common stock may be issued  to  key
   employees,  consultants and directors.  In fiscal year  1998,  an
   amendment  to the 1994 Stock Option Plan was adopted to  increase
   the  number  of  shares  reserved for  issuance  thereunder  from
   345,000  to 645,000.  The Plan provides for both incentive  stock
   options  within  the  meaning  of Section  422  of  the  Internal
   Revenue  Code  and  non-qualified stock  options.   The  exercise
   price  of the incentive stock options is required to be at  least
   equal  to  100% of the fair market value of the Company's  common
   stock on the date of grant (110% of the fair market value in  the
   case  of  options granted to employees who are 10% shareholders).
   The  options  vest  in three equal annual installments  beginning
   with  the date of grant.  The exercise price of the non-qualified
   stock options is required to be not less than the par value of  a
   share of the Company's common stock on the date of grant.

         Information  with  respect to incentive  and  non-qualified
   stock options issued under the Plan is as follows:
<TABLE>
                            1999                1998                  1997
                      ----------------   ------------------     ----------------
<CAPTION>
                               Weighted           Weighted              Weighted
                               Average            Average               Average
                               Exercise           Excercise             Exercise
                      Shares   Price     Shares   Price         Shares  Price
                      -----------------  ------------------     ----------------
<S>                   <C>       <C>      <C>      <C>          <C>      <C>
Outstanding at
 Beginning of year    398,068   $ .59    315,500  $ .49        220,500   $ .36
Granted               135,400    1.98     87,100    .98        117,500     .73
Exercised              (4,666)    .76                           (3,000)    .25
Expired               (14,402)   1.69     (4,532)   .88        (19,500)    .35
                      ----------------------------------------------------------
 Outstanding at
 End of year          514,400   $ .90    398,068  $ .59        315,500   $ .49
                      ==========================================================
Options exercisable
 At year-End          404,740   $ .69    305,374  $ .50        213,829   $ .39

Weighted average
Fair value of
Options granted
During the year         $1.25             $  .94          $  .44

</TABLE>
         The  weighted average remaining contractual life of options
   outstanding  at  June  30,  1999 was 7.3  years.   The  range  of
   exercise prices of options outstanding at June 30, 1999 was  $.25
   to $1.99.
<PAGE>
        During fiscal year 1997, the Company adopted the disclosure-
   only  provisions  of Statement of Financial Accounting  Standards
   No. 123, "Accounting for Stock Compensation" (SFAS No. 123).  Had
   compensation  cost  for  the Company's  stock  option  plan  been
   determined based upon the fair value at the grant date for awards
   under  the plan consistent with the methodology prescribed  under
   SFAS  No.  123, the Company's net income/(loss) in  fiscal  years
   1999,  1998  and  1997  would have been approximately  $(69,200),
   $700,200 and $(19,100), or $(.04), $.25 and $(.01) per share on a
   diluted basis, respectively.  The effect of applying SFAS No. 123
   on  1999, 1998 and 1997 pro forma net income/loss as stated above
   is  not necessarily representative of the effects on reported net
   income  or loss for future years due to, among other things,  (1)
   the vesting period of the stock options and (2) the fair value of
   additional stock options in future years.


        The fair value of each option grant is estimated on the date
   of grant using the Black-Scholes option-pricing fair value model.
   The  following weighted-average assumptions were used for grants:
   dividend  yield  of  0%; expected volatility  of  .43  to   1.22;
   expected  life of the option term of 7 to 10 years and  risk-free
   interest rate of 5.5% to 6.9% for the years 1999, 1998 and 1997.


13. Employee stock purchase plan:

          In  December 1997, shareholders approved the Hadron,  Inc.
    1997 Employee Stock Purchase Plan (the "Plan").  The purpose  of
    the  Plan is to secure for the Company and its shareholders  the
    benefits  of the incentive inherent in the ownership  of  Common
    Stock by present and future employees of the Company.  The  Plan
    is  intended  to  comply with the terms of Section  423  of  the
    Internal  Revenue Code of 1986, as amended, and  Rule  16b-3  of
    the   Securities  Exchange  Act  of  1934.   The  Plan  is  non-
    compensatory  as  defined by APB 25.  Under  the  terms  of  the
    Plan,  individual  employees may  pay  up  to  $10,000  for  the
    purchase  of  the  Company's  common  shares  at  85%   of   the
    determined  market  price.  During fiscal year  1999  and  1998,
    employees    paid    approximately   $100,600    and    $72,200,
    respectively, for the purchase of common stock under the Plan.


14. Employee deferred compensation plan:

        In  December  1998, shareholders approved the  Hadron,  Inc.
    Deferred  Compensation Plan (the "Plan").  The Plan is  intended
    to  provide  employees an option to defer  a  portion  of  their
    salary   in   order  to  provide  for  supplemental   retirement
    benefits.    As  a  requirement  of  this  non-qualified   plan,
    participant   deferrals  remain  as  unsecured  liabilities   of
    Hadron.   Under  the terms of the Plan, eligible  employees  can
    elect  to  irrevocably defer salary of up  to  $50,000  for  the
    calendar year.  If an employee elects to defer at least one  and
    one-half   percent   of  his/her  gross  salary,   the   Company
    contributes  one-half percent of the participant's gross  salary
    to  the  participant's supplemental account.   Salary  deferrals
<PAGE>

    and  Company  contributions earn interest at the higher  of  six
    percent  or  the  rate  quoted  for ninety-day  Treasury  Bills.
    During   fiscal  year  1999,  employees  deferred  approximately
    $75,000 of which the Company matched $4,000.


15. Related party transactions:

        AMASYS  Corporation  ("AMASYS"),  a  publicly  held  company
    beneficially  owns  202,739 shares, or  12%,  of  the  Company's
    outstanding common stock.  Dr. C.W. Gilluly is Chairman  of  the
    Board  and Chief Executive Officer of the Company and of AMASYS.
    Dr.  Gilluly  has  warrants to acquire beneficial  ownership  of
    620,000  shares of common stock.  Dr. Gilluly also owns  options
    to   acquire  72,000  shares  of  the  Company's  common  stock.
    Exercise  of Dr. Gilluly's warrants and options at a  subsequent
    date  may  result  in a change of control in the  Company.   Mr.
    Robert  Lynch, an independent outside director of  the  Company,
    is  also a director of AMASYS.  Dr. Gilluly is also Chairman  of
    the   Board   of  Directors  of  Comtex  Scientific  Corporation
    ("Comtex").  AMASYS holds a majority interest in Comtex.


 16. Fair value of financial instruments:

          Accounts  receivable, accounts payable,  accrued  expenses
    and  other current assets and liabilities are carried at amounts
    which  reasonably approximate their fair value.   The  estimated
    fair value of the Company's variable rate debt approximates  its
    carrying  value  of  $2,138,800.   It  is  not  practicable   to
    estimate  the  fair  value  of the Company's  notes  payable  to
    related  parties  and  convertible notes payable  due  to  their
    unique nature.


17. Statement of cash flows - supplemental disclosures:

        During  fiscal years 1999, 1998 and 1997, the  Company  paid
    income  taxes  of  $57,000, $76,000 and  $40,000,  respectively.
    The  Company  paid  interest  of $51,000,  $55,000  and  $54,000
    during those same periods.

<PAGE>
18. Business segments and major customers:

    Business segments:

        The  Company  has four reportable segments,  comprising  its
    individual operating subsidiaries - EISI, SyCom, Vail  and  ATI.
    Each   of   the  operating  subsidiaries  performs  within   the
    Company's one industry segment, providing engineering,  computer
    support  services  and  other professional  technical  services.
    The  reportable  segments are distinguished by their  individual
    clients,  prior  experience  and  technical  skills  within  the
    industry segment.

          Each  of  the reportable segments has a president  who  is
    responsible  for the operating results.  Operating  results  are
    measured  at  the  net  income  level  for  each  segment.   The
    accounting policies of the reportable segments are the  same  as
    those   described  in  the  summary  of  significant  accounting
    policies.   Interest  on  debt incurred in  connection  with  an
    acquisition  and applicable associated goodwill amortization  is
    charged  to  the  reportable segment.  The  Company's  corporate
    amounts  consist primarily of certain activities and assets  not
    attributable to the reportable segments.
<TABLE>
                            Hadron, Inc.
              Reportable Segments - FASB Statement 131
       For the Fiscal Years Ended June 30, 1999, 1998 and 1997
       -------------------------------------------------------
<CAPTION>
          DESCRIPTON:             1999            1998            1997
                                -----------     -----------     -----------
<S>                           <C>             <C>             <C>
    Trade revenues:
      EISI                    $  10,989,600    $ 12,023,100    $  9,418,900
      SyCom                       8,112,800       9,066,800       7,514,800
      Vail                          551,800
      ATI                           643,300
      Corporate                      35,700          44,000          54,000
                              -------------   -------------   -------------
    Total trade revenues      $  20,333,200    $ 21,133,900    $ 16,987,700
                              =============   =============   =============

    Interest income:
      SyCom                   $                $      5,500    $      6,200
      Vail                            2,400
      ATI                               200
      Corporate                                                       1,900
                             --------------   --------------   -------------
    Total interest income     $       2,600    $      5,500    $      8,100
                             ==============   ==============   =============
<PAGE>

    Interest expense:
      EISI                    $                $    (10,100)   $
      SyCom                           4,100           4,100           4,100
      ATI                            25,600
      Corporate                      51,100          67,700          88,500
                             --------------   -------------   -------------
    Total interest expense    $      80,800    $     61,700    $     92,600
                             ==============   =============   =============

    Depreciation and
    amortization expense:
      EISI                    $       3,100    $      8,400    $     17,000
      SyCom                           4,500           9,600          45,100
      ATI                            40,800
      Corporate                      48,800          16,500          11,700
                             --------------   -------------   -------------

    Total depreciation and
      amortization expense    $      97,200    $     34,500    $     73,800
                             ==============   =============   =============

    Income tax expense:
      EISI                     $     23,700    $     56,700    $     44,000
      ATI                           (10,700)
      Corporate                         900           1,800
                             --------------   -------------   -------------
    Total income tax
    expense                   $      13,900    $     58,500    $     44,000
                             ==============   =============   =============

    Net income/(loss):
      EISI                    $    332,200     $    734,900    $    636,900
      SyCom                       (136,600)         112,000        (575,800)
      Vail                         (37,000)
      ATI                          (55,600)
      Corporate                    (68,600)         (86,300)        (48,200)
                             --------------   --------------   -------------
    Total net income          $     34,400     $    760,600    $     12,900
                             ==============   ==============   =============

    Assets:
      EISI                     $  1,135,700    $  1,751,400    $  1,075,400
      SyCom                         612,100       1,163,700       1,042,500
      Vail                          868,500
      ATI                         3,594,400
      Corporate                     479,000         591,900         594,000
                             --------------   -------------   --------------
    Total assets              $   6,689,700    $  3,507,000    $  2,711,900
                             ==============   =============   ==============
<PAGE>
    Fixed assets, net:
      EISI                    $       8,500    $     11,600    $     13,900
      SyCom                             300           4,900          19,300
      Vail                            4,000
      ATI                           102,000
      Corporate                     176,100          99,800          49,600
                             --------------   -------------   -------------
    Total fixed assets        $     290,900   $     116,300    $     82,800
                             ==============   =============   =============
</TABLE>

    Major Customers:

        Gross  revenue  from  contracts and subcontracts  with  U.S.
    government  agencies  amounted to $12,300,000,  $11,628,000  and
    $9,101,000, respectively, in fiscal years 1999, 1998 and 1997.

        Revenues  from  one commercial customer totaled  $8,103,000,
    $9,067,000  and  $7,424,000 in the fiscal years 1999,  1998  and
    1997, respectively.

          Revenues  earned on sales to the Company's major customers
     are as follows:

<TABLE>
                         Department   Commercial
                         of Defense    Customer
                        -----------  -----------
<S>                     <C>          <C>
     Fiscal Year 1999   $ 9,723,000  $8,103,000
     Fiscal Year 1998    10,242,000   9,067,000
     Fiscal Year 1997     7,508,000   7,424,000

</TABLE>

<PAGE>