<PAGE>   1

================================================================================

                       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 QUARTER ENDED JUNE 30, 2001

                                       OR

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


                         COMMISSION FILE NUMBER 0-23585


                     EMERGENT INFORMATION TECHNOLOGIES, INC.
--------------------------------------------------------------------------------
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)


              CALIFORNIA                                    33-0080929
--------------------------------------------------------------------------------
    (STATE OR OTHER JURISDICTION OF                      (I.R.S. EMPLOYER
    INCORPORATION OR ORGANIZATION)                      IDENTIFICATION NO.)


        4695 MACARTHUR COURT, 8TH FLOOR, NEWPORT BEACH, CALIFORNIA 92660
--------------------------------------------------------------------------------
               (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)

                                 (949) 975-1487
--------------------------------------------------------------------------------
              (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 [_]

     As of August 9, 2001 19,175,787 shares of the Company's common stock, no
par value, were outstanding.

================================================================================

<PAGE>   2

            EMERGENT INFORMATION TECHNOLOGIES, INC. AND SUBSIDIARIES


                                      INDEX


<TABLE>
<CAPTION>
                                          PART I. FINANCIAL INFORMATION

                                                                                                        PAGE
                                                                                                        ----
<S>                                                                                                     <C>

Item 1.    Financial Statements
           Condensed Consolidated Balance Sheets as of June 30, 2001 and December 31, 2000...........       3
           Condensed Consolidated Statements of Operations for the six months ended
            June 30, 2001 and 2000...................................................................       4
           Condensed Consolidated Statements of Cash Flows for the three and six months ended
            June 30, 2001 and 2000....................................................................      5
           Notes to Condensed Consolidated Financial Statements......................................     6-9
Item 2.    Management's Discussion and Analysis of Financial Condition and Results of Operations.....   10-18
Item 3.    Quantitative and Qualitative Disclosures About Market Risk................................      18

                                            PART II. OTHER INFORMATION

Item 1.    Legal Proceedings.........................................................................      19
Item 2.    Changes in Securities and Use of Proceeds.................................................      19
Item 3.    Defaults Upon Senior Securities...........................................................      19
Item 4.    Submission of Matters to a Vote of Security Holders.......................................      19
Item 5.    Other Information.........................................................................      19
Item 6.    Exhibits and Reports on Form 8-K..........................................................   20-22

SIGNATURE............................................................................................      23
</TABLE>


                                       2
<PAGE>   3

                         PART I - FINANCIAL INFORMATION


ITEM 1. FINANCIAL STATEMENTS


            EMERGENT INFORMATION TECHNOLOGIES, INC. AND SUBSIDIARIES

                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                   JUNE 30,       DECEMBER 31,
                                                                     2001             2000
                                                                   --------       ------------
                                                                  (UNAUDITED)
<S>                                                                <C>            <C>

                           ASSETS

Current assets:
    Cash and cash equivalents .............................        $  1,290         $  2,040
    Accounts receivable, net ..............................          29,067           28,881
    Prepaid income taxes ..................................              --            2,846
    Prepaid expenses and other assets .....................           2,564            2,443
                                                                   --------         --------
          Total current assets ............................          32,921           36,210
    Property and equipment, net ...........................           4,262            5,408
    Goodwill, net .........................................          32,979           32,641
    Other assets ..........................................           1,221            1,590
                                                                   --------         --------
                                                                   $ 71,383         $ 75,849
                                                                   ========         ========
            LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
    Trade accounts payable ................................        $  1,354         $  5,155
    Accrued compensation and payroll taxes ................           6,004            6,823
    Accrued expenses ......................................           2,063            1,057
    Income tax payable ....................................           1,835               --
    Net liabilities of discontinued operations ............             622            2,334
    Revolving line of credit ..............................          12,873               --
                                                                   --------         --------
          Total current liabilities .......................        $ 24,751           15,369
    Long-term debt, net of discount of $3,258 and $3,490 at
      June 30, 2001 and December 31, 2000, respectively ...          21,742           36,633
    Interest rate swap, at fair value .....................           1,397               --
    Other liabilities .....................................           1,094              937
                                                                   --------         --------
Commitments and contingencies .............................          48,984           52,939
Shareholders' equity:
    Common stock ..........................................             190              187
    Additional paid-in capital ............................          48,319           48,076
    Accumulated deficit ...................................         (26,110)         (25,353)
                                                                   --------         --------
          Total shareholders' equity ......................          22,399           22,910
                                                                   --------         --------
                                                                   $ 71,383         $ 75,849
                                                                   ========         ========
</TABLE>


     See accompanying notes to condensed consolidated financial statements.


                                       3
<PAGE>   4

            EMERGENT INFORMATION TECHNOLOGIES, INC. AND SUBSIDIARIES

                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                   THREE MONTHS ENDED                  SIX MONTHS ENDED
                                                                         JUNE 30,                          JUNE 30,
                                                                -------------------------         -------------------------
                                                                  2001             2000             2001             2000
                                                                --------         --------         --------         --------
<S>                                                             <C>              <C>              <C>              <C>

Net revenues ...........................................        $ 27,561         $ 31,382         $ 57,103         $ 62,229
Cost of revenues .......................................          17,312           18,641           35,469           37,299
                                                                --------         --------         --------         --------
    Gross margin .......................................          10,249           12,741           21,634           24,930
Selling, general & administrative expenses .............           8,267            7,944           17,699           15,623
Amortization of goodwill and other intangibles .........             414              437              826              842
                                                                --------         --------         --------         --------
    Operating income ...................................           1,568            4,360            3,109            8,465
Other expense, net .....................................           1,468              550            2,961              932
Unrealized (gain) loss on interest rate swap ...........            (164)              --              284               --
                                                                --------         --------         --------         --------
Income (loss) from continuing operations before taxes ..             264            3,810             (136)           7,533
Income tax expense (benefit) ...........................             140            1,638              (47)           3,239
                                                                --------         --------         --------         --------
    Income (loss) from continuing operations ...........             124            2,172              (89)           4,294
Loss from operations of discontinued business, net
  of income tax benefit of $1,709 and $3,183 in
  the three and six months ended June 30, 2000,
  respectively .........................................              --           (2,457)              --           (4,585)
Cumulative effect of adoption of FASB Statement No. 133,
  net of tax benefit of $445 ...........................              --               --             (668)              --
                                                                --------         --------         --------         --------
Net income (loss) ......................................             124             (285)            (757)            (291)
                                                                ========         ========         ========         ========
Income (loss) per share:
    Income (loss) from continuing operations ...........             .01              .13              .00              .26
    Loss from operations of discontinued business,
       net of tax ......................................              --             (.15)              --             (.28)
    Cumulative effect of accounting changes, net of tax               --               --             (.04)              --
                                                                --------         --------         --------         --------
Net income (loss) ......................................             .01             (.02)            (.04)            (.02)
                                                                ========         ========         ========         ========
Income (loss) per share - assuming dilution:
     Income (loss) from continuing operations ..........             .01              .13              .00               26
     Loss from operations of discontinued business,
        net of tax .....................................              --             (.15)              --             (.28)
     Cumulative effect of accounting change, net of tax               --               --             (.04)              --
                                                                --------         --------         --------         --------
      Net income (loss) ................................             .01             (.02)            (.04)        $   (.02)
                                                                ========         ========         ========         ========
Shares used in the computation of income (loss)
  per share:
    Basic ..............................................          18,949           16,199           18,921           16,190
    Diluted ............................................          18,967           16,238           18,921           16,218
</TABLE>


     See accompanying notes to condensed consolidated financial statements.


                                       4
<PAGE>   5

            EMERGENT INFORMATION TECHNOLOGIES, INC. AND SUBSIDIARIES

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                                     SIX MONTHS
                                                                                                   ENDED JUNE 30,
                                                                                               -----------------------
                                                                                                2001             2000
                                                                                               ------         --------
<S>                                                                                            <C>            <C>

CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss ..............................................................................          (757)        $   (291)
Adjustments to reconcile net (loss) income to net cash
  provided by (used in) operating activities:
    Loss from discontinued operations, net of tax .....................................            --            4,585
    Cumulative effect of adoption of FASB Statement No. 133, net of tax ...............           668               --
    Loss on change in fair value of interest rate swap ................................           284               --
    Loss on sale of property and equipment ............................................            10               --
    Depreciation and amortization .....................................................         1,872            1,803
    Deferred income taxes .............................................................         1,835               --
    Changes in assets and liabilities, net of effect of acquisitions:
      Accounts receivable, net ........................................................          (186)          (4,046)
      Prepaid and accrued income taxes ................................................         3,110              974
      Prepaid expenses and other assets ...............................................          (117)          (3,381)
      Trade accounts payable and accrued expenses .....................................        (3,801)             957
      Accrued compensation and payroll taxes ..........................................          (819)           1,462
      Other liabilities ...............................................................           887               18
                                                                                               ------         --------
        Net cash provided by (used in) operating activities ...........................         2,986            2,081

CASH FLOWS FROM INVESTING ACTIVITIES:
Payment under acquisitions agreements .................................................          (496)              --
Purchases of property and equipment ...................................................          (160)            (685)
Sales of property and equipment .......................................................           403               --
Acquisitions, net of cash acquired ....................................................            --          (13,730)
Repayments from shareholders ..........................................................            --              357
                                                                                               ------         --------
        Net cash used in investing activities .........................................          (253)         (14,058)

CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments under credit facility ......................................................        (2,250)              --
Borrowings under credit facility ......................................................            --           14,134
Amortization of proceeds from issuance of common stock ................................           246               --
Debt issuance costs ...................................................................           232               --
                                                                                               ------         --------
        Net cash provided by (used in) financing activities ...........................        (1,772)          14,134
                                                                                               ------         --------

        Net increase (decrease) in cash and cash equivalents from continuing operations           961            2,157
                                                                                               ------
        Net increase (decrease) in cash used by discontinued operations ...............        (1,711)          (3,119)
                                                                                               ------         --------
        Net increase (decrease) in cash and cash equivalents ..........................          (750)            (962)
Cash and cash equivalents at beginning of period ......................................         2,040            1,226
                                                                                               ------         --------
Cash and cash equivalents at end of period ............................................         1,290              264
                                                                                               ======         ========
SUPPLEMENTAL INFORMATION--CASH PAID (RECEIVED) FOR:
Interest ..............................................................................         1,899            1,516
Income taxes ..........................................................................        (5,082)             189
</TABLE>


     See accompanying notes to condensed consolidated financial statements.


                                       5
<PAGE>   6

            EMERGENT INFORMATION TECHNOLOGIES, INC. AND SUBSIDIARIES

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

            FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2001 AND 2000



NOTE 1. GENERAL

     The accompanying unaudited financial statements consolidate the accounts of
the Company and its wholly owned subsidiaries. The unaudited financial
statements have been prepared in accordance with accounting principles generally
accepted in the United States for interim financial information.

     In the opinion of management, all adjustments necessary for a fair
presentation of the information in the unaudited condensed consolidated
financial statements have been made and consist of only normal recurring
accruals. Operating results for the six-month period ended June 30, 2001, are
not necessarily indicative of the results that may be expected for the year
ending December 31, 2001. Although the Company believes that the disclosures in
these financial statements are adequate to make the information presented not
misleading, certain information and footnotes normally included in financial
statements prepared in accordance with accounting principles generally accepted
in the United States have been condensed or omitted pursuant to rules and
regulations of the Securities and Exchange Commission, and consequently, these
statements should be read in conjunction with the Company's consolidated
financial statements and notes thereto, contained in its Annual Report on Form
10-K for the year ended December 31, 2000.

     Certain reclassifications have been made to the prior period financial
statements to conform to the current period presentation.

DERIVATIVES AND HEDGING ACTIVITIES

     In June 1998, the Financial Accounting Standards Board issued Statement No.
133, "Accounting for Derivative Instruments and Hedging Activities". The
Statement requires the Company to recognize all derivatives on the balance sheet
at fair value. Derivatives that are not hedges must be adjusted to fair value
through income. If the derivative is a hedge, depending on the nature of the
hedge, changes in the fair value of derivatives are either offset against the
change in fair value of assets, liabilities, or firm commitments through
earnings or recognized in other comprehensive income until the hedged item is
recognized in earnings. The ineffective portion of a derivative's change in fair
value will be immediately recognized in earnings. The adoption of Statement No.
133 on January 1, 2001 resulted in the cumulative effect of an accounting change
of $668,000, net of tax benefit of $445,000, being recognized as expense in the
statement of operations.

RECENT ACCOUNTING PRONOUNCEMENTS

     In June 2001 the FASB issued Statement No. 141, Business Combinations
("Statement 141"), and No. 142, Goodwill and Other Intangible Assets ("Statement
142"), effective for fiscal years beginning after December 15, 2001. Under the
new rules, goodwill and intangible assets deemed to have indefinite lives will
no longer be amortized but will be subject to annual impairment tests in
accordance with Statements 141 and 142. Other intangible assets will continue to
be amortized over their useful lives.

     The Company will apply the new rules on accounting for goodwill and other
intangible assets beginning in the first quarter of 2002. During 2002, the
Company will perform the first of the required impairment tests of goodwill and
indefinite lived intangible assets as of January 1, 2002 and has not yet
determined what the effect of these tests will be on the earnings and financial
position of the Company.


                                       6
<PAGE>   7

            EMERGENT INFORMATION TECHNOLOGIES, INC. AND SUBSIDIARIES

       NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

            FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2001 AND 2000


NOTE 2. NET INCOME (LOSS) PER SHARE

     Basic net income (loss) per share is computed by dividing net income (loss)
by the weighted average number of common shares outstanding during the periods
presented. Diluted net income per share is computed by dividing net income
(loss) by the weighted average number of common and common equivalent shares
outstanding during the periods presented, assuming the exercise of all
in-the-money stock options. Common equivalent shares have not been included
where inclusion would be anti-dilutive.

     The following table illustrates the computation of basic and diluted
earnings per common share (in thousands, except per share data):

<TABLE>
<CAPTION>
                                                                 THREE MONTHS ENDED           SIX MONTHS ENDED
                                                                      JUNE 30,                     JUNE 30,
                                                                --------------------        --------------------
                                                                  2001          2000          2001          2000
                                                                ------        ------        ------        ------
<S>                                                             <C>           <C>           <C>           <C>

Denominator for basic income per share--weighted average
  shares outstanding during the period .................        18,949        16,199        18,921        16,190
Incremental common shares attributable to dilutive
outstanding stock options ..............................            18            39            --            28
                                                                ------        ------        ------        ------
Denominator for diluted income per common share ........        18,967        16,238        18,921        16,218
                                                                ======        ======        ======        ======
</TABLE>

     Anti-dilutive shares excluded from the reconciliation above were 2,456,335
and 2,397,509 for the three months ended June 30, 2001, and 2000, respectively.


NOTE 3. ACQUISITIONS

     In February 2000, the Company acquired substantially all of the assets and
assumed certain liabilities of System Simulation Solutions, Inc., ("S3I"). Under
the original agreement S3I had the right to receive up to approximately $1.03
million in additional consideration contingent upon S3I's achievement of certain
operating results for the twelve-month periods ending December 31, 2001 and
December 31, 2002. The earnouts are payable in cash and, if earned, are due
within 60 days after each of the first and second anniversary of the closing
date, and will be recorded as an addition to goodwill. The earnout for the
twelve-month period ending December 31, 2000 was $266,000 which amount was paid
by the Company in second quarter 2001. Other contractual consideration paid to
the S3I shareholders pursuant to the terms of the Asset Purchase Agreement
between the Company and S3I shareholders totaled $686,000 and also has been
reflected as an increase in goodwill in the accompanying condensed consolidated
financial statements. The Company has renegotiated the second year earnout for
which the Company's potential liability will be approximately $800,000.

     This transaction was accounted for as a purchase and, accordingly, the
consolidated financial statements include the financial results of S3I from
December 31, 2000, the beginning of the accounting period in which the purchase
transaction was finalized. Results of operations for the quarter ended March 31,
2000 would not have been materially impacted on a pro forma basis if the
acquisition of S3I had occurred as of the beginning of the period.


                                       7
<PAGE>   8

            EMERGENT INFORMATION TECHNOLOGIES, INC. AND SUBSIDIARIES

       NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

            FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2001 AND 2000


NOTE 4. REVOLVING LINE OF CREDIT

     The Company entered into a Second Amended and Restated Credit and Security
Agreement (the "Senior Facility"), dated December 29, 2000, by and among the
Company and its existing lending group, whereby the Amended and Restated Credit
Agreement dated June 7, 1999 (the "Original Facility") was amended and restated
to provide in part for an extension of the maturity date to January 31, 2002, to
reset financial covenants, to reduce the existing revolving loan lending
commitments to $22,700,000, and to permit the subordinated indebtedness
discussed in Note 5. Borrowings bear interest at the bank's prime rate plus 1%
(9% at June 30, 2001). The Senior Facility is secured by a lien on all of the
assets of the Company and its subsidiaries. Terms of the Agreement require the
Company to reduce the $22,700,000 in borrowing availability under the Senior
Facility to no more than $18,700,000 by the end of 2001. At June 30, 2001,
outstanding borrowings under the Senior Facility totaled $12,873,000. As of June
30, 2001, the Company was not in compliance with certain of the financial
covenants. The Company has obtained waivers from the lenders waiving the
non-compliance through June 30, 2001 and amending the covenants thereafter. As
of June 30, 2001, the Company had $5,061,939 in undrawn availability under the
Senior Facility.

     On May 12, 2000 the Company entered into an interest rate swap agreement to
manage its interest rate risk exposure. The agreement requires the Company to
pay a fixed rate of 7.5225% on $20 million and in turn receive a variable rate
of interest of one-month LIBOR. The agreement expires on June 1, 2004.

     During the quarters ended Mach 31, 2001 and June 30, 2001, the Company
recognized a loss of $448,000 and gain of $164,000, respectively, related to the
change in the fair value of the interest rate swap.


NOTE 5. LONG-TERM DEBT

     The Company entered into a Note and Stock Purchase Agreement (the
"Subordinated Debt Agreement") dated December 29, 2000, with various investors
(the "Purchasers"). In consideration of a $25,000,000 investment, the Company
issued to the Purchasers (i) 13% Senior Subordinated Notes due in 2005 in the
aggregate principal amount of $25,000,000 (the "Notes"), and (ii) 2,250,000
shares of the common stock of the Company ("Common Stock") with a fair value of
$1,968,750. The Subordinated Debt Agreement contains financial and other
covenants for the benefit of the Purchasers, and requires payment of a premium
if the Notes are prepaid within three years of the Closing (including a reduced
premium if repayment occurs in connection with a change of control of the
Company). As of June 30, 2001, the Company was not in compliance with certain of
the financial covenants contained in the Subordinated Debt Agreement. The
Company has obtained a waiver from the Purchasers through June 30, 2001 for such
non-compliance and the covenants have been amended thereafter. The Notes are not
secured.

     The value of the Common Stock issued and related financing costs of $3.3
million have been reflected as a discount on the Notes and are being amortized
over the term of the Notes. Interest expense related to the amortization of the
discount totaled $85,542 and $180,814 in the three and six months ended June 30,
2001, respectively.


                                       8
<PAGE>   9

            EMERGENT INFORMATION TECHNOLOGIES, INC. AND SUBSIDIARIES

       NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

            FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2001 AND 2000


NOTE 6. SEGMENT REPORTING DATA

     The Company classifies its operations into two lines of business, each
offering a distinct set of services. These lines of business are summarized as
follows: Steven Myers & Associates ("SM&A"), which assists clients with the
procurement of government and commercial programs and Government Services Group
("GSG") which provides systems engineering, scientific research, program
management and technical support services for the government and governmental
agencies.

     The Company evaluates performance based on several factors, of which the
primary financial measure is business segment operating income. The revenue
recognition policies of the business segments vary according to the type of
contract involved.

     Information as to the operations of the lines of business is set forth
below. The information presented represents historical supplemental data as
described on the consolidated balance sheets and on the consolidated statements
of operations (in thousands):

<TABLE>
<CAPTION>
                                                                  THREE MONTHS ENDED                 SIX MONTHS ENDED
                                                                        JUNE 30,                          JUNE 30,
                                                               -------------------------         -------------------------
                                                                 2001             2000             2001             2000
                                                               --------         --------         --------         --------
<S>                                                            <C>              <C>              <C>              <C>

NET REVENUES:
Steven Myers & Associates, Inc. .......................        $ 11,056         $ 17,169         $ 24,142         $ 33,605
Government Services Group .............................          16,505           14,213           32,961           28,624
                                                               --------         --------         --------         --------
        Total net revenues ............................          27,561           31,382           57,103           62,229
                                                               ========         ========         ========         ========
DEPRECIATION AND AMORTIZATION EXPENSE:
Steven Myers & Associates, Inc. .......................              92               12              227               25
Government Services Group .............................             812              899            1,550            1,753
Corporate Overhead ....................................              68               13               95               25
                                                               --------         --------         --------         --------
         Total depreciation and amortization expense ..             972              924            1,872            1,803
                                                               ========         ========         ========         ========
OPERATING INCOME:
Steven Myers & Associates, Inc. .......................           2,595            6,475            5,942           11,784
Government Services Group .............................             644            1,101              580            2,210
Corporate Overhead ....................................          (1,671)          (3,216)          (3,413)          (5,529)
                                                               --------         --------         --------         --------
         Total operating income .......................           1,568            4,360            3,109            8,465
                                                               ========         ========         ========         ========
INCOME  FROM CONTINUING OPERATIONS:
Steven Myers & Associates, Inc. .......................           2,589            6,475            5,929           11,784
Government Services Group .............................             699            1,100              645            2,135
Corporate Overhead ....................................           3,164           (5,403)           6,663           (9,624)
                                                               --------         --------         --------         --------
         Total income (loss) from continuing operations             124         $  2,172              (89)        $  4,295
                                                               ========         ========         ========         ========
</TABLE>


                                       9
<PAGE>   10

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

     From time to time, the Company, through its management, may make
forward-looking public statements, such as statements concerning expected future
revenues or earnings or concerning projected plans, performance, contract
procurement as well as other estimates relating to future operations.
Forward-looking statements may be in reports filed under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), in press releases or informal
statements made with the approval of an authorized executive officer. The words
or phrases "will likely result," "are expected to," "will continue," "is
anticipated," "estimate," "projected," or similar expressions are intended to
identify "forward-looking statements" within the meaning of Section 21E of the
Exchange Act and Section 27A of the Securities Act of 1933, as amended, as
enacted by the Private Securities Litigation Reform Act of 1995.

     The Company wishes to caution readers not to place undue reliance on these
forward-looking statements, which speak only as of the date on which they are
made. In addition, the Company wishes to advise readers that the factors listed
below, as well as other factors not currently identified by management, could
affect the Company's financial or other performance and could cause the
Company's actual results for future periods to differ materially from any
opinions or statements expressed with respect to future periods or events in any
current statement.

     The Company will not undertake and specifically declines any obligation to
publicly release any revisions which may be made to any forward-looking
statements to reflect events or circumstances after the date of such statements
or to reflect the occurrence of anticipated or unanticipated events which may
cause management to re-evaluate such forward-looking statements.

     In connection with the "safe harbor" provisions of the Private Securities
Litigation Reform Act of 1995, the Company is hereby filing cautionary
statements identifying important factors that could cause the Company's actual
results to differ materially from those projected in forward-looking statements
of the Company made by or on behalf of the Company.


                              RESULTS OF OPERATIONS

     The following table sets forth certain historical operating results as a
percentage of net revenues for the periods noted.

<TABLE>
<CAPTION>
                                                        THREE MONTHS ENDED               SIX MONTHS ENDED
                                                             JUNE 30,                        JUNE 30,
                                                      ----------------------          ----------------------
                                                       2001            2000            2001            2000
                                                      ------          ------          ------          ------
<S>                                                   <C>             <C>             <C>             <C>

Net revenues .................................         100.0%          100.0%          100.0%          100.0%
Cost of revenues .............................         (62.8)          (59.4)          (62.1)          (59.9)
                                                      ------          ------          ------          ------
   Gross margin ..............................          37.2            40.6            37.9            40.1
Selling, general and administrative expenses .          30.0            25.3            31.0            25.1
Amortization of goodwill and other intangibles           1.5             1.4             1.5             1.4
                                                      ------          ------          ------          ------
Operating income .............................           5.7            13.9             5.4            13.6
                                                      ======          ======          ======          ======
Income (loss) from continuing operations .....            .4             6.9             (.1)            6.9
Income (loss) from discontinued operations ...            --            (7.8)             --            (7.4)
Cumulative effect of accounting change .......            --              --             1.2              --
                                                      ------          ------          ------          ------
Net income (loss) ............................            .4%           (0.9%)          (1.3%)           (.5%)
                                                      ======          ======          ======          ======
</TABLE>


                                       10
<PAGE>   11

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS - (CONTINUED)


THREE MONTHS ENDED JUNE 30, 2001 COMPARED TO THREE MONTHS ENDED JUNE 30, 2000

     Net Revenues. Net revenues decreased $3.8 million, or 1.2% to $27.6 million
for the three months ended June 30, 2001 compared to $31.4 million for three
months ended June 30, 2000. Revenues declined due to the slowdown in proposal
management services in the SM&A segment and the completion of several service
contracts in the second and third quarter of 2000, which were not replaced. The
slowdown in proposal management services is due in part to the delay in Federal
government procurement decisions related to the new administration's review of
defense spending priorities.

     Gross Margin. Gross margin decreased $2.5 million, or 19.6%, to $10.2
million, for the three months ended June 30, 2001 as compared to $12.7 million
for the three months ended June 30, 2000. As a percentage of net revenues, gross
margin decreased to 37.2% compared to 40.7% for the prior year period. The gross
margin declined in both SM&A and GSG due to a change in the mix of the Company's
contracts and an increase in subcontract revenues which carry a significantly
lower margin than direct labor.

     Selling, General and Administrative Expenses, Amortization of Goodwill and
Other Intangibles. Selling, general and administrative expenses increased $.3
million, or 4%, to $8.3 million for the three months ended June 30, 2001, as
compared to the corresponding period of the prior year. As a percentage of
revenues, selling, general and administrative expenses increased to 30% for the
three months ended June 30, 2001, as compared to 25.4% for the prior year
period. These costs have increased since June 2000 due to the acquisitions the
Company made late in 1999 and in the first quarter of 2000. The Company put in
place a cost reduction plan in December of 2000. As a result, the selling,
general and administrative expenses have decreased by $1.1 million in the second
quarter to $8.3 from $9.4 million in the first quarter of 2001 due to these cost
reduction programs.

     Operating Income. Operating income was $1.6 million for the three months
ended June 30, 2001 compared to $4.4 million for the three months ended June 30,
2000, a decrease of $2.8 million. As a percentage of net revenues, operating
income decreased to 5.7% for the three months ended June 30, 2001 from 13.9% in
the prior year. Operating income declined due to lower gross margin dollars,
from reduced revenue and margins generated from a higher level of subcontract
revenue work at GSG.

     Other Expense, Net. Other expense, net was $1.5 million for three months
ended June 30, 2001 compared to $0.6 million for the three months ended June 30,
2000. The increase primarily results from increased interest expense of $.9
million caused by a higher level of debt at higher interest rates.

     Unrealized Gain on Interest Rate Swap. A gain of $.2 million resulted from
the change in the fair value of the Company's interest rate swap agreement.


                                       11
<PAGE>   12

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS - (CONTINUED)


SIX MONTHS ENDED JUNE 30, 2001 COMPARED TO SIX MONTHS ENDED JUNE 30, 2000

     Net Revenues. Net revenues decreased $5.1 million, or 8% to $57.1 million
for the six months ended June 30, 2001 compared to $62.2 million for the six
months ended June 30, 2000. Revenues declined due to the slowdown in proposal
management services in the SM&A segment and the completion of several service
contracts in the second and third quarter of 2000, which were not replaced. The
slowdown in proposal management services is due in part to the delay in Federal
government procurement decisions related to the new administration's review of
defense spending priorities.

     Gross Margin. Gross margin decreased $3.3 million, or 13%, to $21.6
million, for the six months ended June 30, 2001 as compared to $24.9 million for
the six months ended June 30, 2000. As a percentage of net revenues, gross
margin decreased to 37.9% compared to 40% for the prior year period. The gross
margin decreased in both SM&A and GSG due to a change in the contract mix and an
increase in subcontract revenues which carry significantly lower margins than
direct labor. In addition, the Company had a self-insured medical plan until May
2001, which significantly increased medical costs. In May 2001, the company
revised its plan. The gross margin decreased primarily due to an increase in
costs under the Company's self-insured medical program for employees.

     Selling, General and Administrative Expenses, Amortization of Goodwill and
Other Intangibles. Selling, general and administrative expenses increased $2.1
million, or 13.3%, to $17.7 million for the six months ended June 30, 2001, as
compared to $15.6 million for the six months ended June 30, 2000. As a
percentage of revenues, selling, general and administrative expenses increased
to 31.0% for six months ended June 30, 2001, as compared to 25.1% for the prior
year period. These costs increased as a result of approximately $625,000
invested in bid and proposal costs to support a major contract proposal in the
GSG segment, an increase in medical costs from a new self-insured medical
program, an increase in professional fees, and increased costs of administrative
personnel. The Company put in place a cost reduction program which included the
reduction of administrative personnel, the elimination of approximately 100,000
square feet of excess facility space and a revised medical plan. The cost
reduction program resulted in a decrease in costs of $1.1 million in the second
quarter 2001 compared to the first quarter.

     Operating Income. Operating income was $3.1 million for the six months
ended June 30, 2001 compared to $8.5 million for the six months ended June 30,
2000, a decrease of $5.4 million. As a percentage of net revenues, operating
income decreased to 5.4% for six months ended June 30, 2001 from 13.6% in the
prior year. Operating income declined due to lower gross margin dollars, reduced
revenue and margins generated from a higher level of subcontract revenue work at
GSG, increased labor costs, and the $2.1 million increase in operating expenses
as detailed above.

     Other Expense, Net. Other expense, net was $3.0 million for the six months
ended June 30, 2001 compared to $0.9 million for the six months ended June 30,
2000. The increase primarily results from increased interest expense of $2
million due to a higher level of debt at higher interest rates.

     Unrealized Loss on Interest Rate Swap. A loss of $.3 million resulted from
a change in the fair value of the Company's interest rate swap agreement.


                                       12
<PAGE>   13

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS - (CONTINUED)


                         LIQUIDITY AND CAPITAL RESOURCES

     Net Cash Provided by Operating Activities. For the six months ended June
30, 2001, net cash provided by operating activities of $2.9 million reflected
the Company's loss from operations less charges for depreciation, amortization
and other non-cash items and the receipt of approximately $5.3 million in income
tax refunds resulting from operating losses and the write-down of assets from
discontinued operations in the year ended December 31, 2000.

     Cash Used in Investing Activities. For the six months ended June 30, 2001,
net cash used in investing activities was $0.3 million related to additional
contingent consideration paid under acquisition agreements and purchase of
property and equipment, net of proceeds from the sale of property and equipment.

     Net Cash Provided by Financing Activities. For the six months ended June
30, 2001, net cash of $(1.8) million was used by financing activities primarily
for repayments made under the Company's credit facility.

     Net Cash Used in Discontinued Operations. For the six months ended June 30,
2001 net cash used in discontinued operations was $1.7 million. primarily
related to brokerage fees on the sublease of a facility, rent, consultants,
accounting and labor costs related to the Company's contractual commitments.

     Debt and Liquidity. As of June 30, 2001, the Company's total debt was $34.6
million, net of issuance costs of $3.3 million. The debt consists of $12.9
million in revolving credit advances outstanding and $25 million in 13% Senior
Subordinated notes which are due in 2005. As of June 30, 2001, the Company had
approximately $5.1 million in availability under its revolving credit
commitment.

     Definitive agreements with Kapos Associates Inc., ("KAI") and S3I obligate
the Company to make earnout payments contingent upon achievement of certain
operating results. The earnouts are payable in cash and, if earned, are due
within 60 days after the anniversary of the closing date. The earnout for the
twelve-month period ended December 31, 2000 for S3I was $266,000. KAI did not
meet their earnout criteria. The Company amended and extended the S3I earnout
period from December 31, 2001 to March 31, 2002. It is estimated the potential
liabilities for the extended earnout period will be approximately $800,000.

     Management expects that the Company's operations will generate cash in
2001. However, the Company does need working capital available to fund timing
differences between receipts and disbursements. It is anticipated that with the
internally generated working capital and the availability of funds under the
Company's revolving credit commitment, the Company will have sufficient
liquidity to finance its operations during 2001. In addition, the Company
continues to streamline its operations, reduce overhead and facility expenses
and improve pricing on its contracts, thereby increasing its ability to generate
cash from operations. The Company does not anticipate any need for cash other
than to fund ongoing operations through 2001. As of June 30, 2001, the Company
had approximately $5.1 million available for working capital under the revolving
credit commitment. There are no assurances that the Company will not violate its
financial covenants under its current credit facilities. If such a violation
were to occur, the liquidity provided to the Company by its credit facility may
not be available to the Company for working capital purposes.

     The Company recently began efforts to secure a new line of credit to
replace its current revolving line of credit, which expires in January 2002.
Should those efforts be unsuccessful, the Company may need to consider
alternative forms of debt financing, or the sale of certain assets, to retire
its current line of credit upon its expiration and to fund its operations on an
on-going basis. While we anticipate that the Company will be able to
successfully negotiate a new financing agreement, we cannot be certain that it
will be able to secure a new line of credit, or alternative forms of debt or
equity financing, on terms acceptable to the Company or at all.

                                       13
<PAGE>   14

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS - (CONTINUED)


                                  RISK FACTORS


THERE ARE RISKS ASSOCIATED WITH THE COMPANY'S ABILITY TO INTEGRATE ITS PRIOR
ACQUISITIONS

     In recent years, the Company expanded its operations through the
acquisition of complementary businesses.

     There can be no assurance that the anticipated economic, operational and
other benefits of these acquisitions will be realized or that the Company will
be able to successfully integrate these acquired businesses. The difficulties of
such integration may initially be increased by the need to integrate personnel
with different business backgrounds and corporate cultures. Failure to
effectively integrate the acquired companies may adversely affect the Company's
ability to bid successfully on certain engagements and otherwise grow its
business. Client dissatisfaction or performance problems at a single acquired
company could have an adverse effect on the reputation of the Company as a
whole, and this could result in increased difficulty in marketing services or
acquiring companies in the future. In addition, the Company cannot be certain
that the acquired companies will operate profitably. There are other risks with
acquisitions. These include diversion of management attention, potential loss of
key clients or personnel, risks associated with unanticipated problems,
liabilities or contingencies and risks of entering markets in which the Company
has limited or no direct expertise. The occurrence of some or all of the events
could have a material adverse effect on the business, operating results and
financial condition.

     The Company's ability to manage the integration of its operations will
require the Company to continue to improve its operational, financial and other
internal systems and to attract, develop, motivate and retain its employees. The
Company's rapid growth in prior years has presented and will continue to present
numerous operational challenges, such as the assimilation of financial reporting
systems and increased pressure on our senior management and will increase the
demands on our systems and internal controls. In addition, the Company's success
depends in large part upon its ability to attract, develop, motivate and retain
highly-skilled professionals and administrative employees. Qualified
professionals are currently in great demand and there is significant competition
for employees with the requisite skills from other major and boutique consulting
firms, research firms, government contractors, proposal management or business
acquisition departments of major corporations and other professional services
firms. There can be no assurance the Company will be able to attract and retain
the qualified personnel necessary to effectively manage its operations. To the
extent the Company is unable to manage its integration effectively and
efficiently, its business, financial condition and results of operations could
be materially and adversely affected.


THE COMPANY'S BUSINESS DEPENDS SUBSTANTIALLY ON THE DEFENSE INDUSTRY

     Approximately 40% of the Company's revenues were derived from the proposal
management services of SM&A for the second quarter ended June 30, 2001. In
addition, a significant portion of the Government Services Group's revenues,
approximately 60%, are derived from contracts or subcontracts with the U.S.
Government. For the foreseeable future, the Company expects that the percentage
of revenues attributable to such contracts will continue to be substantial. U.S.
Government expenditures for defense products may decline in the future with such
reductions having an effect on the Company's clients or, indirectly, on the
Company. A number of trends may contribute to such a decline, including:


                                       14
<PAGE>   15

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS - (CONTINUED)


     o    large weapon systems being replaced with smaller, more precise high
          technology systems;

     o    multiple procurements for similar weapons being consolidated into
          joint service procurements, such as the Joint Strike Fighter program;

     o    threat scenarios evolving away from global conflicts to regional
          conflicts;

     o    the continuing draw down of U.S. military forces in response to the
          end of the Cold War; and

     o    reductions or delays in procurements by the new U.S. Government
          administration.

     In the event expenditures for products of the type manufactured by the
Company's clients are reduced and not offset by other new programs or products,
there will be a reduction in the volume of contracts or subcontracts to be bid
upon by the Company's clients and, as a result, a reduction in the volume of
proposals managed by the Company. Unless offset, such reductions could
materially and adversely affect the Company's business, operating results and
financial condition.


THERE ARE RISKS ASSOCIATED WITH GOVERNMENT CONTRACTING

     The Company is subject to risks associated with compliance with
governmental regulations, both directly and through government-contractor
clients. The fines and penalties which could result from noncompliance with
appropriate standards and regulations, or a client's suspension or disbarment
from the bidding process for future government contracts could have a material
adverse effect on the Company's business, operating results and financial
condition. The Company is in the process of integrating the businesses it
acquired in 1998, 1999 and 2000 and has not yet put in place all systems and
procedures required for the satisfactory compliance with all government
regulations. If the Company cannot comply with all government reporting and
compliance it may be subject to fines, penalties or the loss of the ability to
retain government contract work.

     The Company relies on the continuance and expansion of its business on a
facility security clearance from the U.S. Government and individual security
clearances, at various levels, for a significant number of staff. There can be
no assurance that necessary security clearances will continue to be made
available by the U.S. Government.

     In addition, a significant portion of the Company's revenues is derived
from contracts or subcontracts with the U.S. Government. The Company's services
are performed pursuant to the following types of contracts:

     o    cost reimbursable;

     o    time-and-materials; and

     o    fixed-price contracts and subcontracts.

     Under fixed-price contracts, the Company bears any risk of increased or
unexpected costs that may reduce its profits or cause the Company to sustain a
loss.

     The Company's U.S. Government contracts and subcontracts are subject to
termination, reduction or modification as a result of changes in the U.S.
Government's requirements or budgetary restrictions, or at the convenience of
the U.S. Government. When the Company participates as a subcontractor, it is
also subject to the risk that the primary contractor may fail or become unable
to perform its duties and responsibilities as a prime contractor. If a contract
were to be terminated for convenience, the Company would be reimbursed for
allowable costs incurred up to the date of termination and would be paid a
proportionate amount of the stipulated profits or fees attributable to the work
actually performed.


                                       15
<PAGE>   16

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS - (CONTINUED)


     Contracts with the U.S. Government are generally complex in nature, and
require the Company to comply with numerous U.S. Government regulations
regarding discrimination in the hiring of personnel, fringe benefits for
employees, safety, safeguarding classified information, responsibility for U.S.
Government property, fire prevention, equipment maintenance, record keeping and
accounting, management qualifications, drug free work place and numerous other
matters.

     Under certain circumstances, the U.S. Government can suspend or bar
individuals or firms from obtaining future contracts with the U.S. Government
for specified periods of time. Any such suspension or disbarment of the Company
or of its major clients could have a material adverse effect upon the Company.
The Company's books and records are subject to annual audit by the Defense
Contract Audit Agency, which can result in adjustments to contract costs and
fees. If any costs are improperly allocated to a contract, such costs are not
reimbursable and, if already reimbursed, will require the Company to refund such
amounts to the government. If improper or illegal activities are discovered in
the course of any audits or investigations, the contractor may also be subject
to various civil and criminal penalties and administrative sanctions, including
termination of contracts, forfeitures of profits, suspension of payments, fines
and suspension or disqualification from doing business with the government. If
the Company becomes subject to penalties or sanctions, such penalties or
sanctions could have a material adverse effect on our business, financial
condition and results of operations. As of the date hereof, the government has
not completed its audit of the Company's books and records for 1998, 1999 and
2000.

THE COMPANY RELIES ON A RELATIVELY LIMITED NUMBER OF CLIENTS

     The Company derives a significant portion of revenues from a relatively
limited number of clients. For example, revenues from the ten most significant
clients accounted for approximately 79%, 80%, and 76%, of total revenues for the
years ended December 31, 2000, 1999, and 1998, respectively. Three clients, the
U.S. Government, Raytheon Systems Company, and Lockheed Martin Corporation
accounted for approximately 56%, 64%, and 58% of total revenues for the years
ended December 31, 2000, 1999 and 1998, respectively. Raytheon Systems Company
is the Company's single largest commercial client, accounting for approximately
17%, 20% and 16% of total revenues for the years ended December 31, 2000, 1999
and 1998, respectively.

     Clients typically retain the Company's services as needed on an engagement
basis rather than pursuant to long-term contracts, and a client can usually
terminate the engagement at any time without a significant penalty. Moreover,
there can be no assurance that existing clients will continue to engage the
Company for additional assignments or do so at the same revenue levels. The loss
of any significant client could materially and adversely affect the Company's
business, financial condition and results of operations. In addition, the level
of services required by an individual client may diminish over the life of the
relationship, and there can be no assurance the Company will be successful in
establishing relationships with new clients as this occurs.

THE MARKETS IN WHICH THE COMPANY OPERATES ARE HIGHLY COMPETITIVE

     The market for proposal management services in the procurement of
government and commercial contracts for aerospace and defense is a niche market
with a number of competitors. The Company is the largest provider of such
services and principally competes with numerous smaller proposal management
companies in this highly specialized industry. The Company also competes with
some of its clients' internal proposal development resources.

THE COMPANY RELIES HEAVILY UPON ITS KEY EMPLOYEES

     The Company's success is highly dependent upon the efforts, abilities,
business generation capabilities and project execution of its executive
officers, in particular those of Steven S. Myers, President, Chief Executive
Officer and Chairman of the Board. The loss of the services of Mr. Myers for any
reason could materially and adversely affect the Company's business, operating
results and financial condition.


                                       16
<PAGE>   17

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS - (CONTINUED)



QUARTERLY RESULTS MAY FLUCTUATE SIGNIFICANTLY

     The Company may experience significant fluctuations in future quarterly
operating results due to a number of factors, including the size, timing and
duration of client engagements.


THE STOCK PRICE IS SUBJECT TO SIGNIFICANT VOLATILITY

     The Company's common stock was first publicly traded on January 29, 1998
after the Company's initial public offering at $12.00 per share. Between January
29, 1998 and June 30, 2001, the closing sale price has ranged from a low of
$0.75 per share to a high of $31.13 per share. The market price of the Company's
common stock could continue to fluctuate substantially due to a variety of
factors, including:

     o    quarterly fluctuations in results of operations;

     o    adverse circumstances affecting the introduction or market acceptance
          of new services offered by the Company;

     o    announcements of new services by competitors;

     o    loss of key employees;

     o    changes in the regulatory environment or market conditions affecting
          the defense and aerospace industry;

     o    changes in earnings estimates and ratings by analysts;

     o    lack of market liquidity resulting from a relatively small amount of
          public stock float;

     o    changes in generally accepted accounting principles;

     o    sales of common stock by existing holders;

     o    the announcement and market acceptance of proposed acquisitions; and

     o    financial performance for any period, resulting in the violation of
          debt covenants with any of the Company's lenders which they are not
          willing to amend or waive and subsequent loss of available bank lines
          for working capital.

PRINCIPAL SHAREHOLDER HAS SIGNIFICANT CONTROL OVER THE COMPANY

     Steven S. Myers, President, Chief Executive Officer and Chairman of the
Board, beneficially owns or controls approximately 38.68% of the Company's
outstanding common stock and will have the ability to control or significantly
influence the election of directors and the results of other matters submitted
to a vote of shareholders. Such concentration of ownership may have the effect
of delaying or preventing a change in control of the Company and may adversely
affect the voting or other rights of other holders of common stock. The
Company's board of directors is currently comprised entirely of individuals
nominated with the approval of Mr. Myers.


                                       17
<PAGE>   18

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS - (CONTINUED)


LOSS OF LIQUIDITY

     The Company has a revolving credit commitment with three major banks. The
commitment expires January 31, 2002. There is risk that the Company may violate
covenants associated with this commitment which would result in the loss of the
Company's ability to borrow under the revolving credit agreement. There are no
assurances that the Company will be able to refinance the current commitment by
January 31, 2002.


ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK


     The principal market risk (i.e., the risk of loss arising from adverse
changes in market rates and prices) to which the Company is exposed is interest
rate risk.

     The interest rate the Company pays on its revolving line of credit is
subject to interest rate risk as it bears interest at the prevailing prime rate
plus 1%. The Company's long-term debt instruments carry fixed interest rates.
The Company estimates that a 10% increase in interest rates on the revolving
line of credit would result in a decrease in reported net income of
approximately $103,000 annually, based on the Company's current level of
borrowing.

     On May 12, 2000, the Company entered into an interest rate swap agreement
whereby it pays a fixed rate of interest of 7.5225% on $20 million, and receives
a variable rate of interest based on one-month LIBOR. The Company estimates that
a 10% decrease in LIBOR would decrease reported net income by approximately
$81,000 annually.

     This interest rate sensitivity analyses disregards the possibility that
rates can move in opposite directions and that gains from one category may or
may not be offset by losses from another category and vice versa.


                                       18
<PAGE>   19

                           PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

     Not Applicable.

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

     Amended and Restated Employee Stock Purchase Plan. In 1999, the Company
adopted an Employee Stock Purchase Plan (the "ESPP") with an initial allocation
of 250,000 shares. In September 2000, an additional 500,000 shares were
allocated to the ESPP. The Board of Directors approved an additional 200,000
shares subject to shareholder approval at the June 2001 annual shareholder
meeting. The ESPP allows employees of the Company to purchase common stock,
through bi-weekly payroll deductions, at a 15% discount. Employee contributions
to the ESPP are limited to 15% of the employee's annual compensation. Through
the quarter ended June 30, 2001, approximately 808,321 shares of Common Stock
have been purchased of the 950,000 shareholder approved shares reserved for
issuance under the ESPP.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

     Not Applicable.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     (a)       The Annual Meeting of Shareholders was held on June 6, 2001.

     (b)       Elected Directors

               Steven S. Myers, J. Christopher Lewis, Albert S. Nagy, Luther J.
               Nussbaum, and John R. Woodhull.

     (c)(i)    Election of five directors as follows:

                                       For           Against    Abstain
                                       ---           -------    -------
               Steven S. Myers         16,746,241    0          777,939
               J. Christopher Lewis    17,307,552    0          216,628
               Albert S. Nagy          16,770,632    0          753,548
               Luther J. Nussbaum      17,297,781    0          226,399
               John R. Woodhull        17,300,152    0          224,028

     (c)(ii)   To approve an amendment to the Company's Bylaws to increase the
authorized number of directors to a minimum of five (5) and a maximum of nine
(9):

               For:  17,365,929      Against:  94,273     Abstain:  63,978

     (c)(iii)  To approve an amendment to the Company's Amended 1997 Stock
Option Plan:

               For:  12,596,368      Against:  470,254    Abstain:  70,033
               Broker-Non Vote:  4,387,525

     (c)(iv)   To approve an amendment to the Company's Amended and Restated
Stock Purchase Plan, to increase the number of shares of common stock available
under the Restated Stock Purchase Plan to 950,000 shares:

               For:  12,959,571      Against:  112,144    Abstain:  64,940
               Broker-Non Vote:  4,387,525

ITEM 5. OTHER INFORMATION

     Not Applicable.


                                       19
<PAGE>   20

                    PART II - OTHER INFORMATION - (CONTINUED)


ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits (numbered in accordance with item 601 of Regulation S-K).

Exhibit No.
-----------

     2.1        Agreement and Plan of Reorganization and Merger dated May 18,
                1998, by and among the Company, Space Applications Corporation,
                SAC Acquisition, Inc. and the individual shareholders named
                therein (filed on June 4, 1998 as Exhibit 2 to the Company's
                Current Report on Form 8-K and incorporated herein by
                reference).

     2.2        Agreement and Plan of Reorganization and Merger dated July 22,
                1998, by and among the Company, Decision-Science Applications,
                Inc., DSA Acquisition, Inc. and the individual shareholders
                named therein (filed on August 21 1998 as Exhibit 2.1 to the
                Company's Current Report on Form 8-K and incorporated herein by
                reference).

     2.3        Agreement and Plan of Reorganization and Merger dated March 30,
                1999, by and among SM&A Corporation, Systems Integration
                Software, Inc., SIS Acquisition, Inc. and the individuals named
                therein (filed on May 17, 1999 as Exhibit 10.1 to the Company's
                Quarterly Report on Form 10-Q for the quarter ended March 31,
                1999 and incorporated herein by reference).

     2.4        Stock Purchase Agreement dated as of September 20, 1999, by and
                among SM&A Corporation (East), Kapos Associates Inc., Ervin
                Kapos, June Kapos, Verona Oliver, and Cordellia Scruggs (filed
                on November 15, 1999 as Exhibit 10.1 to the Company's Quarterly
                Report on Form 10-Q for the quarter ended September 30, 1999 and
                incorporated herein by reference).

     2.5        Agreement of Merger dated November 24, 1998 between Space
                Applications Corporation and SM&A Corporation (East), effective
                date December 31, 1998 (filed on March 31, 1999 as Exhibit 2.3
                to the Company's Annual Report on Form 10-K for the year ended
                December 31, 1998 and incorporated herein by reference).

     3.1        Articles of Incorporation, as amended and restated (filed on
                January 27, 1998 as Exhibit 3.1 to the Registrant's Registration
                Statement on Form S-1 (Registration No. 333-4075) and
                incorporated herein by reference).

     3.2        Bylaws of the Company, as amended and restated (filed on January
                5, 1998 as Exhibit 3.2 to the Company's Registration Statement
                on Form S-1 (Registration No. 333-4075) and incorporated herein
                by reference).

     3.3        Certificate of Ownership as filed with the California Secretary
                of State on August 6, 1998 (filed on August 19, 1998 as Exhibit
                3.1 to the Company's Current Report on Form 8-K and incorporated
                herein by reference).

     3.4        Certificate of Determination of Preferences of Series L
                Preferred Stock (filed in the Company's Annual Report on Form
                10-K for the year ending December 31, 2000 as Exhibit 3.4 filed
                on April 17, 2001 and incorporated herein by reference).

     4.1        Registration and Antidilution Rights Agreement, dated December
                29, 2000, by and among the Company and the Holders listed on the
                signature pages thereto (filed on January 8, 2001 as Exhibit
                99.5 to the Company's Current Report on Form 8-K and
                incorporated by reference herein).


                                       20
<PAGE>   21

                    PART II - OTHER INFORMATION - (CONTINUED)


     4.2        Controlling Shareholder Agreement, dated December 29, 2000, by
                and among the Company, Steven S. Myers as Common Stockholder,
                and the Purchasers listed on the signature pages thereto (filed
                on January 8, 2001 as Exhibit 99.6 to the Company's Current
                Report on Form 8-K and incorporated by reference herein).

     4.3        Registration Rights Agreement dated May 29, 1998 by and among
                the Company and certain shareholders of Space Applications
                Corporation identified therein (filed on June 4, 1998 as Exhibit
                2 to the Company's Current Report on Form 8-K and incorporated
                herein by reference).

     4.4        Registration Rights Agreement dated August 20, 1998 by and among
                Company and certain shareholders of Decision-Science
                Applications, Inc. set forth therein (filed on August 21, 1998
                as Exhibit 10.1 to the Company's Current Report on Form 8-K and
                incorporated herein by reference).

    10.1        Amended and Restated 1997 Stock Option Plan* and related form of
                Stock Option Agreement (filed on Company's Current Report on
                Form 10-K filed on April 17, 2001 as Exhibit 10.1 and
                incorporated herein by reference).

    10.2        Amended and Restated Employee Stock Purchase Plan (filed on
                Company's Current Report on Form 10-K filed on April 17, 2001 as
                Exhibit 10.2 and incorporated herein by reference).

    10.3        Form of Indemnification Agreement (filed on November 21, 1997 as
                Exhibit 10.2 to the Company's Registration Statement on Form S-1
                (Registration No. 3334075) and incorporated herein by
                reference).

    10.4        Office Facilities Lease (filed on November 21, 1997 as Exhibit
                10.3 to the Company's Registration Statement on Form S-1
                (Registration No. 333-4075) and incorporated herein by
                reference).

    10.5        Second Amended and Restated Credit and Security Agreement, dated
                December 29, 2000, by and among the Company, Mellon Bank, N.A.,
                as Agent, Wells Fargo Bank, N.A., as Co-Agent, and the Lenders
                listed on the signature pages thereto (filed on January 8, 2001
                as Exhibit 99.2 to the Company's Current Report on Form 8-K and
                incorporated by reference herein).

    10.6        Note and Stock Purchase Agreement, dated December 29, 2000, by
                and among the Company, and the Guarantors and Purchasers listed
                on the signature pages thereto (filed on January 8, 2001 as
                Exhibit 99.3 to the Company's Current Report on Form 8-K and
                incorporated by reference herein).

    10.7        Subordination and Intercreditor Agreement, dated December 29,
                2000, by and among the persons listed on the signature pages
                thereto as Subordinated Creditors, Libra Mezzanine Partners
                II-A, L.P. as agent of the Subordinated Creditors, the Company,
                and Mellon Bank, N.A. as agent for all Senior Lenders party to
                that certain Second Amended and Restated Credit and Security
                Agreement of even date therewith (filed on January 8, 2001 as
                Exhibit 99.4 to the Company's Current Report on Form 8-K and
                incorporated by reference herein).

    10.8        Management Agreement, dated December 29, 2000, by and between
                Libra Mezzanine Partners II-A, L.P. and the Company (filed on
                January 8, 2001 as Exhibit 99.7 to the Company's Current Report
                on Form 8-K and incorporated by reference herein).


                                       21
<PAGE>   22

                    PART II - OTHER INFORMATION - (CONTINUED)


    10.10       Employment Agreement dated August 20, 1998 by and between
                Decision-Science Applications, Inc. and Dana R. Raucher (filed
                on August 21, 1998 as Exhibit 10.4 to the Company's Current
                Report on Form 8-K and incorporated herein by reference).

    10.11       Employment Agreement dated September 20, 1999, by and between
                Kapos Associates Inc. and Ervin Kapos (filed on April 7, 2000 as
                Exhibit 10.18 to the Company's Annual Report on Form 10-K for
                the year ended December 31, 1999 and incorporated herein by
                reference).

    10.12       Escrow Agreement dated September 20, 1999, among SM&A
                Corporation (East), Kapos Associates Inc., Ervin Kapos and June
                Kapos and First American Trust Company (filed on November 15,
                1999 as Exhibit 10.2 to the Company's Quarterly Report on Form
                10-Q for the quarter ended September 30, 1999 and incorporated
                herein by reference).

    10.13       Escrow Agreement dated March 30, 1999, among the Company,
                Systems Integration Software, Inc., First American Trust Company
                and the individuals names therein (filed on May 17, 1999 as
                Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q for
                the quarter ended March 31, 1999 and incorporated herein by
                reference).

    10.14       Escrow Agreement dated August 20, 1998 by and between
                Decision-Science Applications, Inc., First American Trust
                Company and certain shareholders identified therein (filed on
                August 21, 1998 as Exhibit 10.5 to the Company's Current Report
                on Form 8-K and incorporated herein by reference).

    10.15       Employment Agreement dated as of February 1, 2000 between the
                Company and Steven S. Myers (filed on Company's Current Report
                on Form 10-K filed on April 17, 2001 as Exhibit 10.17 and
                incorporated herein by reference).

    10.16       Asset Purchase Agreement dated January 11, 2001, by and between
                Emergent Information Technologies, Inc., and Lynch & Company,
                Inc.*

    10.17       Asset Sale and Purchase Agreement dated March 23, 2001, by and
                between Emergent Information Technologies, Inc., and ICCE
                Technologies, Inc.*

-----------------

*Filed herewith.

     (b)  Reports on Form 8-K

     On May 9, 2001, the Company filed with the Securities and Exchange
Commission a Current Report on Form 8-K reporting the Company's May 3, 2001,
dismissal of KPMG, LLP ("KPMG") as its independent accountant. The reports of
KPMG on the Company's financial statements for the past two fiscal years
contained no adverse opinion or disclaimer of opinion and were not qualified or
modified as to uncertainty, audit scope or accounting principles. On May 3,
2001, the Company hired the firm of Ernst & Young, LLP as its independent
accountants.

     On May 23, 2001, the Company filed with the Securities and Exchange
Commission a Current Report on Form 8-K reporting the resignation of Mr. Vincent
C. Smith as a member of the Company's Board of Directors. On May 4, 2001, The
Company received by mail, a letter of resignation of Mr. Smith. The letter
stated that Mr. Smith's resignation was effective April 27, 2001. Mr. Smith
previously had indicated that he would not stand for re-election to the Board at
the annual meeting of shareholders of June 6, 2001, because of the Company's
shift away from commercial software product development. To the Company's
knowledge, neither Mr. Smith's decision not to stand for re-election nor his
resignation prior to the annual meeting arise out of any disagreement with the
Company or its management regarding the Company's operations, policies or
practices.


                                       22
<PAGE>   23

                                    SIGNATURE

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

                                         EMERGENT INFORMATION TECHNOLOGIES, INC.


                                         By: /s/ CATHY L. WOOD
                                             -----------------------------------
Dated:  August 14, 2001                          Cathy L. Wood
                                                 Chief Financial Officer and
                                                 Secretary
                                                 (Principal Accounting Officer)


                                       23

<PAGE>   24

                                 EXHIBIT INDEX

Exhibit No.
-----------

     2.1        Agreement and Plan of Reorganization and Merger dated May 18,
                1998, by and among the Company, Space Applications Corporation,
                SAC Acquisition, Inc. and the individual shareholders named
                therein (filed on June 4, 1998 as Exhibit 2 to the Company's
                Current Report on Form 8-K and incorporated herein by
                reference).

     2.2        Agreement and Plan of Reorganization and Merger dated July 22,
                1998, by and among the Company, Decision-Science Applications,
                Inc., DSA Acquisition, Inc. and the individual shareholders
                named therein (filed on August 21 1998 as Exhibit 2.1 to the
                Company's Current Report on Form 8-K and incorporated herein by
                reference).

     2.3        Agreement and Plan of Reorganization and Merger dated March 30,
                1999, by and among SM&A Corporation, Systems Integration
                Software, Inc., SIS Acquisition, Inc. and the individuals named
                therein (filed on May 17, 1999 as Exhibit 10.1 to the Company's
                Quarterly Report on Form 10-Q for the quarter ended March 31,
                1999 and incorporated herein by reference).

     2.4        Stock Purchase Agreement dated as of September 20, 1999, by and
                among SM&A Corporation (East), Kapos Associates Inc., Ervin
                Kapos, June Kapos, Verona Oliver, and Cordellia Scruggs (filed
                on November 15, 1999 as Exhibit 10.1 to the Company's Quarterly
                Report on Form 10-Q for the quarter ended September 30, 1999 and
                incorporated herein by reference).

     2.5        Agreement of Merger dated November 24, 1998 between Space
                Applications Corporation and SM&A Corporation (East), effective
                date December 31, 1998 (filed on March 31, 1999 as Exhibit 2.3
                to the Company's Annual Report on Form 10-K for the year ended
                December 31, 1998 and incorporated herein by reference).

     3.1        Articles of Incorporation, as amended and restated (filed on
                January 27, 1998 as Exhibit 3.1 to the Registrant's Registration
                Statement on Form S-1 (Registration No. 333-4075) and
                incorporated herein by reference).

     3.2        Bylaws of the Company, as amended and restated (filed on January
                5, 1998 as Exhibit 3.2 to the Company's Registration Statement
                on Form S-1 (Registration No. 333-4075) and incorporated herein
                by reference).

     3.3        Certificate of Ownership as filed with the California Secretary
                of State on August 6, 1998 (filed on August 19, 1998 as Exhibit
                3.1 to the Company's Current Report on Form 8-K and incorporated
                herein by reference).

     3.4        Certificate of Determination of Preferences of Series L
                Preferred Stock (filed in the Company's Annual Report on Form
                10-K for the year ending December 31, 2000 as Exhibit 3.4 filed
                on April 17, 2001 and incorporated herein by reference).

     4.1        Registration and Antidilution Rights Agreement, dated December
                29, 2000, by and among the Company and the Holders listed on the
                signature pages thereto (filed on January 8, 2001 as Exhibit
                99.5 to the Company's Current Report on Form 8-K and
                incorporated by reference herein).

<PAGE>   25

     4.2        Controlling Shareholder Agreement, dated December 29, 2000, by
                and among the Company, Steven S. Myers as Common Stockholder,
                and the Purchasers listed on the signature pages thereto (filed
                on January 8, 2001 as Exhibit 99.6 to the Company's Current
                Report on Form 8-K and incorporated by reference herein).

     4.3        Registration Rights Agreement dated May 29, 1998 by and among
                the Company and certain shareholders of Space Applications
                Corporation identified therein (filed on June 4, 1998 as Exhibit
                2 to the Company's Current Report on Form 8-K and incorporated
                herein by reference).

     4.4        Registration Rights Agreement dated August 20, 1998 by and among
                Company and certain shareholders of Decision-Science
                Applications, Inc. set forth therein (filed on August 21, 1998
                as Exhibit 10.1 to the Company's Current Report on Form 8-K and
                incorporated herein by reference).

    10.1        Amended and Restated 1997 Stock Option Plan* and related form of
                Stock Option Agreement (filed on Company's Current Report on
                Form 10-K filed on April 17, 2001 as Exhibit 10.1 and
                incorporated herein by reference).

    10.2        Amended and Restated Employee Stock Purchase Plan (filed on
                Company's Current Report on Form 10-K filed on April 17, 2001 as
                Exhibit 10.2 and incorporated herein by reference).

    10.3        Form of Indemnification Agreement (filed on November 21, 1997 as
                Exhibit 10.2 to the Company's Registration Statement on Form S-1
                (Registration No. 3334075) and incorporated herein by
                reference).

    10.4        Office Facilities Lease (filed on November 21, 1997 as Exhibit
                10.3 to the Company's Registration Statement on Form S-1
                (Registration No. 333-4075) and incorporated herein by
                reference).

    10.5        Second Amended and Restated Credit and Security Agreement, dated
                December 29, 2000, by and among the Company, Mellon Bank, N.A.,
                as Agent, Wells Fargo Bank, N.A., as Co-Agent, and the Lenders
                listed on the signature pages thereto (filed on January 8, 2001
                as Exhibit 99.2 to the Company's Current Report on Form 8-K and
                incorporated by reference herein).

    10.6        Note and Stock Purchase Agreement, dated December 29, 2000, by
                and among the Company, and the Guarantors and Purchasers listed
                on the signature pages thereto (filed on January 8, 2001 as
                Exhibit 99.3 to the Company's Current Report on Form 8-K and
                incorporated by reference herein).

    10.7        Subordination and Intercreditor Agreement, dated December 29,
                2000, by and among the persons listed on the signature pages
                thereto as Subordinated Creditors, Libra Mezzanine Partners
                II-A, L.P. as agent of the Subordinated Creditors, the Company,
                and Mellon Bank, N.A. as agent for all Senior Lenders party to
                that certain Second Amended and Restated Credit and Security
                Agreement of even date therewith (filed on January 8, 2001 as
                Exhibit 99.4 to the Company's Current Report on Form 8-K and
                incorporated by reference herein).

    10.8        Management Agreement, dated December 29, 2000, by and between
                Libra Mezzanine Partners II-A, L.P. and the Company (filed on
                January 8, 2001 as Exhibit 99.7 to the Company's Current Report
                on Form 8-K and incorporated by reference herein).

<PAGE>   26

    10.10       Employment Agreement dated August 20, 1998 by and between
                Decision-Science Applications, Inc. and Dana R. Raucher (filed
                on August 21, 1998 as Exhibit 10.4 to the Company's Current
                Report on Form 8-K and incorporated herein by reference).

    10.11       Employment Agreement dated September 20, 1999, by and between
                Kapos Associates Inc. and Ervin Kapos (filed on April 7, 2000 as
                Exhibit 10.18 to the Company's Annual Report on Form 10-K for
                the year ended December 31, 1999 and incorporated herein by
                reference).

    10.12       Escrow Agreement dated September 20, 1999, among SM&A
                Corporation (East), Kapos Associates Inc., Ervin Kapos and June
                Kapos and First American Trust Company (filed on November 15,
                1999 as Exhibit 10.2 to the Company's Quarterly Report on Form
                10-Q for the quarter ended September 30, 1999 and incorporated
                herein by reference).

    10.13       Escrow Agreement dated March 30, 1999, among the Company,
                Systems Integration Software, Inc., First American Trust Company
                and the individuals names therein (filed on May 17, 1999 as
                Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q for
                the quarter ended March 31, 1999 and incorporated herein by
                reference).

    10.14       Escrow Agreement dated August 20, 1998 by and between
                Decision-Science Applications, Inc., First American Trust
                Company and certain shareholders identified therein (filed on
                August 21, 1998 as Exhibit 10.5 to the Company's Current Report
                on Form 8-K and incorporated herein by reference).

    10.15       Employment Agreement dated as of February 1, 2000 between the
                Company and Steven S. Myers (filed on Company's Current Report
                on Form 10-K filed on April 17, 2001 as Exhibit 10.17 and
                incorporated herein by reference).

    10.16       Asset Purchase Agreement dated January 11, 2001, by and between
                Emergent Information Technologies, Inc., and Lynch & Company,
                Inc.*

    10.17       Asset Sale and Purchase Agreement dated March 23, 2001, by and
                between Emergent Information Technologies, Inc., and ICCE
                Technologies, Inc.*

-----------------

*Filed herewith.