UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K

(Mark One)

X    Annual  report  pursuant  to  Section  13 or  15(d) of the  Securities  and
     Exchange Act of 1934

For the fiscal year ended December 31, 1998

     Transition  report  pursuant to Section 13 or 15(d) of the  Securities  and
     Exchange Act of 1934

     For the transition period from ________ to ___________

Commission file number: 333-5753

                           Exigent International, Inc.
             (Exact name of Registrant as specified in its charter)

       Delaware                                             59-3379927
 (State of Incorporation)                                 (I.R.S. Employer
                                                        Identification Number)

                       1225 Evans Road, Melbourne, Florida
                   32904-2314 (Address of principal executive
                               offices) (Zip code)

                                  407-952-7550
               (Registrant's telephone number including area code)

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

        Title of  Securities                       Exchanges on which Registered

  Common Shares, $0.01 par value per share           Nasdaq SmallCap Market
                                                     The Chicago Stock Exchange
  Common Stock Purchase Warrants                     Nasdaq SmallCap Market
                                                     The Chicago Stock Exchange

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

                    Common Shares, $0.01 par value per share
                         Common Stock Purchase Warrants

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

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

     As of March 12, 1999, the aggregate market value of the Common Stock of the
Registrant  (based upon the  average  bid and ask prices of the Common  Stock as
reported by the market  makers) held by  non-affiliates  of the  Registrant  was
approximately $12,698,283.

     The number of shares outstanding of the registrant's  Common Stock on March
12, 1999 was 4,192,153.


                       Documents Incorporated by Reference

               Portions of the Proxy  Statement  for the 1999 Annual  Meeting of
Stockholders  to be held  June 30,  1999 (to be filed  with the  Securities  and
Exchange  Commission on or before April 30, 1999) are  incorporated by reference
into Part III hereof.

<PAGE>

                                TABLE OF CONTENTS







PART I......................................................................4

Item 1.  Business...........................................................4

Item 2.  Properties.........................................................9

Item 3.  Legal Proceedings..................................................9

Item 4.  Submission of Matters to a Vote of Security Holders................9


PART II....................................................................10

Item 5.  Market  for   Registrant's   Common  Equity  and  Related
          Stockholder Matters..............................................10

Item 6.  Selected Financial Data...........................................11

Item 7.  Management's Discussion and Analysis of Financial Condition
           and Results of Operations.......................................12

Item 8.  Financial Statements and Supplementary Data.......................12

Item 9.  Changes in and Disagreements With Accountants
           on Accounting and Financial Disclosures.........................12


PART III...................................................................44

Item 10.  Directors and Executive Officers of the Registrant...............44

Item 11.  Executive Compensation...........................................44

Item 12.  Security Ownership of Certain Beneficial Owners
           and Management..................................................44

Item 13.  Certain Relationships and Related Transactions...................44


PART IV....................................................................45

Item 14.  Exhibits, Financial Statement Schedules, and
           Reports on Form 8-K.............................................45


SIGNATURES.................................................................49

<PAGE>

PART I

Item 1.   Business

          The  Business  section,   Management's   Discussion  and  Analysis  of
Financial  Condition and Results of Operations and other parts of this Form 10-K
contain   certain   statements   that  are  not   historical   facts  which  are
"forward-looking   statements,"   and   can  be   identified   by  the   use  of
forward-looking  terminology  such  as  "believes,"  "expects,"  "may,"  "will,"
"should," or "anticipates," the negatives thereof or other variations thereon or
comparable  terminology,  and include  statements  as to the  intent,  belief or
current  expectations  of  Exigent  International,  Inc.  and  its  subsidiaries
("Exigent" or the  "Company") and its  directors,  officers and management  with
respect to future  operations,  performance  or position of the  Company.  These
forward-looking statements are predictions.  No assurances can be given that the
future results indicated, whether expressed or implied, will be achieved.

The Company

          Exigent  International,  Inc. is a holding  company,  incorporated  on
March  25,  1996 to  capitalize  on  emerging  opportunities  in the  fields  of
satellite  command  and control  and  telecommunications.  Exigent was formed by
Software  Technology,  Inc., a Florida corporation  ("STI"), to acquire and hold
all of the issued and  outstanding  stock of STI. On January 30,  1997,  Exigent
acquired all of the issued and  outstanding  STI stock in exchange for 3,486,600
Exigent  Common  Shares  and  697,320  Exigent  Class A  Preferred  Shares  (the
"Exchange").  Exigent also issued 645,270  Warrants in exchange for STI warrants
held by STI  shareholders.  Upon the  completion of the  Exchange,  STI became a
wholly  owned  subsidiary  of Exigent.  In addition,  on January 30,  1997,  the
Company issued 425,000 Warrants to Monogenesis Corporation.

          As shown in the following chart,  Exigent  presently  operates through
three  wholly-owned  subsidiaries.  These are STI,  FotoTag,  Inc.,  a  Delaware
corporation  ("FTI"),  and  Middleware  Solutions,  Inc.,  a Nevada  corporation
("MWare"):


                           Exigent International, Inc.
                                        |
                                        |
          |                             |                        |
          |                             |                        |
          |                             |                        |
 Software Technology, Inc.         FotoTag, Inc.      Middleware Solutions, Inc.

          The Company, through STI, has designed and deployed satellite command
and control and  telecommunications  systems  for more than  twenty  years.  The
Company has provided  ground  control  solutions  for dozens of  commercial  and
government  projects,  ranging from single  spacecraft to the largest  satellite
constellations.

          As world-wide demand for  satellite-based  applications has increased,
Exigent has responded by developing a suite of commercial-off-the-shelf ("COTS")
products based on the Company's  decades of experience in building such systems.
Exigent  engineers  also  provide  system  integration   support  for  customers
throughout the United States.


<PAGE>


Software Technology, Inc.

          Since  its  formation  in  1978,  STI has  provided  custom  and  COTS
software, systems engineering, and software engineering services to a wide range
of industry and government clients including:

o         Agencies and  departments of the U.S.  government  that use satellites
          for research, communication, or in defense programs.

o         Commercial telecommunication companies,  particularly those focused on
          low-earth-orbit ("LEO") satellite systems providing wireless telephone
          services and paging.

o         Commercial  and  government  customers  that require MIS and data base
          development services.

o         Commercial launch  facilities and contractors that provide  commercial
          launch services.

o         Aerospace and defense contractors that develop  computerized  weaponry
          and  defense  systems  employing  satellite   technology,   especially
          embedded software systems.

o         Value Added  Resellers  ("VARs") and  strategic  partners that develop
          custom or specialized computer applications.

o         Engineering   firms  that  require  software  design  and  development
          services.

          In addition to providing  general-purpose  and customized  engineering
solutions,  the Company has  developed the  OS/COMET(TM)(1)  family of products:
This suite of command and control  software  products is the Company's  flagship
software  offering.  Originally  developed  for the support of satellite  ground
stations,  and for  spacecraft  integration  and testing,  this related group of
software products has evolved into a general-purpose, integrated tool set. These
COTS  programs  provides a  real-time  command,  control,  and data  acquisition
environment for government and commercial  solutions.  OS/COMET  products can be
adapted to many complex control situations,  on the ground or in space. OS/COMET
executes on POSIX-compliant  UNIX(R)(2)  workstations and makes extensive use of
the "X Window  System(3)"  and the "OSF/Motif  (4)"  graphical user  environment
standards. It includes the following family of products:  

          OS/COMET  is in  current  use in the  world's  two  largest  satellite
constellations,  Iridium(R)(5)  and GPS. OS/COMET is the control system used for
each Iridium  satellite  as well as the  constellation  overall.  "Iridium" is a
global wireless  communication system built by a consortium of investors lead by
Motorola,  Inc.  Iridium offers local calling and paging  anywhere on the planet
through a  constellation  of 66 Low Earth  Orbit  ("LEO")  satellites  (plus six
on-orbit  spares).  As a result of the STI's performance on the Iridium program,
coupled  with a long-term  strategic  agreement  between  Motorola  and Exigent,
Exigent  was  selected  by  Motorola  as the  preferred  supplier of command and
control software for the Celestri(6) and future communication systems (including
Teledesic, a constellation of broadband satellites conceived to be the "Internet
in the Sky").

          OS/COMET was also selected to upgrade the ground station  software for
the NAVSTAR Global  Positioning  System ("GPS").  A project of the United States
Air Force, the 24-satellite GPS  constellation  provides  worldwide all- weather
positioning,  navigation  data,  and  nuclear  detonation  detection.  GPS's  24
satellites provide worldwide navigation data for military and civilian aircraft,
spacecraft and land and marine applications.

          OS/ICC  (Integrated  Control Center) is a versatile,  extensible,  and
scaleable  suite  of  services  and  equipment  that  combines  industry-leading
hardware and software products into an integrated  solution.  OS/ICC can be used
"out of the  box" in its  standard  form,  and yet is  highly  customizable  for
special customer applications.  The purpose of the OS/ICC is to provide seamless
software and hardware reuse and automation across the whole mission  life-cycle,
from early mission planning and modeling,  through vehicle testing, all the way 
to on-orbit  spacecraft  management.  It is designed to handle projects  ranging
from single satellites to large constellations.

--------  

(1)  OS/COMET is a trademark of Exigent International, Inc.

(2)  UNIX is a registered  trademark in the United  States and other  countries,
     licensed exclusively through X/Open Company, Limited.

(3)  X  Window  System  is  a  trademark  of  the  Massachusetts   Institute  of
     Technology.

(4)  OSF/Motif is a trademark of the Open Software Foundation.

(5)  IRIDIUM is a registered trademark and service mark of Iridium LLC (1997)

(6)  Celestri is a trademark of Motorola,Inc.

<PAGE>

               Calypso and Calypso Pro products are telemetry data decommutation
and distribution  tools; the "Pro" suffix indicates an extensible version of the
basic product. These are cost-effective, easy-to-use and are designed for use in
single-node  applications  and  test  beds  that  do  not  require  the  complex
functionality of the more advanced products such as OS/COMET or OS/COMET Solo.

          The Pluto  Satellite Tool Kit deploys complex model  architecture  and
numerous  core  components  for  the  creation  of a  "virtual  satellite."  The
satellite  model so  generated  can be  defined  to be  identical  to an  actual
spacecraft. Pluto's object-oriented architecture breaks the satellite into a set
of  user-defined   sub-systems,   using  standard  object-oriented   programming
techniques.

FotoTag, Inc.

          FTI was formed in 1997 to provide improved  efficiency and security in
the public transportation environment.  FTI develops and markets internationally
a passenger/baggage reconciliation system, "FotoTag(R)(7)", for use by airlines,
airports,  and other commercial  transportation  systems such as cruise lines or
railroads.  Sales venues for Fototag  products and services  include foreign and
domestic  airlines,  and foreign and domestic agencies that control airports and
airport security.

          The  FotoTag   product  is  primarily  an  airport   passenger/baggage
reconciliation  system.  It is expected to provide  enhanced  departure  control
facilities,   improve  passenger  servicing,  and  reduce  airline  and  airport
management  costs.  The system uses  IATA-standard  barcode,  "smart card",  and
radio-frequency   identification  (RFID)  technology,  coupled  with  compressed
digital photography. The FotoTag system captures passenger images and associates
this visual information with itinerary, baggage, and related travel documents.

Middleware Solutions, Inc.

          MWare is an  eCommerce  company  formed by the Company in 1998.  MWare
develops  inexpensive,   high-performance  message-oriented  middleware  ("MOM")
products,  and distributes them directly to the end-user over the Internet or on
CD through the mail.

          MWare's  first  product is  InterPlay  for  Windows.  InterPlay  is an
advanced MOM  publish/subscribe  tool that  provides an  application-transparent
messaging  facility for ActiveX  environments such as Microsoft's  Visual Basic,
Visual C++, and Inprise's C++ Builder 3. InterPlay  provides  developers  with a
networking  system  for  the  Microsoft(R)  Windows(R)(8)  environment,   priced
substantially   below   existing   products.   InterPlay  is  intended  to  make
sophisticated cost-effective networking available to the millions of application
developers  currently working in the Windows world. The target audience for this
product  includes  programmers  who are developing  software for the high-volume
commercial  marketplace (business  applications,  games, etc.), as well as those
producing in-house applications, at any scale from just a few up to thousands of
network  nodes.  InterPlay  supports  virtually  any network  type or  topology,
whether local- area (LAN), wide-area (WAN), or the WorldWide Web.

Software Development

          Exigent  invested  substantial  funds on software  development for the
development  or  enhancement   of  products   which   management   believes  are
commercially marketable.  Generally,  most of the Company's software development
relates to satellite command and control,  developing systems for the ground and
space  segments  of  the  aerospace/defense   industry,  and  telephone  systems
providers in the telecommunications industry.

--------

(7)  FotoTag is a registered trademark of Exigent International, Inc.

(8)  Microsoft and Windows are registered trademarks of Microsoft Corporation.

<PAGE>

               Exigent invests significantly in product development. The Company
capitalized $3,906,643,  $1,149,685,  and $556,167 of product development in the
fiscal  years  ended   December  31,  1998  and  January  31,  1998,  and  1997,
respectively. These amounts include investments allocated to the OS/COMET family
of products and FTI.

               Exigent expensed  $180,673,  $47,854,  and $239,986 in its fiscal
years ended  December  31,  1998,  January 31, 1998 and 1997,  respectively,  on
internally sponsored research and development.  These expenditures were made for
the  evaluation  of new  products  and  technologies  to expand and  enhance the
Company's products and services.

Marketing and Sales

               The Company relies upon senior  corporate  management,  sales and
marketing  personnel,  project  managers and senior technical staff to carry out
its  marketing  program,  including the  development  and execution of marketing
plans,  proposal  presentations  and the  performance  of related  tasks.  These
individuals collect information concerning requirements of current and potential
customers  in the  course  of  contract  performance  and  formal  and  informal
briefings,  from published literature and through  participation in professional
and  industry  organizations.  Senior  management  evaluates  this  information,
identifies  potential business  opportunities and coordinates  proposal efforts.
The primary source of business in the Company's  existing markets is by referral
from existing  customers.  Additionally,  the Company advertises  extensively in
various industry publications and participates in various trade shows, including
the recent "Satellite99 Conference".

               The Company  distributes  its  products and services and licenses
its products (a) indirectly through VARs and (b) directly to end users.

Revenue Sources

               The  Company's   revenues  are   currently   dependent  on  three
significant  customers,  the Naval Research Laboratory ("NRL"),  Motorola,  Inc.
("Motorola") and Lockheed Martin  Corporation  ("Lockheed").  Aggregate sales to
each of NRL, Lockheed, and Motorola for the Company's fiscal year ended December
31, 1998 were in excess of 10% of the Company's  consolidated revenues. The loss
of NRL,  Motorola or Lockheed as a customer would have a material adverse effect
on the business,  results of operations,  and financial condition of the Company
and its subsidiaries  taken as a whole.  During the eleven months ended December
31, 1998,  the Company  entered into a contract with a new  government  customer
which  may  extend  into  October  2003  with  an  initial  value  estimated  at
$7,500,000. This effort is to provide applications system engineering related to
the client's  management  information  system. The Company expects business with
this  organization to grow and provide  revenue in addition to that  anticipated
from above named customers.

               The  government  contracts  to which the  Company  is a party are
subject to termination at the election of the contracting government entity.

               See "Item 7.  Management's  Discussion  and Analysis of Financial
Condition and Results of Operations" and Note 12 to the Financial Statements for
additional information on the Company's dependence on certain customers.

Contracts

               Generally, the Company's government contracts specify goals to be
reached and estimate the number of hours of work of various  levels of employees
required to reach the goals. The contract price is based on pre-approved, hourly
rates for employees' time with certain pre-approved  overhead costs included. If
the goals are met in fewer  hours,  the contract  value is reduced.  If it takes
more hours than estimated to meet goals, the resulting fee percentage is reduced
on a pro rata basis based on cost of actual hours  delivered  versus the cost of
hours estimated in the contract.

               Most of the Company's commercial contracts are "firm fixed price"
or  "time  and  material"  agreements.  These  agreements  generally  call for a
specified  set of  requirements  to be  delivered at a  negotiated  price.  With
respect to fixed price  agreements,  if development costs yield a result that is
less than the  estimate  for the fixed  price,  the Company  will make a greater
profit on that contract.  If development  costs exceed the estimated  effort for
the fixed price, the Company will have less profit on that contract. These types
of contracts  are typically  broken down into a set of milestones  with payments
made at each milestone.  These are generally  called earned value milestones and
are used to benchmark  progress,  help the customer  track  status,  and provide
trigger points for payments.

               STI has several contracts with the NRL. Its largest contract with
NRL, which relates to space systems applications and operations,  was renewed in
May 1998. It provides for services to be performed over five years, with a total
estimated cost of $57,167,518 and a fixed fee of $4,370,901.  As of December 31,
1998,  STI had received  cost  payments and fees in the  aggregate of $7,930,077
under the contract. The contract with Lockheed relates to a GPS project with the
U.S. Air Force. It began in August 1995 and continues through September 30, 2000
unless modified by Lockheed. STI received $3,744,421 under this contract for the
Company's fiscal year ended December 31, 1998 with a funded backlog at that time
of approximately $1,173,248.

               STI has various contracts with Motorola,  some of which are fixed
price contracts and some of which are time and material  contracts.  Most of the
revenues from  Motorola in the past four years were received  under an agreement
executed  in  February  1994 under  which STI agreed to  provide  Motorola  with
satellite  and ground  control  software for the system  control  segment of the
IRIDIUM  communications  system.  STI  expects  to  receive  payments  under the
contract  for several  more years.  As of December  31,  1998,  STI had received
approximately  $44,206,259  from Motorola  under this and other  contracts.  The
backlog as of December 31, 1998 for Motorola  was  $277,500.  In addition to its
base  business  with  Motorola,  in  January  1998 the  Company  entered  into a
strategic  alliance  with  Motorola in the pursuit of space  programs.  Over the
eleven  months  ended  December  31,  1998,  the  Company  invested in excess of
$1,000,000 in support of this strategic alliance.

               STI also receives revenues from Allied Signal Technical  Services
Corporation   ("Allied")  under  various   purchase  orders.   It  has  received
approximately  $676,511  from Allied  during the fiscal year ended  December 31,
1998 and  approximately  $309,964 in backlog  remains  under  existing  purchase
orders.

               Based  on the  development  plans  and  schedule  to  incorporate
customer features and functionality,  there were no revenues generated by FTI in
the Company's  fiscal year ended December 31, 1998.  Exigent expects its FotoTag
products to begin  generating  revenues in the second quarter of the 1999 fiscal
year, given that its airline and airport passenger/baggage reconciliation system
is now fully operational.

Backlog

               Exigent  estimates that its backlog orders believed to be firm as
of December  31, 1998 and January  31, 1998 were  $14,040,033  and  $11,334,085,
respectively.  Approximately  $7,451,567 of the backlog in the Company's  fiscal
year  ended  December  31,  1998  relates  to the  unfunded  portion  of awarded
government   contracts.   There   is   additional   value  of   $45,336,441   in
not-yet-awarded  task orders on the  Company's  direct  contract  with the Naval
Research  Laboratory,  which are expected to be awarded and funded over the next
three to four fiscal years.

Competition

               The Company  experiences  significant  competition  in all of the
areas  in  which  it  does  business.  The  Company  believes  it is one of four
companies in the United  States which derive the major  portion of their revenue
from the  development of satellite  ground  systems.  The Company  competes with
numerous  companies  having similar  capabilities,  some of which are larger and
have  considerably  greater  financial  resources,   including  Lockheed  Martin
Corporation,  Loral Space & Communications Ltd., Boeing, Hughes, TRW, Honeywell,
L-3  Communications  Holdings,   Orbital  Sciences  Corporation,   AlliedSignal,
Computer  Sciences  Corporation,  Alcatel  Espace and Matra  Marconi  Space.  In
addition,  several smaller  companies have  specialized  capabilities in similar
areas. In general,  the markets in which the Company  competes are not dominated
by a single  company;  instead,  a large number of companies offer services that
overlap and are competitive  with those offered by the Company.  There can be no
assurance that the Company will be able to compete successfully.

Patents, Trademarks and Licenses

               The  Company  has filed  patent  applications,  some of which are
utilized in its  operations.  While such patent  applications  and any resulting
patents,  in  the  aggregate,  may  become  important  to the  operation  of the
Company's  business,  no existing patent  application is of such importance that
its loss or failure to result in one or more patent claims would, in the opinion
of management, materially affect the Company's business.

               The  Company  has  received  a  registration  in  Class 9 for the
Trademark  OS/COMET  (Registration  No.  2,165,377)  for  computer  software for
development of satellite communication systems, namely satellite integration and
testing, ground station support and real time telemetry processing and display.

Employees

               As of December 31, 1998, the Company had 303 employees.

Item 2.  Properties

               Exigent's  corporate   headquarters  are  located  in  Melbourne,
Florida on the "Space Coast" near NASA's Kennedy Space Center. In February 1998,
Exigent,  through STI, occupied a leased building of approximately 30,000 square
feet which houses the Exigent corporate  headquarters,  product  development and
FotoTag.  The lease is for a ten-year  period  expiring  February 28,  2007.  An
adjacent  29,000  square  foot  building  is also leased by STI under a ten-year
lease, which will expire on December 1, 2005, and it houses technical employees.

               Exigent has three additional  offices in the greater  Washington,
D.C.  area,  which  are  predominantly  staffed  with  technical  employees.  In
September  1998,  Exigent,  through STI,  renewed its  existing  lease of 15,296
square feet,  located in Alexandria,  Virginia,  under a five-year lease,  which
will expire on August 31, 2003. In December 1998, Exigent, through STI, occupied
an additional  leased building of approximately  11,188 square feet,  located in
Chantilly,  Virginia, under a five-year lease, which will expire on November 30,
2003. In La Plata, Maryland, the Company leases an office of approximately 1,935
square feet under a month-by-month lease.

               Exigent  also leases  approximately  2,494 square feet in Aurora,
Colorado under a three year lease expiring October 31, 1999,  approximately  797
square  feet in Aurora,  Colorado  under a three year lease  expiring  April 30,
2001,  approximately  1,946 square feet in Colorado  Springs,  Colorado  under a
three year lease expiring July 1, 2000, and  approximately  2,971 square feet in
Mesa,  Arizona  under a three year  lease  expiring  November  20,  1999.  These
buildings are predominantly staffed with technical employees.

               Management  believes that its occupancy needs will be met through
the Company's  next fiscal year.  Due to the nature of the  Company's  business,
there are no special  facility  requirements  to consider,  given that  software
development  can be  conducted in standard  office  space and its  manufacturing
requirements are minimal and most often handled through outsourcing.

Item 3.  Legal Proceedings

               There are no material pending legal  proceedings to which Exigent
or its  subsidiaries or their  properties are a party or were a party during the
fourth quarter of the Company's fiscal year ended December 31, 1998.

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

               No matters were submitted during the fourth quarter of the fiscal
year  covered  by  this  report  to a vote  of  security  holders,  through  the
solicitation of proxies or otherwise.

PART II

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

               Trading of  Exigent's  Common  Shares and Common  Stock  Purchase
Warrants  during the fiscal year ending  December 31, 1998 were  reported on the
NASDAQ  Electronic  Bulletin Board (the "Bulletin Board") under the symbols XGNT
and XGNTW, respectively through February 26, 1999. Exigent received approval for
initial  inclusion on the Nasdaq SmallCap  Market on February 22, 1999.  Trading
began on the Nasdaq SmallCap Market on March 1, 1999.  Exigent Common Shares and
Common Stock  Purchase  Warrants are also traded on the Chicago  Stock  Exchange
under the symbol XNT and XNTW,  respectively.  There is no  established  trading
market for the Company's Class A Preferred Shares.


<PAGE>

               The following  table  represents  the high and low bid prices for
the Company's Common Shares and Common Stock Purchase  Warrants for each quarter
of its fiscal year ended  December 31, 1998,  and each of the second,  third and
fourth  quarters of the fiscal year ended  January 31, 1998,  as reported in the
Daily Trade and Quote Summary provided by the Bulletin Board:

<TABLE>
<CAPTION>
                                                          Common Stock
                                    Common Shares       Purchase Warrants 
 Fiscal Year Ended 12/31/98              High        Low       High     Low

<S>                 <C>                 <C>         <C>      <C>      <C>   
                    4th Quarter         $4.13       $2.44    $1.125   $0.625
                    3rd Quarter         $4.38       $2.75    $1.875   $0.53125
                    2nd Quarter         $6.00       $3.81    $3.375   $1.375
                    1st Quarter         $4.00       $2.94    $1.5625  $0.6875

Fiscal  Year Ended 1/31/98

<S>                 <C>                 <C>         <C>      <C>      <C>   
                    4th Quarter         $4.25       $2.75    $1.50    $0.625
                    3rd Quarter         $4.13       $2.13    $1.00    $0.25
                    2nd Quarter         $2.25       $2.00    $0.25    $0.0625
</TABLE>


               The approximate  number of holders of Common Shares of Exigent as
of March 12, 1999 is 1,093 (based upon the number of record holders),  excluding
stockholders  whose Common Shares are held in nominee or street name by brokers.
The approximate number of holders of Exigent's Common Stock Purchase Warrants as
of March 12, 1999 is 1,219 (based upon the number of record holders),  excluding
holders whose Common Stock Purchase  Warrants are held in nominee or street name
by brokers.

               For the  Company's  fiscal  years  ended  December  31,  1998 and
January 31, 1998, the Board of Directors determined not to pay any dividends for
the  foreseeable  future,  but instead to use cash for product  development  and
operations.

<PAGE>

Item 6.  Selected Financial Data

<TABLE>
<CAPTION>
                                                         Eleven months
                                                              ended               Years Ended January 31

<S>                                                         <C>           <C>       <C>       <C>       <C> 
(Amounts in thousands except per share amounts)             12/31/98       1998      1997      1996      1995
                                                          ------------     ----      ----      ----      ----
Revenues                                                   $ 31,139     $ 35,749   $ 29,936   $ 25,292  $ 19,761
  Cost of Sales                                             (23,401)     (26,422)   (24,689)   (19,408)  (16,064)
                                                           ----------   --------   --------   --------- ---------
Gross Profit                                               $  7,738     $  9,327   $  5,247   $  5,884  $  3,697
  General and Administrative Expenses                        (6,823)      (7,050)    (5,344)    (3,841)   (2,539)
  Research and Development Costs                               (181)         (48)      (240)      (155)     (102)
                                                           ----------   --------   --------   --------- ---------
Operating Income (Loss)                                         734        2,229       (337)     1,888     1,056
  Total Other Income (Expense)                                 (136)         (53)         1        (1)        20
                                                           ----------   --------   ---------   -------  ---------
Income (Loss) before Taxes                                      598        2,176       (336)     1,887     1,076
  Income Tax Expense                                           (180)        (831)      (150)      (755)     (354)
                                                           ----------   --------   ---------   -------- ---------
Net Income (Loss)                                          $    418     $  1,345   $   (486)   $ 1,132  $    722
                                                           ----------   --------   ---------   -------- ---------
Income per Weighted Average Common Shares
  Outstanding - Diluted                                    $   0.08     $  0.29    $  (0.13)   $  0.29  $    0.19
Cash Dividends                                             $     --     $   --     $   (310)   $  (178) $     (89)
Cash Dividends Paid per Share Outstanding                  $     --     $   --     $   0.08    $  0.05  $    0.03
Total Assets                                               $ 15,664     $14,693    $ 10,949    $ 8,328  $   6,471
Total Long-Term Liabilities
  (Excluding Deferred Income Taxes)                        $    428     $   467    $    317    $    10  $      17
Total Stockholders' Equity                                 $  8,629     $ 7,781    $  6,258    $ 4,893  $   3,939
Stockholders' Equity per Weighted Average
  Common Share, Outstanding - Diluted                      $   1.67     $  1.67    $   1.72    $  1.27  $    0.88
Dividends Declared per Weighted Average
  Common Share, Outstanding - Diluted                      $    --      $  --      $   0.08    $  0.05  $    0.02
</TABLE>

<PAGE>

Item  7.  Management's  Discussion and Analysis of Financial  Condition and 
          Results of Operations

          The Company  has changed the last day of its fiscal year from  January
31 to  December  31.  Hence,  the  Company's  most  recent  fiscal  year  was an
eleven-month period ending on December 31, 1998.

Liquidity

          As of December 31, 1998 and January 31, 1998,  the Company's  ratio of
current  assets to  current  liabilities  was 1.7 and 1.9,  respectively.  As of
December 31, 1998, the Company's  quick  liquidity  ratio was 1.4, down from 1.8
for the year ended  January 31,  1998.  This  decrease is due to the decrease in
cash  due  to  significant   investment  in  software  development  and  product
enhancements  over the eleven months ended  December 31, 1998 along with a delay
in the planned product sales on several key government projects.

          The Company's cash  portfolio  (cash and cash  equivalents)  decreased
$3,210,538 for the eleven months ended December 31, 1998.  This decrease was due
to cash used in investing  activities of $4,900,806 and by operating  activities
of $204,878, offset by cash provided by financing activities of $1,895,146.  The
cash used in investing  activities  decreased  due to an  investment in software
development  of $3,905,349  and an investment in Company  facilities and capital
equipment of $1,002,041.  By comparison,  the Company's cash portfolio increased
$3,211,803  for the year ended  January 31, 1998.  This increase was due to cash
provided by operating  activities of  $5,239,810  and cash provided by financing
activities of $413,759  less cash in the amount of $2,441,766  used in investing
activities. The cash provided by operating activities increased primarily due to
an increase in cash received from  customers  through a significant  increase in
product sales.

          In the Company's  fiscal years ended December 31, 1998 and January 31,
1998 and 1997, Exigent invested $1,002,041, $1,306,693 and $1,382,163 in capital
assets,  respectively.  The  expenditure in the eleven months ended December 31,
1998 was due largely to the  completion of remodeling and furnishing the Company
facilities as well as the installation of a wide area network serving all of the
Company's principal facilities. The expenditure in the fiscal year ended January
31, 1998 was due  primarily  to an  investment  made in  computing  resources to
support the  demonstration  of the  Company's  products and  capabilities  in an
integrated  control center.  The expenditures in prior fiscal years were made to
support programs and for the modernization of office equipment. In the Company's
fiscal year ended  January 31,  1998,  the Company made a decision to lease most
new  equipment  for its  computing  needs.  Capital for  equipment  purchases is
expected to remain  stable for the next two fiscal  years as the Company has now
modernized,   and  has  acquired  computer   resources  for  expected  near-term
operations. The Company will continue its policy of leasing resources for office
computing needs.

          In the Company's  fiscal years ended December 31, 1998 and January 31,
1998  and  1997,  the  Company  spent   $3,905,349,   $1,149,685  and  $556,167,
respectively,  in capitalized software development costs to develop new products
considered  essential in  maintaining a strong market  position in the satellite
command and control  industry as well as the airport security  industry.  During
the fiscal year ended January 31, 1998, the Company  completed a thorough review
of the economic life of its  capitalized  software,  and concluded that a change
was  needed  in its  amortization  policy  to more  closely  match the time span
between major releases.  The amortization  life was therefore reduced from three
years to two years.

          Cash provided by financing  activities  for the Company's  fiscal year
ended  December  31,  1998 was  $1,895,146.  This was  comprised  of  $1,811,093
borrowed  against the line of credit to finance  operations,  $511,111  borrowed
through Huntington  National Bank to consolidate the outstanding term loans with
SunTrust,  offset by  $345,506  in  principal  payments  on  long-term  debt and
$511,111 paid to close out SunTrust term notes. In addition, $429,559 of capital
was raised through the exercise of stock options and warrants.  Cash provided by
financing  activities  for the Company's  fiscal year ended January 31, 1998 was
$413,759.

          In the Company's  fiscal years ended December 31, 1998 and January 31,
1998, the Board of Directors determined not to pay any dividends, but instead to
use cash for product  development  and  operations.  As a private  company,  the
Company paid dividends of $0.45 and $0.30 ($.075 and $.050,  giving  retroactive
effect of the Exchange)  per share in the  Company's  fiscal years ended January
31, 1997 and 1996,  respectively,  for total dividends of $309,549 and $177,955,
respectively.

          Principal  payments on long-term  debt amounted to $345,506,  $382,108
and $251,335 in the Company's  fiscal years ended  December 31, 1998 and January
31, 1998, and 1997, respectively.  At the close of the current fiscal year ended
December 31,  1998,  the Company  obtained a new line of credit with  Huntington
National  Bank to replace the existing  line with  SunTrust.  As of December 31,
1998 and January 31, 1998, Exigent had a line of credit with banks of $3,000,000
and $1,800,000 respectively.  Draws against the line as of December 31, 1998 and
January 31, 1998 were $1,811,093 and $0, respectively.  All accounts receivable,
equipment,  furniture,  and  fixtures of STI are pledged as  collateral  against
amounts borrowed under the line of credit.

          Management believes that capital in addition to that available through
operations  and the  available  line of  credit  will be  necessary  to fund the
Company's  plans for expansion and growth during the Company's  next fiscal year
and beyond. The Company may seek debt or equity financing. However, there can be
no assurance that such financing  will be available on acceptable  terms,  if at
all, or that adequate amounts of financing will be obtained.

Provision for Income Taxes

          The effective  rate for the Company's  fiscal year ended  December 31,
1998 was 30.1%,  down 8.1% from the effective  rate of 38.2% for the fiscal year
ended  January  31,  1998.  Note  14  to  Financial   Statements  describes  the
differences between the U.S. statutory and effective income tax rates.

Analysis of Operations

Overview

          The current contract base provides  sufficient backlog to maintain the
Company  through  the first  four to six  months of its next  fiscal  year.  The
backlog as of December 31, 1998 for  commercial  and  government  contracts  was
$288,339  and  $13,751,694,  respectively.  The  Company  invested  in excess of
$7,000,000  over the  last two  years in its  software  product  OS/COMET.  This
investment  facilitated the significant contract awards that management believes
would  otherwise have been difficult to obtain.  Commitment to maintain  support
for the product  will  continue  through the  Company's  next fiscal year and is
necessary to deliver the services under contract.

          The  Company  completed  development  of  a  new  commercial  software
product,  FotoTag,  during its fiscal year ended  January 31, 1998 with  several
significant  enhancements  completed  late in the fiscal year ended December 31,
1998.  Management  expects  revenue  from sales of this  product to begin in the
second quarter of fiscal year 1999.

          The  commercial  satellite  business is  projected  to  continue  with
growing sales  worldwide and is expected to show moderate  increases  throughout
the end of the decade, providing additional opportunities for the Company.

          Demand for  software  engineers  is expected  to provide new  customer
opportunities  for the Company,  but this demand  places a premium on efforts to
retain its current workforce. This situation puts additional pressure on overall
payroll costs, but this is an industry-wide phenomenon. Management believes that
the benefits  offered by the Company  remain above the level of its  competition
and  should  help to retain  its  workforce.  Overhead  costs for  benefits  are
increasing,  putting  pressure  on  the  Company's  indirect  rates.  Management
believes it is important that the Company maintain  superior  benefits while the
demand for software engineers remains high. To do so and hold total costs stable
has been a management  challenge  and will continue to be so in the near future.
Maintaining  the Company's  comprehensive  benefit plan will also facilitate its
ability to support its recruiting program.

Comparison  of Years Ended  December 31, 1998,  January 31, 1998 and January 31,
1997


<PAGE>

          Sales for the Company's  eleven-month  fiscal year ended  December 31,
1998 were $31,139,083, down 12.9% from sales of $35,748,719 for its twelve-month
fiscal year ended January 31, 1998. The sales were down 5.0% after adjusting for
the fact that the most recent fiscal year consisted of only eleven  months.  The
sales for the Company's  fiscal year ended  January 31, 1998  increased 19% from
sales of $29,935,691  for the Company's  fiscal year ended January 31, 1997. The
breakdown  between  government  and  commercial  sales for these  periods  is as
follows:

<TABLE>
<CAPTION>
                     Eleven months                          Year ended                           Year ended
                    ended 12/31/98                           1/31/98                               1/31/97

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

<S>                  <C>                     <C>           <C>                    <C>         <C>                    <C>
Government           $  24,698,289           79%           $ 23,113,510           65%         $  18,233,915          61%
Commercial               6,440,794           21%             12,635,209           35%            11,701,776          39%
                   -----------------      --------      ------------------     --------      ---------------       --------
                     $  31,139,083          100%           $ 35,748,719          100%         $  29,935,691         100%
                   =================      ========      ==================     =========     ================      =========
</TABLE>

          These sales reflect a 79% to 21% government to commercial split in the
Company's fiscal year ended December 31, 1998, compared to a 65% to 35% split in
the  Company's  fiscal year ended January 31, 1998 and a 61% to 39% split in the
Company's  fiscal  year ended  January 31,  1997.  Government  contract  revenue
increased  in the  Company's  fiscal  year ended  December  31,  1998 due to the
Company obtaining  additional work with the Naval Research  Laboratory and other
government  entities while a major contract in the commercial sector was winding
down.  The Company's  sales in its fiscal year ended January 31, 1998  increased
from its  sales in its  fiscal  year  ended  January  31,  1997 due  largely  to
obtaining  the  Lockheed  contract  as well as sales of  OS/Comet  under the GPS
contract.

          Gross profit as a percent of sales remained fairly consistent at 24.9%
($7,738,362) for the year ended December 31, 1998, versus 26.1% ($9,326,933) for
the year ended  January 31, 1998,  taking into account the short fiscal year and
the  corresponding  reduction in  commercial  revenue and product sales over the
eleven months.  Gross profit as a percent of sales for the Company's fiscal year
ended January 31, 1997 was 17.5% of sales ($5,246,847),  a significant reduction
when  compared to both the  Company's  fiscal year ended  December  31, 1998 and
January 31, 1998.


<PAGE>

          The  following  chart  shows  the  gross  profit   breakdown   between
government and commercial contracts for the periods indicated:

<TABLE>
<CAPTION>
                                                Eleven months ended           Year ended              Year ended
                                                     12/31/98                   1/31/98                 1/31/97
                                               -------------------------   ---------------------   ---------------------
         Government:

<S>                                           <C>                           <C>                     <C>             
             Revenue                          $           24,698,289        $     23,113,510        $     18,233,915
             Cost of Sales                              (18,513,003)            (17,842,830)            (14,674,760)
                                               -------------------------   ---------------------   ---------------------
             Gross Profit                     $            6,185,286        $       5,270,680       $       3,559,155
                                               =========================   =====================   =====================

             Gross profit as % of sales                        25.0%                   22.8%                   19.5%

                                                 Eleven months ended           Year ended              Year ended
                                                     12/31/98                   1/31/98                 1/31/97
                                               -------------------------   ---------------------   ---------------------
         Commercial:

             Revenue                          $            6,440,794        $     12,635,209        $     11,701,776
             Cost of Sales                               (4,887,718)             (8,578,956)            (10,014,084)
                                              --------------------------   ---------------------  ---------------------
             Gross Profit                     $            1,553,076        $     4,056,253         $     1,687,692
                                              =========================   =====================   =====================

         Gross profit as % of sales                            24.1%                   32.1%                   14.4%
</TABLE>


         General  and  administrative  expenses  for  the  eleven  months  ended
December  31,  1998 were  $6,823,198,  3.2% or $226,872  lower than  expenses of
$7,050,070  for the  fiscal  year ended  January  31,  1998.  When  taking  into
consideration the short year, expenses were 5.6% or $393,419 higher than for the
fiscal year ended  January 31,  1998.  This  increase  resulted  primarily  from
$250,000 in costs  associated  with a potential  acquisition  and an increase in
rent expense of $200,000.  General and administrative expenses for the Company's
fiscal year ended January 31, 1998 were  $7,050,070,  32% or  $1,705,859  higher
than its expenses of $5,344,211 for its fiscal year ended January 31, 1997. This
increase  resulted  primarily  from  $706,139  in  administrative   labor  costs
associated the addition of employees required to administer a public company and
to expand the business base of the Company, $290,151 in additional costs related
to marketing and recruiting and $425,000 in severance costs  associated with the
unplanned departure of several senior level employees.

         Net income  decreased  significantly to $418,160 (1.3% of sales) in the
Company's  fiscal year ended December 31, 1998 from  $1,345,429  (3.8% of sales)
for the fiscal year January 31, 1998.  Management attributes the decrease to the
decreased  revenue in its  commercial  business.  This decrease was due in large
part to the completion of a large fixed price development  contract  accompanied
with the slippage of several  major  commercial  opportunities  into fiscal year
1999.  The  decision to take a more  conservative  position on  amortization  of
capitalized  software in the Company's  fiscal year ended January 31, 1998 had a
significant  impact  on the  current  year  earnings.  The  net  income  for the
Company's  fiscal year ended December 31, 1998 was decreased as a result of this
action by approximately $175,000 or $0.02 per share. In addition, shortening the
fiscal year to eleven months had a minor impact of approximately  $40,000 on the
current year earnings.  Net income  increased  significantly  from a net loss of
$486,238 (1.6% of sales) in the fiscal year ended January 31, 1997 to $1,345,429
(3.8% of sales) in the Company's fiscal year ended January 31, 1998.  Management
attributes  this  increase  to the  increased  product  sales from 1.5% of total
revenue in the fiscal year ended  January  31, 1997 to 5.6% of total  revenue in
the fiscal year ended  January 31,  1998 and the nearly  $1,000,000  cost of the
public offering incurred during the twelve months ended January 31, 1997.

Year 2000 Issues

          Some  existing  computer  programs  will be unable to recognize  dates
properly in the Year 2000 ("Y2K") and beyond.  During 1997, Exigent conducted an
informal study of its products, systems and operations,  including systems under
development,  to  improve  business  functionality,  to  identify  those  of its
computer  hardware,  software and process  control  systems that do not properly
recognize  dates after  December  31,  1999,  and those that are linked to third
parties'  systems.  Based on this informal  study,  Exigent  recognized that the
OS/COMET  product  required  certain  modifications  to be Y2K compliant.  Those
modifications  have been made to the software  and are  available in the current
release,  Version 3.5.  Exigent has also initiated  communications  with certain
third parties whose computer systems'  functionality  could adversely impact the
Company. These communications will facilitate  coordination of any necessary Y2K
conversions  and will,  additionally,  permit Exigent to determine the extent to
which the Company may be  vulnerable  to the failure of third parties to address
their own Y2K issues.

          The costs of Exigent's  Y2K  compliance  efforts are being funded with
cash  flows  from  operations.   Some  of  these  costs  relate  solely  to  the
modification  of existing  systems,  while  others are for new systems that will
improve  business  functionality.  In total,  these costs are not expected to be
substantially  different from the normal,  recurring costs that are incurred for
systems  development  and  implementation,  in part due to the  reallocation  of
internal resources and the deferral of other projects.  As a result, these costs
are not expected to have a material adverse effect on Exigent's  overall results
of operations or cash flows.

          The  assessment of the costs of Exigent's Y2K compliance  effort,  and
the timetable for the Company's planned completion of its own Y2K modifications,
are  management's  best  estimates.  These  estimates  were based upon  numerous
assumptions  regarding future events,  including assumptions as to the continued
availability of certain resources, and, in particular,  personnel with expertise
in this  area,  and as to the  ability  of such  personnel  to locate and either
re-program or replace,  and test, all affected computer  hardware,  software and
process control systems in accordance with the Company's planned schedule. There
can be no guarantee that these estimates will prove accurate, and actual results
could differ from those estimated if these assumptions prove inaccurate.

          Based upon  progress to date,  however,  Exigent  believes  that it is
unlikely  that the  foregoing  factors  will  cause  actual  results  to  differ
significantly from those estimated.  As to the systems of the third parties that
are linked to  Exigent's,  there can be no guarantee  that those of such systems
that  are  not  now  Y2K-compliant  will  be  timely  converted  to  compliance.
Additionally,  there  can  be  no  guarantee  that  third  parties  of  business
importance to Exigent will  successfully  and timely  reprogram or replace,  and
test, all of their own computer hardware, software and process control systems.

Outlook

          This section captioned "Outlook" and other parts of this Annual Report
on Form 10-K include certain  forward-looking  statements  within the meaning of
the federal  securities  laws.  Actual  results and the  occurrence or timing of
certain  events  could  differ  materially  from those  projected in any of such
forward-looking statements due to a number of factors, including those set forth
below and elsewhere in this Form 10-K.  See "Other  Forward-Looking  Statements"
below.

          Diversification and Long Term Growth. The Company expects to diversify
its business by developing  additional COTS products for sale in both commercial
and government  markets.  The Company currently plans to seek  opportunities for
long term growth  through  acquisitions,  development of products for commercial
applications, and leveraging the Company's existing technologies and products.

          Product  Development.  The  Company is  developing  new  products  and
product offerings,  including the next generation OS/COMET,  the Active Tracking
Engine  ("ATE")  and the  OS/ICC.  The Company  plans to  investigate  other new
product  development  opportunities  as part of its effort to expand its product
offerings and market.

Other Forward-Looking Statements

          Statements  contained in this Form 10-K that are not historical  facts
are  forward-looking  statements made pursuant to the safe harbor  provisions of
the Private Securities Litigation Reform Act of 1995. In addition, words such as
"believes,"  "anticipates,"  "expects" and similar  expressions  are intended to
identify  forward-looking  statements.  Such forward-looking  statements involve
known and unknown  risks,  uncertainties,  and other factors which may cause the
actual results,  performance or achievements of the Company or events, or timing
of events, relating to the Company to differ materially from any future results,
performance  or  achievements  of the  Company or  events,  or timing of events,
relating to the Company expressed or implied by such forward-looking statements.
The Company  cannot assure that it will be able to anticipate or respond  timely
to changes which could  adversely  affect its  operating  results in one or more
fiscal  quarters.  Results  of  operations  in any  past  period  should  not be
considered indicative of results to be expected in future periods.  Fluctuations
in operating  results may result in  fluctuations  in the price of the Company's
common stock.

          The more  prominent  known  risks and  uncertainties  inherent  in the
Company's  business ar set forth below.  However,  this section does not discuss
all possible risks and uncertainties to which the Company is subject, nor can it
be assumed  that there are not other risks and  uncertainties  which may be more
significant to the Company.

          Such other factors include,  among others,  those described in Item 1.
"Business," and this Item 7. "Management's  Discussion and Analysis of Financial
Condition and Results of Operations " and the following:

o         continued  dependence on a small number of  significant  customers for
          substantially  all of the Company's  revenue and the potential loss of
          one or more of the Company's principal customers;

o         continued  dependence on government agencies for a significant portion
          of the Company's revenue;

o         the shortage of qualified  and  competent  software  engineers and the
          risk that the Company will be unable to retain its key  employees  and
          managers,  especially  in the  event  the  Company  loses  one or more
          contracts or principal customers;

o         dependence  on the  satellite  command  and control  industry  and the
          potential  failure to  diversify  the  Company's  product  and service
          offerings and to expand its markets for commercial applications;

o         possible  difficulties  in  raising  private  or  public  capital  for
          financing  working  capital needs and potential  acquisitions on terms
          favorable or acceptable to the Company;

o         the possible  inability of the Company to find or secure  acquisitions
          on terms favorable or acceptable to the Company in pursuit of its plan
          for growth and diversification;

o         continued availability of a commercial line of credit;

o         the expense of new product  development,  the potential failure by the
          Company to complete new products on a timely basis, and the failure of
          such products to achieve substantial market acceptance;

o         the  potential  loss of  customers  or  opportunities  because  of the
          Company's  relationship  as a  competitor  to  some  of its  principal
          customers;

o         the potential loss of other broadband satellite customer opportunities
          because of the Company's strategic alliance relationship with Motorola
          SatCom or on the IRIDIUM and Teledesic product; and

o         the potential  negative impact of salary increases on bid rates due to
          the amount of the Company's revenue related to services.

Item 7a.  Quantitative and Qualitative Disclosures about Market Risk

Not Applicable

Item 8.  Financial Statements and Supplementary Data



<PAGE>

                         Report of Independent Auditors

Board of Directors and Stockholders
Exigent International, Inc.

We  have  audited  the  accompanying   consolidated  balance  sheet  of  Exigent
International,  Inc. and  subsidiaries  as of December 31, 1998, and the related
consolidated statements of operations,  stockholders' equity, and cash flows for
the eleven months ended December 31, 1998.  These  financial  statements are the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these financial statements based on our audit.

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

In our opinion, the consolidated  financial statements referred to above present
fairly, in all material respects, the consolidated financial position of Exigent
International,  Inc. and subsidiaries at December 31, 1998, and the consolidated
results of their  operations  and their cash flows for the eleven  months  ended
December 31, 1998 in conformity with generally accepted accounting principles.


Ernst & Young LLP
Orlando, Florida
March 12, 1999

<PAGE>


                         Report of Independent Auditors

Board of Directors and Stockholders
Exigent International, Inc.

We  have  audited  the  accompanying   consolidated  balance  sheet  of  Exigent
International,  Inc. and  subsidiaries  as of January 31, 1998,  and the related
consolidated statements of operations,  stockholders' equity, and cash flows for
each of the  two  years  ended  January  31,  1998  and  1997.  These  financial
statements   are  the   responsibility   of  the   Company's   management.   Our
responsibility  is to express an opinion on these financial  statements based on
our audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all  material   respects,   the  consolidated   financial  position  of  Exigent
International,  Inc. and  subsidiaries at January 31, 1998, and the consolidated
results of their operations and their cash flows for each of the two years ended
January 31,  1998 and 1997 in  conformity  with  generally  accepted  accounting
principles.


Hoyman, Dobson & Company, P.A.
Melbourne, Florida
April 4, 1998


<PAGE>

                           EXIGENT INTERNATIONAL, INC.
                           CONSOLIDATED BALANCE SHEETS


                                     ASSETS



<TABLE>
<CAPTION>
                                                                        December 31,           January 31,
                                                                            1998                   1998
                                                                     --------------------    -------------------
CURRENT ASSETS
<S>                                                                              <C>                  <C>        
      Cash and cash equivalents                                           $ 429,970              $ 3,640,508
      Accounts receivable, pledged                                        1,873,772                2,747,383
      Costs and estimated earnings in excess of
          billings on uncompleted contracts, pledged                      5,072,788                3,823,768
      Prepaid expenses                                                       10,677                   64,288
      Income taxes receivable                                               843,938                        -
      Deferred income taxes                                                 595,000                  663,000
      Inventories                                                                 -                    5,288
                                                                     ---------------         ---------------
      TOTAL CURRENT ASSETS                                                8,826,145               10,944,235
                                                                     ---------------         ---------------

PROPERTY AND EQUIPMENT
      Cost                                                                6,265,709                5,304,630
      Accumulated depreciation                                           (3,982,347)              (3,135,923)
                                                                     ---------------         ---------------
      NET PROPERTY AND EQUIPMENT                                          2,283,362                2,168,707
                                                                     ---------------         ---------------

OTHER ASSETS
      Software development costs, net of accumulated amortization         4,463,729               1,508,887
      Deposits                                                               74,179                  43,466
      Cash surrender value of life insurance                                 17,028                  17,028
      Organizational costs                                                        -                  10,638
                                                                     ---------------         --------------
      TOTAL OTHER ASSETS                                                  4,554,936               1,580,019
                                                                     ---------------         --------------

      TOTAL ASSETS                                                     $ 15,664,443            $ 14,692,961
                                                                     ===============         ==============
</TABLE>


<PAGE>







         The accompanying notes are an integral part of this statement.



<PAGE>



                           EXIGENT INTERNATIONAL, INC.
                     CONSOLIDATED BALANCE SHEETS (CONTINUED)

                      LIABILITIES AND STOCKHOLDERS' EQUITY


<TABLE>
<CAPTION>
                                                                        December 31,           January 31,
                                                                            1998                   1998
                                                                     --------------------  ---------------------
CURRENT LIABILITIES
<S>                                                                          <C>           <C>
      Line of credit                                                    $ 1,811,093          $         -
      Accounts payable                                                      227,750              392,799
      Accrued expenses                                                    2,734,200            3,401,311
      Billings in excess of costs and estimated earnings
          on uncompleted contracts                                          270,418            1,252,700
      Income taxes payable                                                    5,098              242,524
      Current portion, long-term debt                                       204,456              511,111
                                                                     ---------------         ------------
      TOTAL CURRENT LIABILITIES                                           5,253,015            5,800,445
                                                                     ---------------         ------------

LONG-TERM LIABILITIES
      Long-term debt, less current portion                                  427,816              466,667
      Deferred income taxes                                               1,355,000              645,000
      Other liabilities                                                          44                    -
                                                                     ---------------         ------------
      TOTAL LONG-TERM LIABILITIES                                         1,782,860            1,111,667
                                                                     ---------------         ------------

      TOTAL LIABILITIES                                                   7,035,875            6,912,112
                                                                     ---------------         ------------

COMMITMENTS AND CONTINGENCIES                                                     -                    -

STOCKHOLDERS' EQUITY
      Class A Preferred Shares, $.01 par value, 5,000,000
        shares authorized, 609,882  and 688,792 issued and
        outstanding at December 31, 1998 and January 31, 1998,
        respectively, at $2.50 per share liquidation/dissolution
        preference                                                            6,099                 6,888
      Common Shares,  $.01 par value, 40,000,000 shares
        authorized, 4,130,103 and 3,872,655 issued and
        outstanding at December 31, 1998 and January 31, 1998,
        respectively                                                         41,301                38,726
      Class B common stock, $.01 par value; 600,000 shares
        authorized, no shares issued of outstanding                               -                     -
      Paid in capital                                                     2,012,780             1,585,007
      Retained earnings                                                   6,568,388             6,150,228
                                                                     --------------          ------------
      TOTAL STOCKHOLDERS' EQUITY                                          8,628,568             7,780,849
                                                                     --------------          ------------
      TOTAL LIABILITIES & STOCKHOLDERS' EQUITY                         $ 15,664,443          $ 14,692,961
                                                                     ==============          ============
</TABLE>
<PAGE>









         The accompanying notes are an integral part of this statement.


<PAGE>

                           EXIGENT INTERNATIONAL, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS



<TABLE>
<CAPTION>
                                                         For the eleven months  For the year ended    For the year ended
                                                         ended December 31,        January 31,           January 31,
                                                                1998                   1998                  1997
                                                         --------------------  ---------------------  -------------------

<S>                                                             <C>                    <C>                  <C>         
REVENUES                                                        $ 31,139,083           $ 35,748,719         $ 29,935,691
COST OF SALES                                                     23,400,721             26,421,786           24,688,844
                                                         --------------------  ---------------------  -------------------
GROSS PROFIT                                                       7,738,362              9,326,933            5,246,847

GENERAL AND ADMINISTRATIVE EXPENSES                                6,823,198              7,050,070            5,344,211
RESEARCH AND DEVELOPMENT COSTS                                       180,671                 47,854              239,986
                                                         --------------------  ---------------------  -------------------
OPERATING INCOME (LOSS)                                              734,493              2,229,009             (337,350)
                                                         --------------------  ---------------------  -------------------

OTHER INCOME (EXPENSE)
      Interest income                                                 42,786                 36,887               55,939
      Interest expense                                              (172,035)               (91,276)             (55,119)
      Gain (loss) on disposal of fixed assets                          3,292                 (4,655)                   -
      Other, net                                                     (10,376)                 6,229                    -
                                                         --------------------  ---------------------  -------------------
TOTAL OTHER INCOME (EXPENSE)                                        (136,333)               (52,815)                 820
                                                         --------------------  ---------------------  -------------------
INCOME (LOSS) BEFORE INCOME TAXES                                    598,160              2,176,194             (336,530)

INCOME TAX EXPENSE                                                   180,000                830,765              149,708
                                                         --------------------  ---------------------  -------------------

NET INCOME (LOSS)                                                  $ 418,160            $ 1,345,429           $ (486,238)
                                                         ====================  =====================  ===================

EARNINGS (LOSS) PER SHARE - BASIC                                     $ 0.10                 $ 0.36              $ (0.13)
                                                         ====================  =====================  ===================

WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC                        4,034,039              3,787,639            3,642,514
                                                         ====================  =====================  ===================
                                                         ====================  =====================  ===================

EARNINGS (LOSS) PER SHARE - DILUTED                                   $ 0.08                 $ 0.29              $ (0.13)
                                                         ====================  =====================  ===================

WEIGHTED AVERAGE SHARES OUTSTANDING - DILUTED                      5,157,531              4,647,290            3,642,514
                                                         ====================  =====================  ===================
</TABLE>


<PAGE>









         The accompanying notes are an integral part of this statement.




<PAGE>

                           EXIGENT INTERNATIONAL, INC.
                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY


<TABLE>
<CAPTION>
                                            Common Stock      Class A Preferred   Paid in    Retained    Treasury
                                          Shares     Amount    Shares   Amount    Capital    Earnings      Stock       Total
                                        ----------------------------------------------------------------------------------------

<S>                                         <C>       <C>           <C>      <C>    <C>       <C>          <C>       <C>        
BALANCE FEBRUARY 1, 1996                   768,400   $ 7,684         -      $ -    $ 29,030  $5,600,586   $(744,763)$ 4,892,537

Issued 46,986 shares of treasury 
   stock to fund accrued bonuses,
   cost $4.25.  Market value of 
    Company's common stock $14.03.             -          -          -        -     459,523        -        199,690     659,213
Issued 38,600 shares of treasury
   stock to fund accrued ESOP 
   contributions, cost $4.25.
   Market value of Company's common
   stock $14.03.                               -          -          -        -     377,508                 164,050     541,558
Issued 18,552 shares of treasury
   stock for bonuses and management
   incentives, cost $4.25.  Market 
   value of Company's common stock $14.03.     -          -          -        -     181,439                  78,846     260,285
Cash dividend of $0.45 per common share
   ($0.075 giving retroactive effect of
   stock exchange.)                            -          -          -        -    (309,549)                     -     (309,549)
Issued warrants for services                   -          -                   -      17,497         -            -       17,497
Retired 71,080 shares of treasury stock    (71,080)    (711)         -        -    (301,466)        -       302,177          -
Five for one exchange of stock           2,789,280   27,893          -        -     (27,893)        -                        -
Issued one share of class A preferred
   stock for every five shares of common
   stock for total issuance of 697,320
   shares of class A preferred stock          -     697,320       6,973   (6,973)      -            -         -              -
Issued 300,000 shares of stock for
   services and cash                       300,000    3,000                   -     675,000         -         -          678,000
Issued warrants for cash                      -          -                    -       4,250         -         -            4,250
Net loss                                      -          -          -         -    (486,238)                  -         (486,238)
                                    -----------------------------------------------------------------------------------------------

BALANCE JANUARY 31, 1997                 3,786,600   37,866     697,320    6,973  1,407,915   4,804,799        -       6,257,553
 Exercise of convertible securities         77,652      776         -    177,092       -           -           -         177,868
 Shares retired                               (125)      (1)                  -        -           -           -              (1)
 Class A preferred converted to common       8,528       85      (8,528)     (85)      -           -           -               -

 Net income                                    -          -         -         -        -      1,345,429        -       1,345,429
                                    -----------------------------------------------------------------------------------------------

BALANCE JANUARY 31, 1998                 3,872,655    38,726    688,792    6,888  1,585,007   6,150,228        -       7,780,849

     Exercise of convertible securities    178,788     1,788         -        -     427,771        -           -         429,559
     Class A preferred converted to common  78,910       789   (78,910)    (789)          -        -           -           -
     Cancelled shares                         (250)       (2)        -        -           2        -           -           -

     Net income                                  -         -         -        -           -     418,160        -         418,160
                                        ----------------------------------------------------------------------------------------
BALANCE DECEMBER 31, 1998                4,130,103   $41,301   609,882   $6,099  $2,012,780  $6,568,388        -     $ 8,628,568
                                        ========================================================================================
</TABLE>


<PAGE>









         The accompanying notes are an integral part of this statement.


<PAGE>

                           EXIGENT INTERNATIONAL, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS



<TABLE>
<CAPTION>
                                                         For the eleven months  For the year ended    For the year ended
                                                         ended December 31,        January 31,           January 31,
                                                                1998                   1998                  1997
                                                         --------------------  ---------------------  -------------------

<S>                                                     <C>                     <C>                   <C>    
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)                                        $            418,160  $          1,345,429   $         (486,238)
                                                         --------------------  ---------------------  -------------------
Adjustments to reconcile net income (loss) to net cash
  provided (used) by operating activities:
     Depreciation and amortization                                  1,845,239             1,271,878              855,252
     Public offering costs                                                  -                     -              692,495
     (Gain) loss on disposal of fixed assets                           (3,292)                4,655                    -
     Deferred income taxes                                            788,000                69,000              134,000
     Changes in operating assets and liabilities:
        Accounts receivable                                           873,611               162,363           (1,458,502)
        Costs and estimated earnings in excess of
         billings on uncompleted contracts                         (1,249,020)               13,060              861,295
        Prepaid expenses                                               53,611                (3,860)              62,378
        Inventory                                                       5,288                (5,288)                  -
        Income taxes receivable                                      (843,938)              796,143             (796,143)
        Deposits                                                      (30,713)               (2,855)              (5,808)
        Cash surrender value of life insurance                              -                 3,241                  898
        Accounts payable                                             (165,049)             (707,324)             878,104
        Accrued expenses                                             (667,111)            1,222,111            1,026,052
        Billings in excess of costs and estimated earnings
         on uncompleted contracts                                    (982,282)              834,274              220,087
        Income taxes payable                                         (237,426)              242,524             (304,000)
        Other liabilities                                                  44                (5,541)                 113
                                                         --------------------  ---------------------  -------------------
Total adjustments                                                    (623,038)            3,894,381            2,166,221
                                                         --------------------  ---------------------  -------------------
NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES:                    (204,878)            5,239,810            1,679,983
                                                         --------------------  ---------------------  -------------------

CASH FLOWS FROM INVESTING ACTIVITIES:
      Cash paid for acquisition of capital assets                  (1,002,041)           (1,306,693)          (1,382,163)
      Cash proceeds from the sale of capital assets                     6,584                14,612                    -
      Cash paid for capitalized software development               (3,905,349)           (1,149,685)             (556,167)
      Cash paid for organizational costs                                   -                      -               (11,938)
                                                         --------------------  ---------------------  -------------------
NET CASH USED BY INVESTING ACTIVITIES                              (4,900,806)           (2,441,766)          (1,949,728)
                                                         --------------------  ---------------------  -------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
     Net borrowings (payments) under line of credit                 1,811,093              (182,000)             182,000
     Proceeds from issuance of long-term debt                         511,111               800,000              800,000
     Principal payments on long-term debt                            (856,617)             (382,108)            (251,335)
     Proceeds from exercise of stock options and warrants             429,559               177,867                7,250
     Dividends paid                                                        -                     -              (309,549)
                                                         --------------------  ---------------------  -------------------
NET CASH PROVIDED BY FINANCING ACTIVITIES                           1,895,146               413,759              428,366
                                                         --------------------  ---------------------  -------------------
NET CASH INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS          (3,210,538)            3,211,803              158,621

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                      3,640,508               428,705              270,084
                                                         --------------------  --------------------   -------------------
CASH AND CASH EQUIVALENTS, END OF PERIOD                  $           429,970  $          3,640,508   $          428,705
                                                         ====================  =====================  ===================
</TABLE>

<PAGE>









         The accompanying notes are an integral part of this statement.




<PAGE>

                           EXIGENT INTERNATIONAL, INC.
                CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
          FOR THE ELEVEN MONTHS ENDED DECEMBER 31, 1998 AND YEARS ENDED
                            JANUARY 31, 1998 AND 1997


SUPPLEMENTAL CASH FLOW DISCLOSURES

NONCASH  ACTIVITIES - During the year ended January 31, 1997, the Company issued
46,986 shares of treasury  stock with a cost of $4.25 per share  ($199,690)  for
accrued  bonuses and 38,600  shares of  treasury  stock with a cost of $4.25 per
share ($164,050) for accrued ESOP payable.  The difference  between the cost and
market value of the treasury stock issued  ($837,031) was recorded as additional
paid in capital when the shares were issued.

During the year ended  January 31, 1997,  the Company  issued  18,552  shares of
treasury  stock  with a cost of $4.25  per  share,  or  $78,846,  for  bonus and
management  incentive  awards.  The Company's  stock was valued at $14.03 on the
date of the  issuance;  therefore,  the  difference  between  cost and market of
$181,439 was recorded as additional paid in capital.

On January 30, 1997, the following noncash transactions occurred:

The  Company  stockholders   exchanged  100%  of  Software  Technology,   Inc.'s
outstanding  common stock,  697,320  shares,  for 3,486,600  shares of Exigent's
common  stock and 697,320  shares of  Exigent's  Class A  preferred  stock which
reduced paid in capital by $34,866.

The Company  retired  71,080  shares of treasury  stock with a cost of $4.25 per
share ($302,177). The remaining balance of $301,466, representing the difference
between the par value and cost of the treasury  stock issued,  was recorded as a
reduction of paid in capital.

The  Company  issued  300,000  shares of  Exigent  common  stock to  Monogenesis
Corporation in exchange for cash and services  performed related to the business
combination  (See  Note 1).  The  shares  had been  valued  at $2.25  per  share
($675,000)  by  independent  appraisal  for  purposes of  administration  of the
Company's employee stock ownership plan. The Company received $3,000 in cash and
expensed  services,  which were  incurred  at a cost of  $675,000.  The  Company
reported an increase in the par value of its stock of $3,000 and additional paid
in capital of $675,000 as a result of the transaction.

INTEREST  AND INCOME TAXES PAID - During the eleven  months  ended  December 31,
1998 and the years ended January 31, 1998 and 1997,  the Company made income tax
payments of $463,450, $6,230 and $1,115,851, respectively.

Interest paid for the eleven months ended  December 31, 1998 and the years ended
January 31, 1998 and 1997 was $172,035, $91,276 and $55,119, respectively.



         The accompanying notes are an integral part of this statement.



<PAGE>


                           EXIGENT INTERNATIONAL, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
          FOR THE ELEVEN MONTHS ENDED DECEMBER 31, 1998 AND YEARS ENDED
                            JANUARY 31, 1998 AND 1997


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BUSINESS - Exigent  International,  Inc.  (Exigent or the  Company),  a Delaware
corporation,  was formed on March 25, 1996 as a holding company.  On January 30,
1997,  it acquired all of the  outstanding  stock of Software  Technology,  Inc.
(STI) in exchange for stock of Exigent, the "Exchange". STI, therefore, became a
wholly  owned  subsidiary  of  Exigent  and was the  consolidated  group's  (the
"Company") only business operation at January 30, 1997. In March 1997,  FotoTag,
Inc. (FotoTag) was formed as a wholly owned subsidiary of Exigent. Exigent, from
the date of formation  through January 30, 1997, had no material  activity other
than arranging the Exchange.

STI,  formed in 1978 in  Florida,  provides  systems  and  software  engineering
services and commercial off the shelf products for real-time  command,  control,
and data acquisition systems for government and industry throughout the U.S. STI
also  produces   OS/COMET  -  a  commercially   available  command  and  control
development and support system.

FotoTag Inc., a Delaware corporation,  was created as a subsidiary of Exigent in
1997 to provide the structure for  concentration  on tracking and control system
solutions for international high technology applications. The subsidiary's first
product,  also  called  FotoTag(R),  is used for  tracking  airport  and airline
passengers and their checked bags.

Middleware Solutions,  Inc. ("MWare"), a Nevada corporation,  was formed in 1998
to develop inexpensive,  high-performance  Message-Oriented  Middleware products
and distribute  them directly to the end-user over the Internet.  MWare products
are  characterized  as  "shrink-wrapped",  meaning  that they  offer a  complete
solution  to a given  problem.  The first  product  to be  released  by MWare is
Interplay.

POOLING OF INTERESTS - On January 30, 1997,  Exigent  acquired STI in a business
combination  accounted for as a pooling of interests.  STI became a wholly owned
subsidiary of the Company through the exchange of 3,486,600  shares of Exigent's
common stock and 697,320 shares of Exigent's  Class A preferred stock for all of
the outstanding stock and warrants of STI. The accompanying financial statements
for the year ended  January  31,  1997 have been  prepared on the basis that the
companies were combined for the full year.

CONSOLIDATION  POLICY  -  The  accompanying  consolidated  financial  statements
include  the  accounts  of  the  Company  and  its  wholly  owned  subsidiaries.
Intercompany transactions and balances have been eliminated in consolidation.

FISCAL  YEAR - The  financial  statements  for 1998 and 1997  include the twelve
months of operations ended January 31, 1998 and 1997, respectively.  During 1998
the  Company  changed  its  fiscal  year end from  January  31 to  December  31.
Accordingly,  the financial  statements  for the period ended  December 31, 1998
("fiscal 1998B") include only eleven months of operations.

Comparative unaudited results of operations for the eleven months ended December
31, 1997 are as follows:

Total Revenue                                $32,766,371

Cost sales                                    25,229,859
G&A expenses                                   5,616,910
R&D expenses                                      16,767
                                      -------------------
Operating Income                               1,902,835

Interest income                                   31,845
Interest expense                                 (83,503)
Other income                                       2,026
                                      -------------------

Net income before taxes                        1,853,203
Income tax expense                               739,400
                                      -------------------

Net income                                   $ 1,113,803
                                      ===================

<PAGE>

                           EXIGENT INTERNATIONAL, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
          FOR THE ELEVEN MONTHS ENDED DECEMBER 31, 1998 AND YEARS ENDED
                            JANUARY 31, 1998 AND 1997



NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

REVENUE   AND  COST   RECOGNITION   -  The   Company   recognizes   revenues  on
time-and-material  and  cost-plus-fixed-fee  contracts  as time is expended  and
costs are  incurred.  The fee on cost-plus  fixed fee  contracts  is  recognized
ratably  over total costs as they are  incurred.  Revenues  and costs from fixed
price contracts are recognized on the percentage-of- completion method, measured
by the percentage of total costs incurred to date to total  estimated  costs for
each contract.  This method is used because management  considers total expended
costs to be the best available measure of progress on these contracts.

Contract  costs include all direct  material and labor costs and those  indirect
costs related to contract performance such as indirect labor, supplies, repairs,
and depreciation costs.

Certain  general  and  administrative   expenses  (including  bid  and  proposal
expenses) allowable in accordance with U.S. Government procurement practices are
included in contract costs because they are identifiable with contract revenue.

Adjustments to cost estimates are made  periodically,  and losses expected to be
incurred on contracts in progress are charged to  operations  in the period such
losses are determined.  The aggregate of costs incurred and income recognized on
uncompleted contracts in excess of related billings is shown as a current asset,
and the  aggregate  of billings on  uncompleted  contracts  in excess of related
costs incurred and income recognized is shown as a current liability.

The  Company  sells  a  number  of  software  products.  Generally,  revenue  is
recognized  upon  shipment  of the  software.  After  the sale,  if  significant
obligations remain or significant  uncertainties exist about customer acceptance
of the software,  revenue is deferred until the obligations are satisfied or the
uncertainties are resolved.  When  collectibility of the receivable is in doubt,
revenue is recognized  under the  installment  method or cost  recovery  method.
Revenue from  software  services is  recognized  as the  services are  provided.
Revenue from  software  maintenance  contracts is  recognized on a straight line
basis over the life of the contract.

CASH EQUIVALENTS - For purposes of the statement of cash flows, cash equivalents
include  time  deposits,  certificates  of deposit,  and all highly  liquid debt
instruments with original maturities of three months or less.

CONTRACT  AND OTHER  RECEIVABLES  - The  Company  considers  contract  and other
receivables  to be fully  collectible;  accordingly,  no allowance  for doubtful
accounts is required.

DEPRECIATION - The cost of property, plant and equipment is depreciated over the
estimated  useful lives of the related  assets.  Depreciation is computed on the
straight-line  method;   accelerated  cost  recovery  system  and  the  modified
accelerated cost recovery system as appropriate.

AMORTIZATION - The costs of capitalized  software development are amortized over
their  estimated  useful  lives of two years.  Amortization  is  computed on the
straight-line  method. The Company periodically reviews the capitalized software
development cost to ensure that future anticipated gross revenues related to the
products exceeds the unamortized cost.






<PAGE>



                           EXIGENT INTERNATIONAL, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
          FOR THE ELEVEN MONTHS ENDED DECEMBER 31, 1998 AND YEARS ENDED
                            JANUARY 31, 1998 AND 1997

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

SOFTWARE DEVELOPMENT COSTS - In accordance with SFAS No. 86, "Accounting for the
Costs of  Computer  Software  to be Sold,  Leased or  Otherwise  Marketed,"  the
Company  capitalizes the direct costs and allocated indirect expenses associated
with the  development  of  software  products.  Initial  costs  are  charged  to
operations as research prior to the development of a detailed  program design or
a working  model.  Costs  incurred  subsequent  to the  product's  release,  and
research and development  performed as contractual  requirements  are charged to
operations.

EARNINGS  (LOSS) PER SHARE - Earnings (loss) per share is computed and presented
in accordance with SFAS No. 128, "Earnings per Share".

NEW ACCOUNTING PRONOUNCEMENTS - The Company reviewed the application of SFAS No.
130,  "Reporting  Comprehensive  Income",  and SFAS No. 131,  "Disclosures about
Segments of an Enterprise  and Related  Information",  and has  determined  that
neither  pronouncement is material to the Company's reported results or footnote
disclosures.  The Company does not have any material transactions to be reported
under SFAS No. 130 and  substantially  all of its operations are in one business
segment,  the  manufacture  and sale of software  products  and  services,  with
respect to the segment disclosure requirements of SFAS No. 131.

DISCLOSURE  ABOUT FAIR VALUE OF  FINANCIAL  INSTRUMENTS  - The  carrying  amount
reported  in  the  balance  sheets  for  cash  and  cash  equivalents,  accounts
receivable,  accounts  payable  and  accrued  expenses  approximates  fair value
because of the immediate or short-term  maturity of these instruments.  The fair
value of indebtedness  approximates  its carrying value and was determined using
market interest rates for debt with similar maturities.

RECLASSIFICATION  - Certain  reclassifications  have been made to reflect  prior
year amounts to current year presentation.

CONCENTRATIONS OF CREDIT RISK - Financial  instruments that potentially  subject
the Company to concentrations of credit risk consist primarily of temporary cash
investments.  The Company places its temporary cash investments with a financial
institution. The amount of credit exposure in excess of federally insured limits
at  December  31,  1998 and  January  31,  1998  was  $766,000  and  $3,694,629,
respectively.

Most of the Company's  revenues are derived primarily from products and services
related to satellite  command and control.  Should the demand for such  services
take a substantial  downturn and the number of satellites deployed is materially
reduced, the Company's business opportunities would be limited significantly.

USE OF ESTIMATES - The  preparation of financial  statements in conformity  with
generally accepted  accounting  principles requires management to make estimates
and assumptions  that affect certain  reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expenses during the reporting
period. Actual results could differ from those estimates.

The   Company    recognizes    revenue   on   certain    contracts   using   the
percentage-of-completion  method,  which is based upon total estimated costs for
each contract.  The estimate is subject to change as the work progresses on each
contract.

STOCK BASED  COMPENSATION  - The Company  follows APB 25  "Accounting  for Stock
Issued to Employees",  and related  interpretations  in accounting for its stock
based  compensation  rather than the alternative fair value accounting  provided
under SFAS No. 123, "Accounting for Stock-Based Compensation".

IMPAIRMENT  OF  LONG-LIVED  ASSETS - In the event that  facts and  circumstances
indicate  that the cost of assets may be  impaired,  an  evaluation  of recovery
would  be  performed.  If  an  evaluation  is  required,  the  estimated  future
undiscounted  cash flows  associated  with the asset  would be  compared  to the
asset's  carrying  amount  to  determine  if a write  down to  market  value  or
discounted cash flow value is required.

<PAGE>

                           EXIGENT INTERNATIONAL, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
          FOR THE ELEVEN MONTHS ENDED DECEMBER 31, 1998 AND YEARS ENDED
                            JANUARY 31, 1998 AND 1997



NOTE 2 - ACCOUNTS RECEIVABLE

The following is a summary of accounts receivable:

<TABLE>
<CAPTION>
                                         December 31,            January 31,
                                             1998                   1998
                                       -----------------      -----------------

<S>                                    <C>                      <C>             
Contract receivables                   $       1,784,205        $      2,482,463

Retainage receivable                              80,404                 229,954
Other receivables                                  9,163                  34,966
                                       ------------------       ----------------

Total accounts receivable              $       1,873,772        $      2,747,383
                                       =================        ================
</TABLE>

The  retainage  receivable  balance  represents  contracts,  which  provide  for
retainage provisions against billable amounts and are due upon completion of the
contracts and acceptance by the customer.

The Company expects to collect all receivables within the next fiscal year.


NOTE 3 - PROPERTY AND EQUIPMENT

The following is a summary of property and equipment:

<TABLE>
<CAPTION>
                                 December 31, January 31,              Estimated
                                -------------------------
                                  1998          1998                     Life
                                ---------      ----------            -----------

<S>                           <C>             <C>                     <C>
Furniture and equipment       $   879,960     $  585,663              3-8 years

Vehicles                           15,703         15,703                5 years
Computer equipment              4,823,732      4,607,879              3-5 years
Leasehold improvements            416,395         95,385               10 years
Capital leases                    129,919              -                5 years
                               -----------   -------------

  Total cost                    6,265,709     5,304,630

  Less accumulated
   depreciation                (3,982,347)   (3,135,923)
                              ------------  -------------

  Net property and equipment  $ 2,283,362   $ 2,168,707
                              ============= =============
</TABLE>
<PAGE>


Depreciation  expense  charged to general  and  administrative  expense  for the
eleven months ended  December 31, 1998, and the years ended January 31, 1998 and
1997 was $636,395,  $394,116, and $131,535,  respectively.  Depreciation expense
charged to applied  overhead for the eleven months ended  December 31, 1998, and
the years ended January 31, 1998 and 1997 was $196,558,  $359,528, and $306,916,
respectively.  Depreciation  expense charged directly to cost of sales in 1998B,
1998 and 1997 was $51,141, $213,077, and $308,044, respectively.

NOTE 4 - LINE OF CREDIT

On December 31, 1998, STI closed on a new $3,000,000  line of credit with a bank
replacing a $1,800,000  line. As of December 31, 1998 and January 31, 1998,  the
outstanding  draws against the lines were $1,811,093 and $0,  respectively.  The
outstanding  balances  accrue  interest at LIBOR plus 2.5% The interest  rate at
December  31, 1998 and January 31, 1998 was 7.56% and 8.25%,  respectively.  The
line of credit requires that the Company  maintain various  financial  covenants
including   leverage,   working   capital,   current  ratio  and  debt  coverage
requirements.  Advances  under the line of credit are based on a borrowing  base
computation. All accounts receivable,  equipment,  furniture and fixtures of STI
are pledged as collateral on the line of credit.

The weighted average interest rate on short-term  borrowings  during the periods
ended  December  31, 1998 and  January  31, 1998 and 1997 were 7.56%,  8.25% and
8.50%, respectively.

NOTE 5 - ACCRUED EXPENSES

Accrued expenses consist of the following:

<TABLE>
<CAPTION>
                                             December 31,           January 31,
                                               1998                    1998
                                            ----------            -------------

<S>                                           <C>                   <C>       
Accrued payroll taxes                      $     526,920            $  680,456

Accrued fringe benefits                        1,626,370             1,338,515
Accrued pension and profit sharing               270,910               343,064
Accrued ESOP payment                             101,735               137,225
Accrued severance pay                            103,428               265,000
Accrued 401K payable                              98,481               220,351
Other accrued expenses                             6,356               266,700
Accrued bonuses                                        -               150,000
                                          ---------------           ------------
Total accrued expenses                    $    2,734,200            $3,401,311
                                          ===============           ============
</TABLE>
<PAGE>

                           EXIGENT INTERNATIONAL, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
          FOR THE ELEVEN MONTHS ENDED DECEMBER 31, 1998 AND YEARS ENDED
                            JANUARY 31, 1998 AND 1997


NOTE 6 - LONG TERM DEBT AND CAPITAL LEASE OBLIGATIONS

Long term debt outstanding consists of the following:

<TABLE>
<CAPTION>
                                                                                   December 31,              January 31,
                                                                                       1998                    1998
                                                                                ------------------      -------------------

<S>       
Capital lease for furniture and fixtures payable to lessor in monthly                 <C>                     <C>
installments of $2,681 through August 1, 2003.                                        $121,161                  -

Note  payable to bank in monthly  installments  of $17,038  through June 5, 2001
including interest at either the bank's prime rate or
LIBOR plus 2.5%. The note is collateralized by all accounts 511,111  receivable,
equipment, furniture and fixtures of STI.

Note payable to bank in monthly installments of $22,222, through                                                 -
August 15, 2000 including interest at the bank's prime rate plus
 .375%.  The note was paid in full in 1998.

Note payable to bank in monthly  installments of $22,222,  through  February 28,
1999 including interest at the bank's prime rate plus
 .375%.  The note was paid in full in 1998.                                            -


                                                                                                               688,889





                                                                                      -


                                                                                                               288,889

     TOTAL LONG-TERM DEBT                                                             632,272                  977,778
                                                                                 -----------------       ------------------
     Less: current portion of long-term  debt                                        (204,456)                 (511,111)

     TOTAL LONG-TERM DEBT, less current portion                                   $   427,816               $   466,667
                                                                                 =================        =================
</TABLE>

Future maturities of long-term debt as of December 31, 1998 are as follows:

                                Amount
                            --------------

1999                        $ 204,456
2000                          204,456
2001                          180,088
2002                           25,963
2003                           17,309
                            $ 632,272
                            ==============

<PAGE>

                           EXIGENT INTERNATIONAL, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
          FOR THE ELEVEN MONTHS ENDED DECEMBER 31, 1998 AND YEARS ENDED
                            JANUARY 31, 1998 AND 1997


NOTE 7 - CLASS A PREFERRED STOCK

Each share of Class A preferred  stock is convertible to a share of common stock
at the option of the holder.  Each share of Class A preferred stock participates
equally with each share of common stock upon declaration of dividends and voting
rights. Upon liquidation or dissolution,  the Class A preferred stockholders are
entitled  to receive  $2.50 per share  prior to any  distribution  to holders of
common  shares.  The  Class  A  preferred  shares  are  not  subject  to call or
redemption. The dividends of the Class A preferred stock are noncumulative.

NOTE 8 - STOCK WARRANTS

Common stock  warrants and related  exercise  prices have been  adjusted,  where
applicable,  to reflect  the  effects  of the  aforementioned  common  stock and
warrant exchange.

On March 20, 1996, STI sold 174,996 ten-year capital stock purchase  warrants to
its  financial  advisors for one cent each to purchase  174,996  shares of STI's
capital stock,  for a fixed  exercise  price of $3 per share.  The warrants were
issued for services  rendered in connection  with the  registration  offer.  STI
determined the value of these warrants to be $17,497 and recorded this amount in
general and administrative expenses in 1997.

On January 30, 1997, the Company  issued common stock  purchase  warrants in the
amount of 229,896 to  participants  of the Software  Technology,  Inc.  Restated
Employee  Stock  Ownership  Plan and Trust;  240,378 to other  affiliates of the
Company and 174,996, in exchange for the STI warrants described previously, to a
company engaged as a consultant.  In addition,  on January 30, 1997, the Company
issued 425,000  warrants to  Monogenesis  Corporation  for $4,250 in cash.  Each
warrant  entitles the holder to purchase one share of Exigent's  common stock at
an exercise price of $3 per share. The terms of these warrants provide that they
may be exercised during the period  beginning  January 30, 1997 and ending three
years from that date.

Total  warrants  outstanding  at  December  31,  1998 and  January 31, 1998 were
1,036,080 and 1,064,754,  respectively. The warrants exercised during the eleven
months ended  December 31, 1998 and the year ended  January 31, 1998 were 28,674
and 3,852, respectively.  Additionally, at January 31, 1998, 1,664 warrants were
canceled.

<PAGE>

                           EXIGENT INTERNATIONAL, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
          FOR THE ELEVEN MONTHS ENDED DECEMBER 31, 1998 AND YEARS ENDED
                            JANUARY 31, 1998 AND 1997


NOTE 9 - EMPLOYEE RETIREMENT PLANS

The Company has a defined  contribution  pension plan that covers  substantially
all  employees  who have met  certain  age and length of  service  requirements.
Contributions to the plan were 10% of eligible compensation for fiscal 1998B and
1998 and 5% of eligible compensation for 1997. For fiscal 1998B, 1998, and 1997,
the  amount  of  pension  expense  was  $1,763,632,  $1,381,023,  and  $618,838,
respectively.

The Company also sponsors a profit-sharing  plan which allows  substantially all
full-time  employees to defer  compensation under Section 401(k) of the Internal
Revenue Code and the employer to  electively  contribute  to the plan.  Employer
contributions  to the plan are made at the discretion of the Board of Directors.
The  employer  contributions  made  to the  plan  for  1997  were  $618,838.  No
contributions were made in fiscal 1998B and 1998.

NOTE 10 - EMPLOYEE STOCK OWNERSHIP PLAN

The Company has an employee stock ownership plan (ESOP).  Contributions  to this
plan are at the  discretion of the Board of Directors.  Full time  employees who
have  attained the age of  twenty-one  (21) are eligible to  participate  in the
plan.  Contributions  to the plan are allocated  annually to eligible  employees
proportionate  to  their  compensation,  not  including  overtime  and  bonuses.
Employee stock ownership plan contributions charged to operations and applied to
overhead amounted to $0 and $692,241,  respectively, for the eleven months ended
December 31, 1998, $0 and $552,409,  respectively,  for the year ending  January
31, 1998,  and $0 and $247,535,  respectively,  for the year ending  January 31,
1997.  The ESOP had  1,891,694  and  2,056,142  shares of the total  issued  and
outstanding stock, respectively, at December 31, 1998 and January 31, 1998.

Dividends paid on the ESOP shares,  as well as other shares are considered to be
reductions in retained earnings.  The shares owned by the ESOP are considered to
be  outstanding  shares  and  therefore  included  in  the  earnings  per  share
calculation.

The plan acquired  93,833,  62,000,  and 0 shares during the eleven months ended
December 31, 1998 and years ended January 31, 1998 and 1997, respectively,  from
shareholders.  Shares  distributed  from the plan as a result of  termination of
employment were 306,548,  51,174, and 0, during the eleven months ended December
31, 1998 and years ended January 31, 1998, and 1997,  respectively.  The shares'
fair market value was determined  based on the trading value of common shares of
the Company at December 31, 1998 and January 31, 1998.


<PAGE>

                           EXIGENT INTERNATIONAL, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
          FOR THE ELEVEN MONTHS ENDED DECEMBER 31, 1998 AND YEARS ENDED
                            JANUARY 31, 1998 AND 1997


NOTE 11 - LEASE OBLIGATIONS

Office space and equipment is leased under operating  leases expiring in various
years through 2007.

The Company's  corporate  headquarters  are located in Melbourne,  Florida.  The
Company  is  currently  leasing a 29,000  square  foot  building  pursuant  to a
ten-year lease,  which will expire on December 1, 2005, and a 30,000 square foot
building  pursuant to a ten-year lease,  which will expire on February 28, 2007.
It has the right to renew the aforementioned leases for two additional five year
terms and has an option to purchase the property  which may be exercised  during
certain  periods prior to the expiration of the fifth year and of the tenth year
of the  lease.  The  purchase  price is the fair  market  value of the  property
determined by appraisal,  but in no event less than the  outstanding  balance on
the mortgage.

In addition to the corporate headquarters, the Company leases 15,296 square feet
of space in  Alexandria,  Virginia  which  lease will  expire  August  31,  2003
(subject  to the  right to renew  for up to three  additional  one year  terms),
approximately  2,494 square feet of space in Aurora,  Colorado  which lease will
expire October 31, 1999,  approximately  1,946 square feet in Colorado  Springs,
Colorado,  which lease will expire July 1, 2000,  another  1,935  square feet of
space in LaPlata,  Maryland which lease is currently renewed on a month-to-month
basis,  approximately  2,971  square feet of space in Mesa,  Arizona  which will
expire  November 30, 1999 and  approximately  11,188  square feet in  Chantilly,
Virginia which lease will expire in November 30, 2003.

Minimum future rental  payments  under  non-cancelable  operating  leases having
remaining  terms in excess of one year as of  December  31, 1998 for each of the
next five years and in the aggregate are:

Year ending December 31:

1999                                                    1,423,941
2000                                                    1,298,855
2001                                                    1,245,804
2002                                                    1,028,722
2003                                                      921,732
Subsequent to 2003                                        699,354
                                                    ------------------

       Total minimum future rental payments          $  6,618,408
                                                     =================

Rent expense for the eleven  months ended  December 31, 1998 and the years ended
January 31, 1998 and 1997 was $1,211,795,  $830,609 and $649,638,  respectively.
Rent expense was offset by sublease  rental  income for the years ended  January
31, 1998 and 1997 of $15,064, and $66,655, respectively.



<PAGE>



                           EXIGENT INTERNATIONAL, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
          FOR THE ELEVEN MONTHS ENDED DECEMBER 31, 1998 AND YEARS ENDED
                            JANUARY 31, 1998 AND 1997


NOTE 12 - ECONOMIC DEPENDENCY

The Company  sold a  substantial  portion of its  products and services to three
major customers during the eleven months ended December 31, 1998 and years ended
January  31,  1998 and  1997 in the  Satellite  Command  and  Control  Industry.
Transactions  with these major customers;  a commercial  customer,  a government
contractor and a group of U.S. Government agencies, consisted of the following:

<TABLE>
<CAPTION>
Eleven months ended December 31, 1998                              Customer 1               Customer 2                Customer 3
-------------------------------------                         --------------------     ---------------------      -----------------

<S>                                                           <C>                        <C>                          <C>       
Revenues                                                      $   14,735,309             $  5,985,651                 $3,744,421

Accounts receivable - at year end                                    584,252                  416,524                     37,837
Costs and estimated earnings in excess of billings
on uncompleted contracts - at year end                             2,117,731                  297,137                    402,718

Billings in excess of costs and estimated earnings
on  uncompleted contracts - at year end                                  -                    (40,738)                  (172,235)


Year ended January 31, 1998                                       Customer 1                Customer 2               Customer 3
---------------------------                                   --------------------      --------------------      -----------------

Revenues                                                     $    11,700,279            $   11,435,270           $    5,157,842

Accounts receivable - at year end                                    913,281                   737,996                  642,109

Costs and estimated earnings in excess of billings
 on uncompleted contracts - at year end                            1,904,120                   623,662                  444,411

Billings in excess of costs and estimated earnings
on  uncompleted contracts - at year end                               -                      (363,766)                  (30,061)


Year ended January 31, 1997                                       Customer 1                Customer 2               Customer 3
---------------------------                                  --------------------      --------------------      -------------------

Revenues                                                     $    10,308,204          $      7,840,135            $   3,133,871

Accounts receivable - at year end                                  1,313,767                         -                  164,184

Costs and estimated earnings in excess of billings
  on uncompleted contracts - at year end                           1,753,614                 1,108,647                  415,899

Billings in excess of costs and estimated earnings
  on uncompleted contracts - at year end                             (54,673)                        -                 (173,823)
</TABLE>


<PAGE>

NOTE 13 - SOFTWARE DEVELOPMENT COSTS

Some software  development costs are charged to operations when incurred and are
included in operating expenses.  The amounts charged for the eleven months ended
December  31, 1998 and years ended  January 31,  1998,  and 1997 were  $180,673,
$47,854, and $239,986, respectively.

During the eleven  months ended  December  31, 1998 and years ended  January 31,
1998, and 1997, $3,905,349,  $1,149,685 and $556,167,  respectively, of software
development  costs for computer  software to be sold or otherwise  marketed were
capitalized.  The  amortization  of costs related to computer  software  product
development  held for sale was  $950,507,  $304,397  and $108,757 for the eleven
months  ended  December  31, 1998 and years ended  January 31,  1998,  and 1997,
respectively.

NOTE 14 - INCOME TAXES

The  Company  accounts  for  income  taxes  in  accordance  with  SFAS  No.  109
"Accounting for Income Taxes."

The components of the provision for income taxes are as follows:



<TABLE>
<CAPTION>
                                                          Eleven months ended               Year ended
                                                            December 31,          January 31,          January 31,
                                                               1998                  1998                 1997
                                                          -----------------     ----------------      ---------------
<S>                                                        <C>                  <C>                     <C>
Current expense (benefit)
     Federal                                              $    (444,000)         $         593,000      $    3,469

     State                                                     (154,000)                   150,000          12,239

Deferred tax expense
     Federal                                                    575,000                     63,765         124,000
     State                                                      203,000                     24,000          10,000
                                                          -----------------      ----------------       -------------
Total provision for income taxes                          $     180,000          $         830,765      $  149,708
                                                          =================      =================      =============
</TABLE>

The  following is a  reconciliation  of the  provisions  for income taxes to the
expected amounts using the statutory rate:

<TABLE>
<CAPTION>
                                                           Eleven months ended         Year ended January 31,
                                                             December 31,
                                                                 1998                   1998                   1997
                                                           -------------------     -----------------     ---------------
<S>                                                              <C>                   <C>                   <C>  
Expected statutory amount                                        34.0%                 34.0%                 34.0%
State income taxes                                                5.4                   4.6                  (3.7)
Nondeductible meals and entertainment                             4.2                    .6                  (2.1)
Tax penalties                                                     2.1                     -                     -
Nondeductible officers life insurance                             0.2                    .1                  (2.9)
Research and experimental credit                                (15.8)                  (.8)                 19.9
Nondeductible contributions                                        -                     .1                     -
Dividends - ESOP                                                   -                      -                  15.1
Public offering costs                                              -                      -                (107.0)
Other                                                              -                    (.4)                  2.2
                                                           ---------------     -----------------     ------------------
Actual tax provision                                             30.1%                 38.2%                (44.5)%
                                                           ===============     =================     ==================
</TABLE>

<PAGE>

                           EXIGENT INTERNATIONAL, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
          FOR THE ELEVEN MONTHS ENDED DECEMBER 31, 1998 AND YEARS ENDED
                            JANUARY 31, 1998 AND 1997


NOTE 14 - INCOME TAXES (CONTINUED)

Deferred  income  taxes  reflect  the net tax effects of  temporary  differences
between the carrying  amounts of assets and liabilities for financial  reporting
purposes and amounts used for income tax purposes.

The  following  is a summary  of the  significant  components  of the  Company's
deferred tax assets and liabilities:


<TABLE>
<CAPTION>
                                             December 31,         January 31,
                                                  1998                1998
                                            --------------      --------------
<S>                                          <C>                 <C>
Deferred tax assets
   Accrued vacation and sick pay             $    554,000        $   379,277

   NOL carryforwards                              337,000               -
   Tax credit carryforwards                       346,000               -
   Other                                            9,000               -
   Accrued severance pay                           32,000            90,519
   Revenue reserve                                    -              98,717
   Accrued incentive compensation                     -              58,069
   Deferred bid and proposal costs                    -              36,418
                                           --------------     ---------------
                                            $   1,278,000        $  663,000
                                           ==============     ===============
Deferred tax liabilities
    Depreciation                                 (304,000)          (38,060)
    Amortization                               (1,734,000)         (606,940)
                                          ---------------     ----------------
                                            $  (2,038,000)      $  (645,000)
                                          ================    ================
</TABLE>

At December  31,  1998,  the Company had net  operating  loss  carryforwards  of
$872,000 expiring in 2018.

<PAGE>



                           EXIGENT INTERNATIONAL, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
          FOR THE ELEVEN MONTHS ENDED DECEMBER 31, 1998 AND YEARS ENDED
                            JANUARY 31, 1998 AND 1997


NOTE 15 - STOCK OPTIONS

On June 11, 1997, the Company  reserved 600,000 shares of Exigent's common stock
for its  nonqualified  stock option plan (Plan 1NQ).  The terms of these options
provide that the options are  exercisable  on the date of grant and expire three
years after the date the options were granted.  Plan 1NQ is  administered by the
Company's  CEO.  Plan  1NQ  gives  broad  powers  to the CEO to  administer  and
interpret  the Plan,  including the  authority to select the  individuals  to be
granted  options and the particular  form and conditions of each option granted.
All options  are granted at an exercise  price of not less than 100% of the fair
market  value on the date of grant.  Awards may be granted  pursuant to Plan 1NQ
through  June 11,  2007.  Plan 1NQ may be  terminated  earlier  by the  Board of
Directors at its sole discretion.

On March 10, 1997, the Company reserved 200,000 shares of Exigent's common stock
for its  qualified  incentive  stock  option plan (Plan 2Q).  The terms of these
options provide that the options are exercisable on the date of grant and expire
three years after the date of grant.  Plan 2Q is  administered  by the Company's
CEO. Plan 2Q gives broad powers to the CEO to administer and interpret the Plan,
including the authority to select the  individuals to be granted options and the
particular form and conditions of each option  granted.  All options are granted
at an exercise  price of not less than 100% of the fair market value at the date
of grant.  Awards may be granted pursuant to Plan 2Q through March 9, 2007. Plan
2Q may be terminated earlier by the Board of Directors at its sole discretion.

On July 30, 1997, the Company  reserved  240,000  shares for a second  qualified
stock  incentive plan (Plan 3Q) under terms similar to the first qualified plan.
The terms of these  options  provide that the options are  exercisable  one year
from the date of grant and expire  three years after the date of grant.  Plan 3Q
is  administered  by the Company's CEO. Plan 3Q gives broad powers to the CEO to
administer  and  interpret  the Plan,  including  the  Authority  to select  the
individuals  to be granted  options and to  prescribe  the  particular  form and
conditions  of each  option  granted.  However,  a  Committee  of the  Board  of
Directors  shall approve each grant of an option  pursuant to Plan 3Q in advance
of issuance.  In addition,  the Plan  stipulates  that the  aggregate  number of
shares of stock for which  options may be granted  shall be allocated 50% to new
hire  employees and the remaining 50% to such  employees as the CEO shall select
at his  discretion.  All options are granted at an exercise  price not less than
100%  percent of the fair market  value at date of grant.  Awards may be granted
pursuant to Plan 3Q through July 29, 2007. Plan 3Q may be terminated  earlier by
the Board of Directors at its sole discretion.

On September 30, 1997, the Company  reserved  120,000 shares of common stock for
its  non-qualified  non-employee  director  stock  option plan (Plan 5NQ).  Each
optionee who is granted options will receive 40,000 shares of common stock.  The
terms of these options  provide that the options are  exercisable on a quarterly
basis  following  grant at the  rate of  2,500  shares  per  quarter  for the 16
quarters  following grant date,  provided the optionee continues to serve on the
Board of  Directors.  Optionees  will be  eligible to receive a grant of options
upon their  initial  election to the Board.  All  options  will expire ten years
after the date of grant.  Plan 5NQ is  administered  by the  Company's  Board of
Directors or a committee  thereof.  All options are granted at an exercise price
equal to the fair market value of the Company's  common stock on the date of the
grant.  Awards may be granted  pursuant to Plan 5NQ through  September 30, 2007.
Plan  5NQ may be  terminated  earlier  by the  Board  of  Directors  at its sole
discretion.


<PAGE>



                           EXIGENT INTERNATIONAL, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
          FOR THE ELEVEN MONTHS ENDED DECEMBER 31, 1998 AND YEARS ENDED
                            JANUARY 31, 1998 AND 1997



NOTE 15 - STOCK OPTIONS (CONTINUED)


On April 4, 1998,  the Company  reserved  250,000  shares of common  stock for a
qualified  non-officer  stock option plan (Plan 4Q). The terms of these  options
provide that the options are  exercisable  on the date of grant and expire three
years after the options were granted.  Plan 4Q is  administered by the Company's
CEO. Plan 4Q gives broad powers to the CEO to administer and interpret the plan,
including the authority to select the  individuals to be granted options and the
particular form and conditions of each option granted. Options granted are to be
tied to the corporate  financial  performance  goals of the officer's  plan. All
options  are  granted  at an  exercise  price of not less  than 100% of the fair
market value on the date of grant of such option.  Awards may be granted  within
10 years from the date the plan is adopted. Plan 4Q may be terminated earlier by
the Board of Directors at its sole discretion.

On May 8, 1998, the Company  reserved  500,000 shares of Exigent's  common stock
for its  nonqualified  stock option plan (Plan 6NQ).  The terms of these options
provide that the options are  exercisable  on the date of grant and expire three
years after the date the options were granted.  Plan 6NQ is  administered by the
Company's CEO,  except with respect to options granted to the CEO, in which case
the Board of Directors of the Company shall  administer the grants in accordance
with the applicable  approved  Compensation  Committee  award program.  Plan 6NQ
gives broad powers to the CEO to administer  and  interpret the plan,  including
the authority to select the individuals to be granted options and the particular
form and  conditions  of each  option  granted.  All  options  are granted at an
exercise price equal to the fair market value on the day of grant. Awards may be
granted  pursuant  to Plan 6NQ  through  May 7, 2008.  Plan 6NQ may be  amended,
modified or terminated earlier by the Board of Directors at its sole discretion.

On December 17, 1998, the Company reserved  2,500,000 shares of Exigent's common
stock  for  an  Omnibus   Stock  Option  and   Incentive   Plan  (the   "Plan").
Implementation  of the Plan is  subject  to  shareholder  approval.  The Plan is
administered by the Compensation Committee of the Board of Directors and subject
to  the  recommendations  of  the  CEO.  The  Plan  gives  broad  powers  to the
Compensation  Committee to  administer  and  interpret  the Plan,  including the
authority to select the  individuals to be granted  options and to prescribe the
particular  form and  conditions  of each grant.  The Plan sets forth  automatic
stock option grants to Independent Directors of the Board of Directors, whom are
no longer  participating  in  Non-Qualified  Stock  Option  Plan 5NQ, a grant of
10,000  shares of stock on January 1 of each year,  each such grant shall become
exercisable at the rate of 2,500 shares per quarter,  vesting on the last day of
the quarter.  Options will vest if an  Independent  Director is still serving on
the Board of Directors at quarterly  vesting date. The Committee may at any time
discontinue  granting  awards under the Plan (except to Independent  Directors).
The Board of Directors may at any time,  prospectively or  retroactively,  amend
the Plan,  including  the  provisions  with  respect  to  grants to  Independent
Directors,  or for any purpose  that may at the time be permitted by law, or may
at any time  terminate the Plan as to further grants of awards by law, or may at
any time terminate the Plan as to further grants of awards.

All plans,  with the exception of the Omnibus  Stock Option and Incentive  Plan,
were approved by the shareholders at the June 30, 1998 Shareholders' Meeting.

Each plan noted above allows the plan  administrator  the  discretion,  to grant
stock appreciation  rights with each option granted. As of December 31, 1998, no
stock appreciation rights had been granted.

At December 31,  1998,  there were 0, 1,912,  775,  2,486,  0, 0, and  2,102,523
additional shares available for grant under Plan 1NQ, Plan 2Q, Plan 3Q, Plan 4Q,
Plan 5NQ,  Plan 6NQ and the Omnibus Stock Option Plan,  respectively.  Using the
Black Scholes option-pricing model, the per share weighted-average fair value of
stock options  granted  during the eleven months ended December 31, 1998 and the
year ended January 31, 1998, where exercise price equals the market price of the
stock on the grant date was $1.57 and $0.86, respectively. No stock options were
granted prior to fiscal 1998.



<PAGE>



                           EXIGENT INTERNATIONAL, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
          FOR THE ELEVEN MONTHS ENDED DECEMBER 31, 1998 AND YEARS ENDED
                            JANUARY 31, 1998 AND 1997


NOTE 15 - STOCK OPTIONS (CONTINUED)

The following weighted average assumptions were used:

                                                             1998B         1998
                                                  ------------------------------
   Exercise price equal to market price
      on grant date                                         6.22%          6.21%
   Expected risk-free interest rate                         4.72           3.05
   Expected life in years                                     50%            50%
   Expected volatility                                      0.00%          0.00%
   Expected dividend yield



The Company  applies APB Opinion No. 25 in accounting  for its option plans and,
accordingly,  no compensation  cost has been recognized for its stock options in
the financial  statements for stock options granted.  Had the Company determined
compensation  cost  based on the  fair  value at the  grant  date for its  stock
options under SFAS No. 123, the Company's net income (loss) and earnings  (loss)
per share would have been reduced to the pro forma amounts indicated below:

                                                             1998B         1998
                                                  ------------------------------
   Net income (loss):                                     $ 418,160   $1,345,429
   As reported                                            $(552,077)  $  951,559
   Pro forma
   Earnings (loss) per share-diluted:
   As reported                                            $    0.08   $     0.29
   Pro forma                                              $   (0.11)  $     0.21




<PAGE>

Stock option activity, during the periods indicated, is as follows:

<TABLE>
<CAPTION>
                                           For the year ended December 31, 1998       For the year ended January 31, 1998
                                        --------------------------------------------------------------------------------------
                                                                Weighted Average                          Weighted Average
                                               Options           Exercise Price          Options           Exercise Price
                                        --------------------------------------------------------------------------------------
<S>                                              <C>               <C>                  <C>                  <C>
Outstanding - beginning of year                  726,350           $ 2.45                     -              $    -
Granted                                        1,522,854             3.30               836,400                2.32
Exercised                                       (149,050)            2.28               (73,800)               2.45
Forfeited                                        (20,700)            3.35               (36,250)               2.53
Outstanding - end of year                      2,079,454           $ 3.04               726,350              $ 2.45
                                        ======================================================================================
Exercisable at end of year                     1,380,594                                689,750

Weighted-average fair value of
    options granted during the year               $ 1.57                                 $ 0.86
</TABLE>


At  December  31,  1998,  the  range of  exercise  prices  and  weighted-average
remaining  contractual  life of outstanding  options was $2.13 to $4.26 and 1.45
years to 7.90 years,  respectively,  with the weighted average at $3.04 and 4.25
years.




<PAGE>

                           EXIGENT INTERNATIONAL, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
          FOR THE ELEVEN MONTHS ENDED DECEMBER 31, 1998 AND YEARS ENDED
                            JANUARY 31, 1998 AND 1997


NOTE 16 - EARNINGS (LOSS) PER SHARE

The following  table sets forth the  computation  of basis and diluted  earnings
(loss) per share:

<TABLE>
<CAPTION>
                                                Eleven months ended          Year ended January 31,
                                                  December 31,
                                                      1998                1998            1997
                                                 -----------------   --------------   ------------
<S>                                              <C>                 <C>             <C>
Numerator:
Net income (loss)                                $   418,160         $  1,345,429     $ (486,238)
Preferred stock dividends                                  -                    -              -
                                                 -----------         ------------     ------------
  Numerator for basic and diluted earnings
  per share - income available to common
  stockholders                                   $  418,160         $  1,345,429      $ (486,238)
                                                 ----------         ------------      -----------

Denominator:

Denominator for basic earnings per share -
  weighted-average shares                         4,034,039            3,787,639       3,642,514

Effect of dilutive securities:
  Convertible preferred stock                       632,041              695,899               -
  Stock options and warrants                        491,451              163,752               -

  Denominator for diluted earnings per share -
   adjusted weighted-average shares               5,157,531            4,647,290       3,642,514
                                                 ===========          ===========      =========

Basic earnings (loss) per share                  $     0.10          $      0.36      $    (0.13)
                                                 ===========         ============    ============

Diluted earnings (loss) per share                $     0.08          $      0.29      $    (0.13)
                                                 ===========         ============    =============
</TABLE>


The effect of dilutive  securities  is not included in the  computation  for the
year ended January 31, 1997 because to do so would be antidilutive.

Basic  earnings  (loss) per share was restated  for the years ended  January 31,
1998 and 1997 due to an error in the computation.


<PAGE>


                           EXIGENT INTERNATIONAL, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
          FOR THE ELEVEN MONTHS ENDED DECEMBER 31, 1998 AND YEARS ENDED
                            JANUARY 31, 1998 AND 1997

NOTE 17 - COMMITMENTS AND CONTINGENCIES

The Company has  outstanding  purchase  commitments of $2,498,005 as of December
31, 1998. These represent outstanding purchase orders for which neither the item
nor invoice has been received.

NOTE 18 - RELATED PARTY

STI issued  29,161  warrants of STI on March 20, 1996 to a company for which one
of the  directors of STI provided  consulting  services.  The STI warrants  were
converted  into  Exigent  warrants on January 30, 1997 (see Note 8).  Consulting
fees paid by STI to this  company for the years ended  January 31, 1998 and 1997
were $45,485 and $94,620, respectively.

During  fiscal year 1997,  the director  discussed  above was also  Secretary of
Monogenesis  and Chairman and  controlling  shareholder of another  company that
received  shares of the stock of the Company  from  Monogenesis.  On January 31,
1998, this director's services were terminated and on March 23, 1998 he resigned
from the Board.

Exigent paid $38,603 in consulting  fees during the eleven months ended December
31, 1998 to a director of Exigent for consulting services.


<PAGE>


                           EXIGENT INTERNATIONAL, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
          FOR THE ELEVEN MONTHS ENDED DECEMBER 31, 1998 AND YEARS ENDED
                            JANUARY 31, 1998 AND 1997



Note 19 - Quarterly Financial Information (unaudited)

<TABLE>
<CAPTION>
                                                                                                    Two months
                                                              Quarter ended                             ended
                                        --------------------------------------------------------
Eleven months ended December 31, 1998       30-Apr-98           31-Jul-98          31-Oct-98          31-Dec-98
                                        ------------------   ----------------   ----------------   ----------------
<S>                                         <C>                <C>                <C>                <C>        
Revenue                                     $ 7,685,375        $ 8,811,196        $ 9,361,584        $ 5,280,928
Income (loss) before income taxes               161,751            380,734            122,420            (66,745)
Net income                                       97,618            227,949             73,479             19,114
Basic earnings per share                           0.02               0.05               0.02               0.00
Diluted earnings per share *                       0.02               0.04               0.01               0.00
Market price per share
     High                                          4.25               6.19               4.47               4.25
     Low                                           2.94               3.88               2.88               2.44

*  Due to rounding Diluted earnings per share does not tie to the sum of the quarters
</TABLE>

<TABLE>
<CAPTION>
                                                                   Quarter ended
                                  ---------------------------------------------------------------------------
                                     30-Apr-97           31-Jul-97          31-Oct-97          31-Jan-98
                                  ------------------   ----------------   ----------------   ----------------
Year ended January 31, 1998
<S>                                 <C>                <C>                <C>                <C>        
Revenue                             $ 8,114,034        $ 8,657,569        $ 9,140,753        $ 9,836,363
Income before income taxes              485,798            577,089            444,399            668,908
Net income                              288,548            359,209            271,464            426,208
Basic earnings per share                   0.06               0.08               0.06               0.16
Diluted earnings per share                 0.06               0.08               0.06               0.09
Market price per share
     High                                  4.50               2.88               4.38               4.38
     Low                                   2.00               2.00               2.13               2.75
</TABLE>


<PAGE>





Item 9. Changes in and Disagreements With Accountants on Accounting and
        Financial Disclosures

         On March 18,  1998,  the Board of  Directors  of the  Company  approved
changing the  Company's  certifying  accountant to Ernst & Young LLP. The change
was  effective  for the fiscal year ended  December  31,  1998.  The  certifying
accountant  for the previous  years and the fiscal year ended  January 31, 1998,
Hoyman, Dobson & Company, P.A., continues to provide various accounting services
to the  Company  and its  subsidiaries.  The  change  was made  because  the new
certifying  accountant  has greater  national  resources to serve the  Company's
growing needs.

         The principal  accountant's report on the financial  statements for the
previous two years has not contained an adverse opinion or disclaimer of opinion
nor were such reports  qualified or modified as to  uncertainty,  audit scope or
accounting  principles.  The  Company  has not had any  disagreements  with  its
principle  accountants  on any matter of  accounting  principles  or  practices,
financial  statement  disclosure or auditing  scope or procedure  during its two
most recent fiscal years or since then.  During its two most recent fiscal years
or since then, the Company has not been advised by its principal accountant: (i)
that the  internal  controls  necessary  for the  Company  to  develop  reliable
financial  information  do not  exist;  (ii)  that  information  has come to the
accountant's  attention that has led the accountant to no longer be able to rely
on management's representations or that have made the accountant unwilling to be
associated with the financial  statements  prepared by management;  (iii) of the
need to expand  significantly  the scope of its audit,  or that  information has
come to the accountant's  attention that if further  investigated may materially
impact the fairness or reliability of either a previously issued audit report or
the underlying  financial  statements,  or the financial  statements  covering a
period subsequent to the date of the most recent financial statements covered by
an audit report or cause the accountant to be unwilling to rely on  management's
representations  or be associated with the Company's  financial  statements;  or
(iv) that information has come to the accountant's attention that the accountant
has  concluded  materially  impacts  the  fairness  or  reliability  of either a
previously issued audit report or the underlying  financial  statements,  or the
financial  statements  issued  or to  be  issued  covering  the  fiscal  periods
subsequent  to the date of the most recent  financial  statements  covered by an
audit report.

         By  letter  dated  March  27,  1998,  Hoyman,  Dobson &  Company,  P.A.
confirmed  its  agreement  with the  foregoing,  as  disclosed  in Item 4 of the
Company's  filing on Form 8-K on March 30,  1998,  which  letter is  attached as
Exhibit 16 to such Form 8-K.


PART III

Item 10.  Directors and Executive Officers of the Registrant

         "Election  of  Directors"  and  "Section  16(a)  Beneficial   Ownership
Reporting  Compliance"  in the  Company's  Proxy  Statement  for the 1999 Annual
Meeting of Stockholders to be filed with the Securities and Exchange  Commission
on or before April 30, 1999 (the "1999 Proxy Statement") are hereby incorporated
by reference.

Item 11.  Executive Compensation

         "Compensation  of  Executive  Officers"  and  "Compensation   Committee
Interlocks  and Insider  Participation"  in the 1999 Proxy  Statement are hereby
incorporated by reference.

Item 12.  Security Ownership of Certain Beneficial Owners and Management

          "Principal  Stockholders"  in  the  1999  Proxy  Statement  is  hereby
incorporated by reference.

Item 13.  Certain Relationships and Related Transactions

         "Certain  Relationships  and  Related  Transactions"  in the 1999 Proxy
Statement is hereby incorporated by reference.


<PAGE>

PART IV

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

(a)(1)    Financial   Statements   (See  Item  8  of  this  Report)  Reports  of
          Independent  Auditors - March 12, 1999 and April 4, 1998  Consolidated
          Balance  Sheets - December 31, 1998 and January 31, 1998  Consolidated
          Statements of  Operations - For the Eleven  Months Ended  December 31,
          1998,  and the Years  ended  January  31,  1998 and 1997  Consolidated
          Statements  of  Stockholders'  Equity - For the  Eleven  Months  Ended
          December  31,  1998,  and  Years  Ended  January  31,  1998  and  1997
          Consolidated  Statements  of Cash Flows - For the Eleven  Months Ended
          December 31, 1998,  and Years Ended January 31, 1998 and 1997 Notes to
          Financial  Statements  For the Eleven Months Ended  December 31, 1998,
          and Years Ended January 31, 1998 and 1997

(2)       None

(3)       Exhibits Index

Exhibit   Number Exhibit


2.1       Stock  Purchase  Agreement and Plan of  Reorganization  (including all
          Schedules except 1.1) (1)

2.2       Amendment to Stock Purchase Agreement and Plan of Reorganization (2)

3.1       Second Amended and Restated  Certificate of  Incorporation  of Exigent
          International, Inc. (3)

3.2       Amended and Restated Bylaws of Exigent International, Inc. (4)

4         Form of Rights  Agreement  between  Exigent  International,  Inc.  and
          Reliance Trust Company (Rights Agent) dated as of October 27, 1998 (5)

10.1      Agreement between Exigent International, Inc. and Transfer Agent (6)

10.2      Common Stock Purchase Warrant Agreement between Exigent International,
          Inc. and Warrant Agent (7)

10.3      Contract  between  Motorola,  Inc.  Government and Systems  Technology
          Group, Satellite Communications Division and Software Technology, Inc.
          (8)

10.4      Contract  between Naval Research  Laboratory and Software  Technology,
          Inc. dated April 30, 1998 (9)

10.5      Subcontract/Purchase  Order between  Lockheed-Martin  Federal  Systems
          Company and Software Technology, Inc. (10)

10.6      Purchase Orders from Allied Signal Technical Services Corporation (11)

10.7      Lease Agreement, dated May 14, 1993, between Henderson Evans, L.C. and
          Software Technology, Inc. (12)

10.8      Lease Agreement,  dated March 31, 1997,  between Henderson Comet, L.C.
          and Software Technology, Inc. (13)

<PAGE>

10.9      Agreement of Lease,  dated August 15, 1994,  between  Alexandria South
          Associates, L.P. and Software Technology, Inc. (14)

10.10     Addendum  Number One to Agreement of Lease,  dated  September 1, 1998,
          between Hunting Creek, LLC and Software Technology, Inc.

10.11     Incentive Stock Option Plan 1Q (nonqualified) (15)

10.12     Independent Director Stock Option Plan (5NQ) (16)

10.13     Employment   Agreement   dated   June   11,   1997   between   Exigent
          International, Inc. and Jeffrey C. Clift (17)

10.14     Employment   Agreement   dated   June   11,   1997   between   Exigent
          International, Inc. and William K. Presley (18)

10.15     Employment   Agreement   dated   June   11,   1997   between   Exigent
          International, Inc. and Bernard R. Smedley (19)

10.16     Employment   Agreement   dated   June   11,   1997   between   Exigent
          International, Inc. and Don F. Riordan, Jr. (20)

10.17     Confidential  Release and Waiver Agreement between Daniel J. Stark and
          Exigent International, Inc. dated August 11, 1998 (21)

10.18     Loan Agreement,  dated December 31, 1998, between Software Technology,
          Inc. and the Huntington National Bank

10.19     Unlimited  Continuing and Unconditional  Guaranty,  dated December 31,
          1998, between Exigent International,  Inc. and the Huntington National
          Bank

10.20     Deed  of  Lease   Agreement,   dated   September   4,  1998,   between
          Massachusetts  Mutual Life Insurance Company and Software  Technology,
          Inc.

10.21     Amendment to Employment Agreement, dated May 13, 1998, between Bernard
          R. Smedley and Exigent International, Inc.

10.22     Amendment to Employment  Agreement,  dated September 14, 1998, between
          Bernard R. Smedley and Exigent International, Inc.

10.23     Amendment to Employment  Agreement,  dated  October 27, 1998,  between
          Bernard R. Smedley and Exigent International, Inc.

10.24     Employment  Agreement,  dated  December 17, 1998,  between  Jeffrey B.
          Weinress and Exigent International, Inc.

10.25     Form  of  Employment  Agreement  for  selected  employees  of  Exigent
          International, Inc.

10.26     Amendment to Employment Agreement,  dated May 13, 1998, between Don F.
          Riordan, Jr. and Exigent International, Inc.

10.27     Amendment to Employment  Agreement,  dated September 14, 1998, between
          Don F. Riordan, Jr. and Exigent International, Inc.

10.28     Amendment to Employment Agreement, dated October 27, 1998, between Don
          R. Riordan, Jr. and Exigent International, Inc.

10.29     Amendment to Employment Agreement, dated May 13, 1998, between William
          K. Presle and Exigent International, Inc.

10.30     Amendment to Employment  Agreement,  dated September 14, 1998, between
          William K. Presley and Exigent International, Inc.

10.31     Amendment to Employment  Agreement,  dated  October 27, 1998,  between
          William K. Presley and Exigent International, Inc.

10.32     Incentive Stock Option Plan 3Q (23)

10.33     Incentive Stock Option Plan 4Q (24)

10.34     Stock Option Plan 6NQ (25)

10.35     The Software Technology, Inc. Restated Employee Stock Ownership Plan

16        Letter re Change in Certifying Accountant (22)

21        Subsidiaries

27        Financial Data Schedule

          (1)       Exhibit  2 to the  Registration  Statement  on  Form  S-1 of
                    Exigent  International,  Inc., declared effective on January
                    30, 1997.*

          (2)       Exhibit  2(ii)  to  Pre-Effective  Amendment  No.  1 to  the
                    Registration Statement on Form S-1 of Exigent International,
                    Inc., declared effective on January 30, 1997*

          (3)       Exhibit 3.1 to Form 10-Q filed on September 14, 1998.*

          (4)       Exhibit 3.2 to Form 10-Q filed on September 14, 1998.*

          (5)       Exhibit  4.1 to Form 8-K and to Form 8-A filed  November  3,
                    1998.*

          (6)       Exhibit 10(i) to the  Registration  Statement on Form S-1 of
                    Exigent  International,  Inc., declared effective on January
                    30, 1997.*

          (7)       Exhibit 10(ii) to the Registration  Statement on Form S-1 of
                    Exigent  International,  Inc., declared effective on January
                    30, 1997.*

          (8)       Exhibit  10(iii)  to  Pre-Effective   Amendment  No.  2  and
                    Pre-Effective  Amendment No. 3 to the Registration Statement
                    on  Form  S-1  of  Exigent  International,   Inc.,  declared
                    effective on January 30, 1997.*

          (9)       Exhibit 10.17 to Form 10-Q filed June 12, 1998.*

          (10)      Exhibit  10.6  to  Pre-Effective  Amendment  No.  2  to  the
                    Registration Statement on Form S-1 of Exigent International,
                    Inc., declared effective on January 30, 1997.*

          (11)      Exhibit  10(vi)  to  Pre-Effective  Amendment  No.  1 to the
                    Registration Statement on Form S-1 of Exigent International,
                    Inc., declared effective on January 30, 1997.*

          (12)      Exhibit 10.8 to Form 10-K filed on April 30, 1998.*

          (13)      Exhibit 10.9 to Form 10-K filed on April 30, 1998.*

          (14)      Exhibit 10.10 to Form 10-K filed on April 30, 1998.*

          (15)      Exhibit 4 to Form 8-K filed on October  27, 1997 and to Form
                    S-8 filed on October 27, 1997.*

          (16)      Exhibit 4 to Form 8-K  filed on March  30,  1998 and to Form
                    S-8 filed on April 1, 1998.*

          (17)      Exhibit 10.13 to Form 10-K filed on April 30, 1998.*

          (18)      Exhibit 10.14 to Form 10-K filed on April 30, 1998.*

          (19)      Exhibit 10.15 to Form 10-K filed on April 30, 1998.*

          (20)      Exhibit 10.16 to Form 10-K filed on April 30, 1998.*

          (21)      Exhibit 10 to Form 10-Q filed December 15, 1998.*

          (22)      Exhibit 16 to Form 8-K filed on March 30, 1998.*

          (23)      Exhibit  4 to Form 8-K and to Form S-8 filed on  January  2,
                    1998.*

          (24)      Exhibit  4 to Form  8-K and to Form S-8  filed on April  21,
                    1998.*

          (25)      Exhibit  4 to  Form  8-K and to Form  S-8  filed  on May 21,
                    1998.*

          *         Incorporated by reference

          (b)       Reports on Form 8-K:

                    Form 8-K was  filed on March  30,  1998 to  report  (1) that
                    Software  Technology,   Inc.  was  awarded  a  contract  for
                    approximately  $61.5M,  (2)  that  Scott  Bradford  Helm was
                    appointed to serve on the Company's Board of Directors,  and
                    (3) the  Company's  adoption  of a  stock  option  plan  for
                    employees of Exigent and its subsidiaries (Plan 6NQ).

                    Form 8-K was filed on April 21, 1998 to report the Company's
                    adoption of a stock option plan for its employees (Plan 4Q).

                    Form 8-K was filed on May 21, 1998 to report (1) a change of
                    certifying  public   accountants,   and  (2)  the  Company's
                    adoption of a stock  option plan for  nonemployee  directors
                    (Plan 5NQ).

                    Form  8-K was  filed  on  November  3,  1998 to  report  the
                    adoption of a Shareholders Rights Plan.

<PAGE>



SIGNATURES

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

Exigent International, Inc.



March 31, 1999                       By:/s/ Bernard R. Smedley
------------------------                ----------------------------------------
Date                                    Bernard R. Smedley, Chief Executive
                                         Officer



March 31, 1999                       By: /s/ Jeffery B. Weinress
------------------------                ----------------------------------------
Date                                    Jeffery B. Weinress, Senior Vice 
                                          President, Chief Financial Officer


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



March 31, 1999                      By: /s/ Bernard R. Smedley
------------------------                ----------------------------------------
Date                                    Bernard R. Smedley, Director



March 31, 1999                       By: /s/ Arthur H. Collier
------------------------                ----------------------------------------
Date                                    Arthur H. Collier, Director


March 31, 1999                       By:/s/ Scott Helm
------------------------                ----------------------------------------
Date                                    Scott Helm, Director 



March 31, 1999                       By:/s/ Robert M. Janowiak
------------------------                ----------------------------------------
Date                                    Robert M. Janowiak, Director



March 31, 1999                      By: /s/ William K. Presley
------------------------                ----------------------------------------
Date                                    William K. Presley, Director



March 31, 1999                      By: /s/ Don F. Riordan, Jr.
------------------------                ----------------------------------------
Date                                    Don F. Riordan, Jr., Director



March 31, 1999                      By: /s/ Daniel J. Stark
------------------------                ----------------------------------------
Date                                    Daniel J. Stark, Director