<PAGE>
                       SECURITIES AND EXCHANGE COMMISSION
 
                             WASHINGTON, D.C. 20549
                            ------------------------
 
                                   FORM 10-Q
 
(Mark One)
 
          /X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE
                        SECURITIES EXCHANGE ACT OF 1934.
 
                 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1998.
 
                             ---------------------
 
OR
 
          / / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
                           SECURITIES EXCHANGE ACT OF 1934.
 
               FOR THE TRANSITION PERIOD FROM           TO           .
 
                                       0-22601
                               (Commission file number)
 
                                     AXIOM INC.
                (Exact Name of Registrant as Specified in Its Charter)
 
<TABLE>
<CAPTION>
                  DELAWARE                                      51-0356153
<S>                                            <C>
(State or Other Jurisdiction of Incorporation      (IRS Employer Identification Number)
              or Organization)
</TABLE>
 
                              351 NEW ALBANY ROAD,
                           MOORESTOWN, NJ 08057-1177
 
              (Address of Principal Executive Offices) (Zip Code)
 
                                 (609) 866-1000
              (Registrant's Telephone Number, Including Area Code)
 
    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 THE NUMBER OF SHARES OUTSTANDING OF EACH OF THE ISSUER'S CLASSES OF
COMMON STOCK, AS OF THE LATEST PRACTICABLE DATE.
 
    6,466,900 SHARES OF COMMON STOCK, PAR VALUE $.01 PER SHARE, WERE OUTSTANDING
ON MAY 14, 1998
<PAGE>
                          AXIOM INC. AND SUBSIDIARIES
 
                                     INDEX
 
<TABLE>
<CAPTION>
                                                                                                               PAGE
                                                                                                            -----------
<S>                                                                                                         <C>
Part I--Financial Information:
 
  Item 1. Consolidated Financial Statements (unaudited)
 
    Consolidated Balance Sheets--March 31, 1998 (unaudited) and September 30, 1997........................           3
    Consolidated Statements of Operations--Three and Six Months Ended March 31, 1998 and 1997
     (unaudited)..........................................................................................           4
    Consolidated Statements of Cash Flows--Six Months Ended March 31, 1998 and 1997 (unaudited)...........           5
    Notes to Consolidated Financial Statements (unaudited)................................................           6
 
  Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations...........          13
 
Part II--Other Information:
 
  Item 1. Legal Proceedings...............................................................................          18
 
  Item 2. Changes in Securities...........................................................................          18
 
  Item 3. Defaults Upon Senior Securities.................................................................          18
 
  Item 4. Submission of Matters to a Vote of Security Holders.............................................          18
 
  Item 5. Other Information...............................................................................          19
 
  Item 6. Exhibits and Reports on Form 8-K................................................................          19
</TABLE>
 
        (a) Exhibits
 
        (b) Reports on Form 8-K
 
                                       2
<PAGE>
PART I. FINANCIAL INFORMATION
 
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS
 
                          AXIOM INC. AND SUBSIDIARIES
 
                          CONSOLIDATED BALANCE SHEETS
 
                       (IN THOUSANDS, EXCEPT SHARE DATA)
 
                                  (UNAUDITED)
 
<TABLE>
<CAPTION>
                                                                                         MARCH 31,    SEPTEMBER 30,
                                                                                           1998           1997
                                                                                       -------------  -------------
<S>                                                                                    <C>            <C>
                                       ASSETS
 
CURRENT ASSETS:
  Cash and cash equivalents..........................................................    $   6,172      $   7,206
  Accounts receivable................................................................       10,643         14,241
  Inventories........................................................................        6,234          7,374
  Deferred tax assets................................................................          841            630
  Income tax receivable..............................................................        1,485            968
  Other..............................................................................          744            473
                                                                                       -------------  -------------
    Total current assets.............................................................       26,119         30,892
                                                                                       -------------  -------------
PROPERTY AND EQUIPMENT:
  Computer hardware and software.....................................................        3,883          3,229
  Production and test equipment......................................................        2,294          1,995
  Furniture, fixtures and leasehold improvements.....................................          600            553
                                                                                       -------------  -------------
                                                                                             6,777          5,777
  Less--Accumulated depreciation and amortization....................................       (3,572)        (2,785)
                                                                                       -------------  -------------
    Net property and equipment.......................................................        3,205          2,992
DEFERRED TAX ASSETS..................................................................        3,968          2,704
OTHER ASSETS.........................................................................          502            267
INTANGIBLE ASSETS, net...............................................................          282            168
                                                                                       -------------  -------------
                                                                                         $  34,076      $  37,023
                                                                                       -------------  -------------
                                                                                       -------------  -------------
 
                        LIABILITIES AND STOCKHOLDERS' EQUITY
 
CURRENT LIABILITIES:
  Current portion of long-term debt..................................................    $     160      $     147
  Obligations to parent and affiliates...............................................           25            183
  Accounts payable...................................................................        1,779          3,057
  Accrued compensation and related benefits..........................................        1,028          1,066
  Accrued agent commissions..........................................................          496            638
  Other accrued expenses.............................................................        1,568            613
  Deferred tax liabilities...........................................................           29             33
  Deferred revenues..................................................................        2,818          1,413
                                                                                       -------------  -------------
    Total current liabilities........................................................        7,903          7,150
                                                                                       -------------  -------------
 
LONG-TERM LIABILITIES:
  Deferred tax liabilities...........................................................          212            186
  Long-term debt.....................................................................           40         --
                                                                                       -------------  -------------
    Total long-term liabilities......................................................          252            186
                                                                                       -------------  -------------
COMMITMENTS AND CONTINGENCIES (Note 8)
 
STOCKHOLDERS' EQUITY:
  Preferred stock, $0.01 par value, 5,000,000 shares authorized, no shares issued and
    outstanding......................................................................       --             --
  Common stock, $0.01 par value, 25,000,000 shares authorized, 6,466,900 shares
    issued and outstanding...........................................................           65             65
  Additional paid-in capital.........................................................       32,340         32,340
  Accumulated deficit................................................................       (6,482)        (2,718)
  Cumulative translated adjustment...................................................           (2)        --
                                                                                       -------------  -------------
    Total stockholders' equity.......................................................       25,921         29,687
                                                                                       -------------  -------------
                                                                                         $  34,076      $  37,023
                                                                                       -------------  -------------
                                                                                       -------------  -------------
</TABLE>
 
        The accompanying notes are an integral part of these statements.
 
                                       3
<PAGE>
                          AXIOM INC. AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)
                                  (UNAUDITED)
 
<TABLE>
<CAPTION>
                                                            FOR THE THREE MONTHS   FOR THE SIX MONTHS
                                                              ENDED MARCH 31,       ENDED MARCH 31,
                                                            --------------------  --------------------
<S>                                                         <C>        <C>        <C>        <C>
                                                              1998       1997       1998       1997
                                                            ---------  ---------  ---------  ---------
REVENUES:
  Equipment...............................................  $   4,034  $   5,794  $   8,782  $   8,847
  Services................................................      2,262      1,475      4,442      3,203
                                                            ---------  ---------  ---------  ---------
    Total revenues........................................      6,296      7,269     13,224     12,050
                                                            ---------  ---------  ---------  ---------
COST OF REVENUES:
  Equipment...............................................      2,466      2,679      4,810      5,054
  Services................................................      2,025      1,363      3,520      2,780
                                                            ---------  ---------  ---------  ---------
    Total cost of revenues................................      4,491      4,042      8,330      7,834
                                                            ---------  ---------  ---------  ---------
    Gross profit..........................................      1,805      3,227      4,894      4,216
                                                            ---------  ---------  ---------  ---------
OPERATING EXPENSES:
  Research, development and engineering...................      1,918      1,847      3,872      3,790
  Selling, general and administrative.....................      4,120      2,019      6,934      4,230
  Parent charges..........................................     --             97     --            193
                                                            ---------  ---------  ---------  ---------
    Total operating expenses..............................      6,038      3,963     10,806      8,213
                                                            ---------  ---------  ---------  ---------
    Operating loss........................................     (4,233)      (736)    (5,912)    (3,997)
 
INTEREST EXPENSE (INCOME), net (including related party
  interest)...............................................        (96)       129       (195)       279
OTHER INCOME..............................................         14         27         14         54
                                                            ---------  ---------  ---------  ---------
    Loss before income taxes..............................     (4,123)      (838)    (5,703)    (4,222)
INCOME TAX BENEFIT........................................      1,323        318      1,939      1,760
                                                            ---------  ---------  ---------  ---------
NET LOSS..................................................  $  (2,800) $    (520) $  (3,764) $  (2,462)
                                                            ---------  ---------  ---------  ---------
                                                            ---------  ---------  ---------  ---------
 
BASIC AND DILUTED NET LOSS PER COMMON SHARE...............  $   (0.43) $   (0.15) $   (0.58) $   (0.71)
                                                            ---------  ---------  ---------  ---------
                                                            ---------  ---------  ---------  ---------
 
SHARES USED IN COMPUTING BASIC AND DILUTED NET LOSS PER
  COMMON SHARE............................................      6,467      3,477      6,467      3,477
                                                            ---------  ---------  ---------  ---------
                                                            ---------  ---------  ---------  ---------
</TABLE>
 
        The accompanying notes are an integral part of these statements.
 
                                       4
<PAGE>
                          AXIOM INC. AND SUBSIDIARIES
 
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
 
                                 (IN THOUSANDS)
                                  (UNAUDITED)
 
<TABLE>
<CAPTION>
                                                                                                FOR THE SIX MONTHS
                                                                                                 ENDED MARCH 31,
                                                                                               --------------------
<S>                                                                                            <C>        <C>
                                                                                                 1998       1997
                                                                                               ---------  ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss.....................................................................................  $  (3,764) $  (2,462)
Adjustments to reconcile net loss to net cash provided by operating activities--
  Depreciation and amortization..............................................................        673      1,107
  Provision for doubtful accounts............................................................        755     --
  Changes in assets and liabilities, net--
    Decrease (increase) in--
      Accounts receivable....................................................................      2,923      7,582
      Inventories............................................................................      1,140     (1,505)
      Other current assets...................................................................       (271)      (224)
      Other assets...........................................................................        (90)        40
      Deferred taxes.........................................................................     (1,453)       128
      Income tax receivable..................................................................       (517)    (3,940)
    Increase (decrease) in--
      Accounts payable.......................................................................     (1,321)       (62)
      Accrued compensation and related benefits..............................................        (38)      (231)
      Accrued agent commissions..............................................................       (142)      (379)
      Other accrued expenses.................................................................        902       (556)
      Deferred revenues......................................................................      1,340      1,182
                                                                                               ---------  ---------
        Net cash provided by operating activities............................................        137        680
                                                                                               ---------  ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment..........................................................       (847)      (769)
Cash paid for acquisition, net...............................................................        (91)    --
                                                                                               ---------  ---------
        Net cash used in investing activities................................................       (938)      (769)
                                                                                               ---------  ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on long-term debt...................................................................        (73)      (147)
Advances on obligations to parent and affiliates.............................................        391      2,056
Repayment on obligations to parent and affiliates............................................       (549)    (3,867)
                                                                                               ---------  ---------
        Net cash used in financing activities................................................       (231)    (1,958)
                                                                                               ---------  ---------
EFFECT OF EXCHANGE RATE CHANGES ON CASH......................................................         (2)    --
                                                                                               ---------  ---------
NET DECREASE IN CASH AND CASH EQUIVALENTS....................................................     (1,034)    (2,047)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD...............................................      7,206      3,326
                                                                                               ---------  ---------
CASH AND CASH EQUIVALENTS, END OF PERIOD.....................................................  $   6,172  $   1,279
                                                                                               ---------  ---------
                                                                                               ---------  ---------
</TABLE>
 
        The accompanying notes are an integral part of these statements.
 
                                       5
<PAGE>
                          AXIOM INC. AND SUBSIDIARIES
 
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 
                                  (UNAUDITED)
 
1. BACKGROUND:
 
THE COMPANY
 
    Axiom Inc. (the "Company"), a Delaware corporation, changed its name from
Securicor Communications Inc. in May 1997. Through May 23, 1997, the Company's
business was conducted through its wholly-owned subsidiary, Securicor
Telesciences Inc. ("STI"). On that date, STI merged into the Company. The
Company is a majority-owned subsidiary of Securicor Communications Limited
("SCL"), an entity organized under the laws of the United Kingdom and a
wholly-owned subsidiary of Securicor plc ("Securicor"), a company organized
under the laws of the United Kingdom. As the merger represented a transaction
between entities under common control, the net assets of STI were transferred at
net book value. Prior to the completion of the Company's initial public
offering, Securicor provided the financing requirements for the Company through
advances (See Note 6).
 
INITIAL PUBLIC OFFERING
 
    On July 8, 1997, the Company completed its initial public offering of
2,600,000 shares of Common Stock at a price of $12.00 per share. The Company
received net cash proceeds of approximately $28,053,000 from the public
offering. In addition, on August 6, 1997, the underwriters exercised their over-
allotment option of 390,000 shares of Common Stock at a price of $12.00 per
share. The Company received net cash proceeds of $4,352,400. Collectively, both
transactions are herein referred to as the "Offering."
 
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
 
INTERIM FINANCIAL INFORMATION AND SUMMARY FINANCIAL INFORMATION
 
    The financial statements as of March 31, 1998 and for the three and six
months ended March 31, 1998 and 1997 are unaudited and, in the opinion of
management, include all adjustments (consisting only of normal recurring
adjustments) necessary for the fair presentation of results for these interim
periods. The results for the three and six months ended March 31, 1998 are not
necessarily indicative of the results to be expected for the entire year. While
the Company believes that the disclosures presented are adequate to make the
information not misleading, these Consolidated Financial Statements should be
read in conjunction with the Consolidated Financial Statements and the notes
included in the Company's Form 10-K for the fiscal year ended September 30,
1997.
 
PRINCIPLES OF CONSOLIDATION
 
    The consolidated financial statements include the accounts of the Company
and its wholly-owned subsidiaries. All significant intercompany accounts and
transactions have been eliminated.
 
CASH AND CASH EQUIVALENTS
 
    For the purposes of the Statements of Cash Flows, the Company considers all
highly liquid investment instruments purchased with an original maturity of
three months or less to be cash equivalents. Cash and cash equivalents are
comprised of investments in various money market funds.
 
                                       6
<PAGE>
                          AXIOM INC. AND SUBSIDIARIES
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
                                  (UNAUDITED)
 
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (CONTINUED)
INVENTORIES
 
    Inventories are valued at the lower of cost, determined on the first-in,
first-out method or market.
 
AGENT COMMISSIONS
 
    In certain contracts, particularly large international contracts, the
Company may utilize an agent, who will work directly with the customer. The
Company is typically charged a commission based on the total revenues of the
contract. These charges are recorded when the revenues are recognized and
included in cost of revenues. Any earned but unpaid commissions are recorded in
accrued agent commissions.
 
CONCENTRATION OF CREDIT RISK
 
    Financial instruments that potentially subject the Company to concentration
of credit risk are accounts receivable. The Company's customer base principally
comprises the Regional Bell Operating Companies ("RBOCs"), as well as
international telephone companies (See "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and "Liquidity and Capital
Resources"). The Company typically does not require collateral from its
customers. In addition, the Company has begun to sell its products to system
integrators and resellers.
 
REVENUE RECOGNITION
 
    Revenues are generally recognized upon shipment of the equipment. In "bill
and hold" transactions, the Company recognizes revenues when the following
conditions are met: the equipment is complete, ready for shipment and segregated
from other inventory; the Company has no further significant performance
obligations in connection with the completion of the transaction; the commitment
and delivery schedule is fixed; the customer requested the transaction be
completed on this basis; and the risks of ownership have passed to the customer.
Revenues from installation and engineering activities are recognized as services
are provided.
 
    Depending on contract terms and conditions, software license fees are
recognized upon delivery of the product if no significant vendor obligations
remain and collection of the resulting receivable is deemed probable. The
Company had $353,000 and $0 of separate software license fee revenues for the
six months ended March 31, 1998 and 1997, respectively, and these amounts are
included in equipment revenues. If significant vendor obligations exist at
delivery and/or the product is subject to customer acceptance, revenue is
deferred until no significant obligations remain and/or acceptance has occurred.
If the payment of the license fee is coincident to services which are deemed to
be essential to the transaction, the license fee is deferred and recognized
using contract accounting over the period during which the services are
performed. The Company's software licensing agreements provide for customer
support (typically 90 days). The portion of the license fee associated with
customer support is unbundled from the license fee and is recognized ratably
over the warranty period as services revenue.
 
    The Company offers support agreements to its customers. Revenues from
customer support are recognized as services are provided. Services are generally
provided ratably over the term of the customer support agreement and are
included in services revenue in the accompanying statements of operations.
 
                                       7
<PAGE>
                          AXIOM INC. AND SUBSIDIARIES
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
                                  (UNAUDITED)
 
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (CONTINUED)
RESEARCH, DEVELOPMENT AND ENGINEERING EXPENSES
 
    Research, development and engineering expenses are charged to expense as
incurred. Engineering expenses consist of costs related to the development of
new products, enhancements to existing products and the integration of existing
products into application specific systems.
 
PARENT CHARGES
 
    Prior to the Offering, parent charges were allocated to the Company from
Securicor and consisted of charges for certain support and services. These
charges were based on Securicor's estimate of its total relevant costs for the
applicable fiscal year, allocated pro rata based on estimated revenues of each
applicable business unit. Management believed the method of allocation was
reasonable.
 
    The Company has not incurred nor will incur any parent charges subsequent to
the Offering. The Company and Securicor have entered into an agreement for
international marketing services (See Note 7).
 
INCOME TAXES
 
    The Company accounts for income taxes under Statement of Financial
Accounting Standards ("SFAS") No. 109, "Accounting for Income Taxes." SFAS No.
109 requires the liability method of accounting for deferred income taxes.
Deferred tax assets and liabilities are determined based on the difference
between the financial statement and tax bases of assets and liabilities.
Deferred tax assets or liabilities at the end of each period are determined
using the enacted tax rates.
 
NET LOSS PER COMMON SHARE
 
    In February 1997, the Financial Accounting Standards Board issued SFAS No.
128, "Earnings per Share," which superseded Accounting Principles Board Opinion
No. 15, "Earnings per Share." SFAS No. 128 requires dual presentation of basic
and diluted earnings per share for complex capital structures on the face of the
statements of operations. According to SFAS No. 128, basic earnings per share,
which replaced primary earnings per share, is calculated by dividing net income
available to Common shareholders by the weighted average number of Common shares
outstanding for the period. Diluted earnings per share, which replaced fully
diluted earnings per share, reflects the potential dilution from the exercise or
conversion of securities into Common stock, such as stock options.
 
    The Company was required to and did adopt SFAS No. 128 during the period
ended December 31, 1997, as earlier application was not permitted. As required
by SFAS No. 128, all prior-period loss per Common share data has been restated
to conform with the provisions of this statement.
 
                                       8
<PAGE>
                          AXIOM INC. AND SUBSIDIARIES
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
                                  (UNAUDITED)
 
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (CONTINUED)
    The following is a reconciliation of the numerators and denominators of the
basic and diluted loss per Common share computations:
<TABLE>
<CAPTION>
                                                                  FOR THE SIX MONTHS ENDED MARCH 31
                                         -----------------------------------------------------------------------------------
<S>                                      <C>            <C>            <C>          <C>           <C>            <C>
                                                           1998                                       1997
                                         -----------------------------------------  ----------------------------------------
 
<CAPTION>
                                             LOSS          SHARES       PER SHARE       LOSS         SHARES       PER SHARE
                                          (NUMERATOR)   (DENOMINATOR)    AMOUNT     (NUMERATOR)   (DENOMINATOR)    AMOUNT
                                         -------------  -------------  -----------  ------------  -------------  -----------
<S>                                      <C>            <C>            <C>          <C>           <C>            <C>
BASIC LOSS PER COMMON SHARE............
    NET LOSS...........................  $  (2,800,000)    6,466,900    $   (0.43)   $ (520,000)     3,476,900    $   (0.15)
                                                                       -----------                               -----------
                                                                       -----------                               -----------
Effect of dilutive securities..........
    Stock Options......................       --             --                          --            --
                                         -------------  -------------               ------------  -------------
DILUTED LOSS PER COMMON SHARE..........
    NET LOSS AND ASSUMED CONVERSIONS...  $  (2,800,000)    6,466,900    $   (0.43)   $ (520,000)     3,476,900    $   (0.15)
                                         -------------  -------------  -----------  ------------  -------------  -----------
                                         -------------  -------------  -----------  ------------  -------------  -----------
</TABLE>
 
    Diluted loss per Common share is the same as basic loss per common share as
no additional shares for the potential dilution from the exercise or conversion
of securities into Common stock are included in the denominator as the result is
anti-dilutive due to the Company's losses. Options to purchase 386,176 shares of
Common stock at $5.50 per share were outstanding during the six months ended
March 31, 1998, but were not included in the computation of diluted loss per
Common share.
 
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
 
    For the six months ended March 31, 1998 and 1997, the Company paid interest
of $13,000 and $353,000, respectively. For the six months ended March 31, 1998
and 1997, the Company paid income taxes, net of refunds, of $31,000 and
$2,049,000, respectively.
 
    In January 1998, the Company incurred a capital lease obligation of
$126,000.
 
SUPPLEMENTAL INFORMATION REGARDING NON-CASH INVESTING AND FINANCING ACTIVITIES
 
    On February 17, 1998, the Company acquired Greendown Software Limited
("GSL") in a business combination accounted for as a purchase. GSL is primarily
engaged in the development of fraud management software. The results of the
operations of GSL are included in the accompanying financial statements since
the date of acquisition. The total purchase price of $191,000 was allocated to
the assets acquired and liabilities assumed based on their respective fair
values. The excess of the purchase price over the fair value of the net assets
acquired (goodwill) was $145,000 and is being amortized on a straight-line basis
over 2 years.
 
                                       9
<PAGE>
                          AXIOM INC. AND SUBSIDIARIES
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
                                  (UNAUDITED)
 
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (CONTINUED)
    The following table presents the non-cash assets and liabilities that were
consolidated as a result of the acquisition of Greendown Software Limited:
 
<TABLE>
<CAPTION>
                                                                                                          1998
                                                                                                       -----------
<S>                                                                                                    <C>
  Non-cash assets (liabilities):
    Accounts receivable..............................................................................  $    80,000
    Property and equipment...........................................................................       27,000
    Goodwill.........................................................................................      145,000
    Accounts payable.................................................................................      (43,000)
    Other accrued expenses...........................................................................      (53,000)
    Deferred revenues................................................................................      (65,000)
                                                                                                       -----------
    Cash paid, net...................................................................................  $    91,000
                                                                                                       -----------
                                                                                                       -----------
</TABLE>
 
MANAGEMENT'S USE OF ESTIMATES
 
    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 and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
 
3. ACCOUNTS RECEIVABLE:
 
<TABLE>
<CAPTION>
                                                            MARCH 31, 1998  SEPTEMBER 30, 1997
                                                            --------------  ------------------
<S>                                                         <C>             <C>
Billed....................................................   $  9,786,000     $   12,265,000
Unbilled..................................................      1,534,000          2,076,000
                                                            --------------  ------------------
                                                               11,320,000         14,341,000
Less--allowance for doubtful accounts.....................       (677,000)          (100,000)
                                                            --------------  ------------------
                                                             $ 10,643,000     $   14,241,000
                                                            --------------  ------------------
                                                            --------------  ------------------
</TABLE>
 
    Unbilled accounts receivable includes costs and estimated earnings on
contracts in progress which have been recognized as revenues but not yet billed
to customers under the provisions of specified contracts. Substantially all
unbilled accounts receivables are expected to be billed and collected within one
year.
 
                                       10
<PAGE>
                          AXIOM INC. AND SUBSIDIARIES
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
                                  (UNAUDITED)
 
4. INVENTORIES:
 
<TABLE>
<CAPTION>
                                                            MARCH 31, 1998  SEPTEMBER 30, 1997
                                                            --------------  ------------------
<S>                                                         <C>             <C>
Raw materials.............................................   $  3,615,000     $    4,718,000
Work-in-process...........................................        655,000            538,000
Finished goods............................................      1,964,000          2,118,000
                                                            --------------  ------------------
                                                             $  6,234,000     $    7,374,000
                                                            --------------  ------------------
                                                            --------------  ------------------
</TABLE>
 
5. LINE OF CREDIT:
 
    The Company had a $2,500,000 line of credit with a local bank with interest
at the bank's prime rate which expired on March 31, 1998. As of March 31, 1998,
no funds had been advanced against this line of credit. Currently, this line is
being renegotiated.
 
6. OBLIGATIONS TO PARENT AND AFFILIATES:
 
    Information relative to the Company's obligations to parent and affiliates
is as follows:
 
<TABLE>
<CAPTION>
                                                                                MARCH 31, 1998  SEPTEMBER 30, 1997
                                                                                --------------  ------------------
<S>                                                                             <C>             <C>
Obligations to parent.........................................................    $   16,000       $    289,000
                                                                                     -------           --------
Obligations to affiliates:
    Receivables from affiliates...............................................        (9,000)          (119,000)
    Payables to affiliates....................................................        18,000             13,000
                                                                                     -------           --------
        Total obligations to affiliates, net..................................         9,000           (106,000)
                                                                                     -------           --------
Total obligations to parent and affiliates....................................    $   25,000       $    183,000
                                                                                     -------           --------
                                                                                     -------           --------
</TABLE>
 
    Prior to the completion of the Offering, the Company was funded through
advances from its parent (Securicor). Certain advances were interest bearing and
were loaned to the Company at U.K. base rate plus 1%. There were no interest
bearing advances for the six months ended March 31, 1998. For the six months
ended March 31, 1997, the interest rate charged on these obligations ranged from
6.75% to 7.0%. Interest expense for the six months ended March 31, 1998 and
1997, was $0 and $322,000, respectively. As these obligations to parent and
affiliates are due on demand, this net amount is included in current
liabilities.
 
7. RELATED PARTY TRANSACTIONS:
 
    In May 1997, the Company and Securicor entered into an agreement pursuant to
which Securicor provides international sales and marketing services to the
Company. For the six months ended March 31, 1998, total charges from Securicor
for these services were $45,000. In addition, the Company pays each of its
directors an annual directors fee of $20,000 each. For the six months ended
March 31, 1998, the Company expensed $10,000 related to such fees. The directors
fees paid to an employee of Securicor are remitted to Securicor.
 
    In July 1997, the Company made a loan to an officer of the Company in the
amount of $20,000 which was to be repaid in January 1998 with accrued interest
at a rate of 7% per annum. Currently, an extension
 
                                       11
<PAGE>
                          AXIOM INC. AND SUBSIDIARIES
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
                                  (UNAUDITED)
 
7. RELATED PARTY TRANSACTIONS: (CONTINUED)
of this loan is being renegotiated under the same terms and conditions. Also, in
July 1997, the Company advanced $20,400 to a member of the Company's Board of
Directors which is repayable in monthly principal installments of $1,666. At
March 31, 1998 and September 30, 1997, $5,406 and $15,402 remained outstanding
on this loan, respectively. Both of these receivables are included in other
current assets.
 
    The Company obtains its Directors and Officers insurance through Securicor.
Total Director and Officer insurance expense for the six months ended March 31,
1998 was $29,000.
 
    During the six months ended March 31, 1997, the Company's results included
the business activities related to an Integrated Services Digital Network
("ISDN") product. The Company's business activities related to the ISDN product
were performed through its wholly-owned subsidiary, Securicor 3Net, Inc. During
the six months ended March 31, 1997, the Company sold certain products related
to this technology and recognized certain costs and realized all of the revenue
related to such activities. For the six months ended March 31, 1997, the Company
recognized revenues of $1,129,000 and cost of revenues of $732,000 relating to
such activities. Cost of revenues includes $341,000 of amortization of acquired
development costs related to the development of the ISDN product. These amounts
are included in revenues and cost of revenues. In May 1997, the Company
transferred all of its stock in Securicor 3Net, Inc. to an affiliate of
Securicor at net book value due to the related party nature of the transaction.
 
    From time to time, the Company and Securicor process miscellaneous
transactions on behalf of each other which are payable the month following the
month incurred. These transactions have been immaterial to date.
 
8. COMMITMENTS AND CONTINGENCIES:
 
    The Company is obligated to make certain payments, as defined, to certain
key Company employees if these employees are terminated. In addition, certain
key employees have performance incentives in the form of cash and equity (in the
parent or an affiliate) related compensation. The Company does not expect to
make these payments other than in the normal course of business.
 
    The Company is party to various claims arising in the ordinary course of
business. Although the ultimate outcome of these matters is presently not
determinable, management believes that the resolution of these matters will not
have a material adverse effect on the Company's financial position or results of
operations.
 
    The Company received a letter dated June 19, 1997 from Acxiom Corporation
("Acxiom") requesting that the Company cease using the name "Axiom". Acxiom
filed suit against the Company in the United States District Court for the
District of Delaware on August 1, 1997 alleging trademark infringement and
dilution under the Lanham Act, as well as related state law causes of action.
Acxiom seeks a judgment against the Company enjoining any future use of the
Axiom name and Axiom tradenames, future acts of unfair competition in the United
States, and destruction of all advertising and promotional material and awarding
treble damages in an unspecified amount because of the alleged willfulness of
the Company's infringement. The Company has vigorously defended against these
claims and believes that the claim is without merit because of the lack of
correspondence between the products, services and customers of the two
companies. There is no assurance, however, that these claims will be resolved on
terms favorable to the Company. In February 1998, these claims were tried in a
bench trial. The court has not yet issued a ruling.
 
                                       12
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
 
OVERVIEW
 
    The Company develops, markets and supports integrated hardware and software
systems that are able to collect and process an increasing volume of transaction
information from a wide variety of wireline switches and transmit the
information to the customer's information management networks. The Company is
developing systems that process transaction information from wireless,
Asynchronous Transfer Mode (ATM) and other specialized telecommunications
switches. The Company's customers use this information to bill their
subscribers, to implement customized marketing programs and to perform other
data management functions. The Company also provides traffic management
solutions to telecommunications companies. The Company recently introduced its
first applications software product, a fraud detection and management system.
The Company provides installation, ongoing maintenance, support and training, as
well as customized engineering services, related to the Company's systems.
 
    A significant portion of the Company's revenues has been, and is expected to
continue to be, derived from substantial orders placed by large organizations,
and in particular three RBOCs. Aggregate revenues from U S West, Inc.,
Southwestern Bell Telephone Company and Ameritech Corporation accounted for
60.0% and 55.6% of the Company's total revenues for the six months ended March
31, 1998 and 1997, respectively. The Company is currently evaluating the impact
of the recent RBOC consolidation activity.
 
    Domestic revenues are typically generated under cancelable general purchase
agreements which provide for the continuing supply of products and services over
future years. Pricing is based upon the volume of products ordered.
Internationally, the Company typically enters into long-term contracts for the
delivery of turn-key systems which include products and services. The Company's
revenues are difficult to forecast because the purchase of its systems generally
involves a significant commitment of capital and management time, which
generally results in lengthy sales cycles.
 
    Quarterly revenues are subject to substantial fluctuations primarily
resulting from the Company's concentration of customers and the timing of orders
received. The timing of orders is dependent, to a large extent, on the timing of
the Company's customers' annual budget process. Historically, the Company's
first and second fiscal quarters have generated a lower level of revenues
compared to the Company's third and fourth fiscal quarters, by which time the
Company's customers have typically approved their budgets. Historically, product
and service backlog has been a relatively small amount and most orders are
fulfilled within three months. Because of its close links to, and ongoing
communications with, its customers, the Company generally is able to plan for
product demand and, when the order is received, ship its products within a
relatively short time period thereafter.
 
    Cost of revenues includes the direct cost of hardware and software modules,
other manufacturing costs related to the assembly and testing of products,
customer service costs, agent commissions where applicable, and other variable
costs such as freight, scrap and installation materials. The Company has a
relatively high fixed cost base which is included in cost of revenues. As a
result, any significant decline in revenues would likely have a significant
adverse effect on margins.
 
    Research, development and engineering expenses consist of payroll and
related expenses and other costs associated with the design and development of
the Company's products. These costs are charged to expense as incurred.
 
    Selling, general and administrative expenses consist of costs to support the
Company's sales, marketing and administrative functions. Included within these
costs are payroll and related expenses, supplies, travel, outside services, as
well as the cost of the Company's participation in trade shows, industry
conferences and related travel and promotional costs.
 
                                       13
<PAGE>
    The Company is currently in the process of evaluating its information
technology infrastructure for Year 2000 compliance. The Company does not expect
that the cost to modify such infrastructure to Year 2000 compliance will be
material to its financial condition or results of operations. The Company does
not anticipate any material disruption in its operations as a result of any
failure by the Company to be in compliance. The Company does not currently have
any information concerning the Year 2000 compliance status of its suppliers and
customers. In the event that any of the Company's significant suppliers or
customers does not successfully and timely achieve Year 2000 compliance, the
Company's business or operations could be adversely affected.
 
SAFE HARBOR FOR FORWARD-LOOKING STATEMENTS
 
    From time to time, the Company may publish statements that are not
historical facts but are forward-looking statements relating to such matters as
anticipated financial performance, business prospects, technological
developments, new products, research and development activities and similar
matters. The Private Litigation Reform Act of 1995 provided a safe harbor for
forward-looking statements. In order to comply with the terms of the safe
harbor, the Company notes that a variety of factors could cause the Company's
actual results and experience to differ materially from the anticipated results
or other expectations expressed in the Company's forward-looking statements. The
risks and uncertainties that may affect the operations, performance, development
and results of the Company's business include, but are not limited to the
following important factors: (i) reliance on a limited number of significant
customers and dependence on Sterling Series products; (ii) difficulty in
predicting quarterly revenues because of long sales cycles and customer
budgetary constraints; (iii) competition in the market for billing data
collection and traffic management systems; (iv) rapid and unexpected changes in
the telecommunications markets and technologies; (v) the success of the
Company's sales and marketing strategies; (vi) the ability of the Company to
manage its growth; (vii) the ability of the Company to motivate, and retain the
services of, its key management and technical personnel and continue to hire
additional qualified personnel to meet the Company's evolving staffing needs;
and (viii) risks related to sales to international customers, including, but not
limited to, currency fluctuations, instability in financial markets and
unanticipated shifts in economic policies of foreign governments.
 
RESULTS OF OPERATIONS
 
QUARTER ENDED MARCH 31, 1998 COMPARED TO QUARTER ENDED MARCH 31, 1997
 
    REVENUES
 
    Revenues decreased 13.4% to $6.3 million for the quarter ended March 31,
1998 from $7.3 million for the quarter ended March 31, 1997. Equipment revenues
were $4.0 million for the quarter ended March 31, 1998, a decrease of 30.4% from
the $5.8 million of equipment revenues for the quarter ended March 31, 1997. A
significant portion of the decrease in revenues resulted from a delay in orders,
primarily related to the Company's international business. Services revenues
increased 53.4% to $2.3 million for the quarter ended March 31, 1998 from $1.5
million for the quarter ended March 31, 1997 due to certain engineering services
provided to one of the RBOCs.
 
    GROSS PROFIT
 
    Gross profit decreased to 28.7% of revenues for the quarter ended March 31,
1998 from 44.4% for the quarter ended March 31, 1997. Gross profit related to
equipment revenues decreased to 38.9% for the quarter ended March 31, 1998 from
53.8% for the quarter ended March 31, 1997. This decrease resulted primarily
from the delay in orders and the introduction of the Company's low end data
server, which is sold at lower margins. The Company has a relatively high fixed
cost base which is included in cost of revenues. As a result, fluctuations in
revenues have a significant effect on margins. Gross profit from services
revenues was 10.5% for the quarter ended March 31, 1998, an increase from gross
profit of 7.6% for the
 
                                       14
<PAGE>
quarter ended March 31, 1997. This increase is due primarily to an engineering
services project for one of the RBOCs and was partially offset due to lower
margins on installation services and a higher fixed cost base which is included
in cost of revenues.
 
    RESEARCH, DEVELOPMENT AND ENGINEERING
 
    Research, development and engineering expenses increased 3.8% to $1.9
million for the quarter ended March 31, 1998 from $1.8 million for the quarter
ended March 31, 1997. The increase resulted primarily from the addition of
engineering staff and subcontractors to support the Company's increased focus on
product development. As a percentage of revenues, research, development and
engineering expenses increased during the quarter ended March 31, 1998 to 30.5%
from 25.4% for the quarter ended March 31, 1997 due to decreased revenues.
 
    SELLING, GENERAL AND ADMINISTRATIVE
 
    Selling, general and administrative expenses were $4.1 million for the
quarter ended March 31, 1998, an increase of 104.1% compared to $2.0 million for
the same period in 1997. As a percentage of revenues, selling, general and
administrative expenses increased during the quarter ended March 31, 1998 to
65.4% from 27.8% for the same period in 1997. The increase is attributable to
the addition of staff in the marketing and sales departments of the Company as a
result of the Company's increased focus on developing new markets and expanding
existing markets for the Company's products. In addition, the increase is
attributable to additional legal cost incurred related to the law suit filed by
Acxiom Corporation, general and administrative costs associated with being a
public company and an increase to the allowance for bad debts of approximately
$700,000 as a result of the continued uncertainty in the Company's Asian
markets. In future periods, increases to the allowance for bad debts may occur
as a result of this uncertainty in Asia (see "Liquidity and Capital Resources").
 
    PARENT CHARGES
 
    Prior to the Offering, Securicor charged the Company an allocated portion of
group and divisional overhead costs (the "Parent Charges"). The Parent Charges
for the quarter ended March 31, 1997 were $97,000. The Company did not incur any
Parent Charges after the Offering and is not expected to incur any significant
expenses in lieu of these Parent Charges. The Company entered into an agreement
effective May 1997 whereby Securicor is providing international marketing
services to the Company. For the quarter ended March 31, 1998, total charges
from Securicor for these services were $25,000. In addition, the Company pays
one of its directors who is an employee of Securicor annual directors fees of
$20,000, which are remitted directly to Securicor. For the quarter ended March
31, 1998, the Company expensed $5,000 related to such fees. See Note 7 of Notes
to Consolidated Financial Statements.
 
    INTEREST EXPENSE (INCOME)
 
    Net interest income was $96,000 for the quarter ended March 31, 1998.
Interest expense was $129,000 for the quarter ended March 31, 1997. Upon the
consummation of the Offering, a significant portion of the borrowings from
Securicor was repaid. As a result, the Company's interest expense has decreased.
Additionally, the Company has invested a portion of the proceeds of the Offering
which has resulted in interest income.
 
    INCOME TAXES
 
    The Company's effective tax rate was 32.1% and 37.9% for the quarters ended
March 31, 1998 and 1997, respectively. Income taxes are recorded based upon the
expected annual effective income tax rate.
 
                                       15
<PAGE>
SIX MONTHS ENDED MARCH 31, 1998 COMPARED TO MARCH 31, 1997
 
    REVENUES
 
    Revenues increased 9.7% to $13.2 million for the six months ended March 31,
1998 from $12.1 million for the six months ended March 31, 1997. Equipment
revenues were $8.8 million for the six months ended March 31, 1998 and 1997.
Equipment revenues increased as a result of increases related to the Company's
international business and larger shipments to existing RBOC customers. These
increases were offset by $1.1 million of equipment revenues generated by the
Company in the six months ended March 31, 1997 which related to sales of an
affiliate's product which did not recur. See Note 7 of Notes to Consolidated
Financial Statements. Services revenues increased 38.7% to $4.4 million for the
six months ended March 31, 1998 from $3.2 million for the six months ended March
31, 1997. This increase is mainly due to engineering services provided to one of
the RBOCs and increased hardware and software maintenance contracts incurred
during the six months ended March 31, 1998.
 
    GROSS PROFIT
 
    Gross profit increased to 37.0% of revenues for the six months ended March
31, 1998 from 35.0% for the six months ended March 31, 1997. Gross profit
related to equipment revenues increased to 45.2% for the six months ended March
31, 1998 from 42.9% for the six months ended March 31, 1997. The Company has a
relatively high fixed cost base which is included in cost of revenues. As a
result, fluctuations in revenues have a significant effect on margins. Gross
profit from services revenues increased to 20.8% for the six months ended March
31, 1998 from 13.2% for the six months ended March 31, 1997. This increase is
attributable to engineering services provided to one of the RBOCs and the
benefit of spreading higher revenues over the Company's fixed cost base.
 
    RESEARCH, DEVELOPMENT AND ENGINEERING
 
    Research, development and engineering expenses were $3.9 million for the six
months ended March 31, 1998, an increase of 2.2% compared to $3.8 million for
the same period in 1997. As a percentage of revenues, research, development and
engineering expenses decreased during the six months ended March 31, 1998 to
29.3% from 31.5% for the six months ended March 31, 1997 due to increased
revenues. Research, development and engineering expenditures have remained
relatively consistent between periods as the Company continues the development
and enhancement of its products.
 
    SELLING, GENERAL AND ADMINISTRATIVE
 
    Selling, general and administrative expenses were $6.9 million for the six
months ended March 31, 1998, an increase of 63.9% compared to $4.2 million for
the same period in 1997. As a percentage of revenues, selling, general and
administrative expenses increased during the six months ended March 31, 1998 to
52.4% from 35.1% for the same period in 1997. The increase is attributable to
the addition of staff in the marketing and sales departments of the Company as a
result of the Company's increased focus on developing new markets and expanding
existing markets for the Company's products. In addition, the increase is
attributable to additional legal cost incurred related to the law suit filed by
Acxiom Corporation, general and administrative costs associated with being a
public company and an increase to the allowance for bad debts of approximately
$700,000 as a result of the continued uncertainty in the Company's Asian
markets. In future periods, increases to the allowance for bad debts may occur
as a result of this uncertainty in Asia (See "Liquidity and Capital Resources").
 
    PARENT CHARGES
 
    Prior to the Offering, Securicor charged the Company an allocated portion of
group and divisional overhead costs (the "Parent Charges"). The Parent Charges
for the six months ended March 31, 1997 were $193,000. The Company did not incur
any Parent Charges after the Offering and is not expected to incur
 
                                       16
<PAGE>
any such charges in the future. The Company entered into an agreement effective
May 1997 whereby Securicor is providing international marketing services to the
Company. For the six months ended March 31, 1998, total charges from Securicor
for these services were $45,000. In addition, the Company pays one of its
directors who is an employee of Securicor annual directors fees of $20,000,
which are remitted directly to Securicor. For the six months ended March 31,
1998, the Company expensed $10,000 related to such fees. See Note 7 of Notes to
Consolidated Financial Statement.
 
    INTEREST EXPENSE (INCOME)
 
    Net interest income was $195,000 for the six months ended March 31, 1998.
Net interest expense was $279,000 for the six months ended March 31, 1997. Upon
the consummation of the Offering, a significant portion of the borrowings from
Securicor was repaid. As a result, the Company's interest expense has decreased.
Additionally, the Company has invested a portion of the proceeds of the Offering
which has resulted in interest income.
 
    INCOME TAXES
 
    The Company's effective tax rate was 34.0% and 41.7% for the six months
ended March 31, 1998 and 1997, respectively. Income taxes are recorded based
upon the expected annual effective income tax rate.
 
LIQUIDITY AND CAPITAL RESOURCES
 
    Prior to the Offering, the Company had financed its operations primarily
with cash generated from operations and borrowings from Securicor. In July 1997,
the Company realized net proceeds from the Offering of approximately $32.4
million (after deducting underwriters discounts and commissions and other
offering expenses). In July 1997, the Company repaid $22.9 million in Company
borrowings from Securicor. As of March 31, 1998, the Company had $6.2 million of
cash and cash equivalents, $10.6 million in net trade accounts receivable, and
$18.2 million of working capital. Included in accounts receivable as of March
31, 1998 are approximately $3.0 million of receivables from a customer located
in Indonesia, which are subject to uncertainties that presently exist in that
market. (See "Results of Operations").
 
    Net cash provided by operating activities was $137,000 and $680,000 for the
six months ended March 31, 1998 and 1997, respectively. For the six months ended
March 31, 1998, amortization and depreciation of $673,000, a decrease in
accounts receivable of $3.7 million, a decrease in inventories of $1.1 million,
an increase in deferred revenues of $1.3 million and an increase in other
accrued expenses of $902,000 were offset by the net loss of $3.8 million, an
increase in other current assets of $271,000, a decrease in accounts payable,
accrued compensation and related benefits, and accrued agents' commissions of
$1.5 million and an increase in income tax receivable of $517,000. In the six
months ended March 31, 1997, amortization and depreciation of $1.1 million and a
decrease in accounts receivable of $7.6 million, a decrease in other assets of
$40,000 and an increase in deferred revenue of $1.2 million were offset by an
increase in inventory of $1.5 million, an increase in other current assets of
$224,000, a decrease in accounts payable, accrued compensation and related
benefits, accrued agent commissions and other accrued expenses of $1.2 million,
an increase in income tax receivable of $3.9 million and the net loss of $2.5
million.
 
    Net cash used in investing activities relating to purchases of property and
equipment was $847,000 and $769,000 for the six months ended March 31, 1998 and
1997, respectively. During the quarter ended March 31, 1998, the Company
acquired Greendown Software Limited for a net cash outlay of $91,000.
 
    Net cash used in financing activities was $231,000 and $2.0 million for the
six months ended March 31, 1998 and 1997, respectively. During the six months
ended March 31, 1997, cash used in financing activities resulted primarily from
the net repayments of obligations to Securicor of $1.8 million.
 
                                       17
<PAGE>
    The Company had a $2.5 million credit facility with a bank which expired
March 31, 1998. This line is currently being renegotiated. In December 1997, the
Company obtained a $1.5 million leasing facility to finance its purchases of
capital equipment. At May 14, 1998, approximately $1.4 million was available
under this facility.
 
    The Company believes that its existing cash balances, cash generated from
operations and the net proceeds from the Offering will be sufficient to meet the
Company's cash requirements during the next twelve months. However, depending
upon its rate of growth and profitability, the Company may require additional
equity or debt financing to meet its working capital requirements or capital
expenditure needs. There can be no assurance that additional financing, if
needed, will be available when required or on terms satisfactory to the Company.
 
INFLATION AND FOREIGN EXCHANGE
 
    To date, inflation and foreign currency fluctuations have not had a material
impact on the Company's financial condition and results of operations. All sales
arrangements with third-party international customers are denominated in US
dollars.
 
PART II. OTHER INFORMATION
 
ITEM 1. LEGAL PROCEEDINGS
 
    The Company received a letter dated June 19, 1997 from Acxiom Corporation
("Acxiom") requesting that the Company cease using the name "Axiom." Acxiom
filed suit against the Company in the United States District Court for the
District of Delaware on August 1, 1997 alleging trademark infringement and
dilution under the Lanham Act, as well as related state law causes of action.
Acxiom seeks a judgment against the Company enjoining any future use of the
Axiom name and Axiom tradenames, future acts of unfair competition in the United
States, destruction of all advertising and promotional material, and awarding
treble damages in an unspecified amount because of the alleged willfulness of
the Company's infringement. The Company has vigorously defended against these
claims and believes that the claim is without merit because of the lack of
correspondence between the products, services and customers of the two
companies. There is no assurance, however, that these claims will be resolved on
terms favorable to the Company. In February 1998, these claims were tried in a
bench trial. The court has not yet issued a ruling.
 
ITEM 2. CHANGES IN SECURITIES
 
    None
 
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
 
    None
 
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
 
    On March 4, 1998, the Company held its Annual Meeting of Stockholders at
which the holders of the Company's Common Stock voted in an election of all five
members of the Company's Board of Directors. The total number of shares of
Common Stock represented at the Annual Meeting was 5,361,975,
 
                                       18
<PAGE>
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS (CONTINUED)
constituting a quorum. All five nominees of the Board of Directors were
reelected. The following is a report of the votes cast at the Annual Meeting for
each nominee for director:
 
<TABLE>
<CAPTION>
NOMINEE NAME                                                                        VOTES FOR   WITHHOLD AUTHORITY
----------------------------------------------------------------------------------  ----------  -------------------
<S>                                                                                 <C>         <C>
Andrew P. Maunder.................................................................   5,324,328          37,647
Robert B. Kelly...................................................................   5,324,328          37,647
Sammy W. Pearson..................................................................   5,324,328          37,647
Trevor Sokell.....................................................................   5,324,328          37,647
Michael G. Wilkinson..............................................................   5,324,328          37,647
</TABLE>
 
ITEM 5. OTHER INFORMATION
 
    None
 
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
 
    (a) Exhibits
 
       10  Lease agreement between Brandywine Operating Partnership, L.P., and
           Axiom Inc., dated August 26, 1997.
 
       27  Financial Data Schedule
 
    (b) Reports on Form 8-K
       None
 
                                       19
<PAGE>
                                   SIGNATURES
 
    Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
 
                                AXIOM INC.
 
Dated: May 15, 1998             By:            /s/ ANDREW P. MAUNDER
                                     -----------------------------------------
                                                 Andrew P. Maunder
                                               CHAIRMAN OF THE BOARD,
                                                   PRESIDENT AND
                                              CHIEF EXECUTIVE OFFICER
                                           (PRINCIPAL EXECUTIVE OFFICER)
 
Dated: May 15, 1998             By:              /s/ MARK J. KADISH
                                     -----------------------------------------
                                                   Mark J. Kadish
                                              CHIEF FINANCIAL OFFICER
                                              (PRINCIPAL FINANCIAL AND
                                                ACCOUNTING OFFICER)
 
                                       20