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

                                    FORM 10-K
(Mark One)

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

            For the fiscal year ended January 31, 1998

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

            For the transition period from ________ to __________

Commission File Number 333-5753

                           Exigent International, Inc.
             (Exact Name of Registrant as Specified in its Charter)
                   Delaware                        59-3379927
          (State of Incorporation)                (IRS Employer
                                              Identification Number)

                 1225 Evans Road, Melbourne, Florida 32904-2314
                    (Address of Principal Executive Offices)

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

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

    Title of each class                Name of each exchange on which registered
Common Shares, $0.01 par                     The Chicago Stock Exchange
  value per share                            The Chicago Stock Exchange

Common Stock Purchase Warrants

           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 From 10-K or any amendment to this
Form 10-K. [ ]

     The aggregate  market  value,  as of March 31, 1998 (based upon the average
bid and asked  price on such date) of the voting and  non-voting  common  equity
held by nonaffiliates of the registrant was $9,113,264.

     The number of shares outstanding of the registrant's Common Stock and Class
B Common Stock on March 31, 1998 was  3,872,655 and 0,  respectively.  Documents
Incorporated by Reference

     Portions of the Proxy Statement for the 1998 Annual Meeting of Stockholders
(to be filed with the  Securities  and Exchange  Commission on or before May 28,
1998) are incorporated by reference into Part III hereof.


<PAGE>
<TABLE>
<CAPTION>

                                       TABLE OF CONTENTS

<S>                                                                                                   <C>
PART I------------------------------------------------------------------------------------------------1
    ITEM 1.  BUSINESS---------------------------------------------------------------------------------1
    ITEM 2. PROPERTIES--------------------------------------------------------------------------------7
    ITEM 3. LEGAL PROCEEDINGS-------------------------------------------------------------------------7
    ITEM 4. SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS-----------------------------------------7
PART II-----------------------------------------------------------------------------------------------8
    ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS---------------------8
    ITEM 6. SELECTED FINANCIAL DATA-------------------------------------------------------------------8
    ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION------9
    ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK-----------------------------14
    ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA-------------------------------------------- .
    ITEM 9.  CHANGE IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES----41
PART III---------------------------------------------------------------------------------------------42
    ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT-------------------------------------42
    ITEM 11.  EXECUTIVE COMPENSATION-----------------------------------------------------------------42
    ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT-------------------------42
    ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS-----------------------------------------42
PART IV----------------------------------------------------------------------------------------------43
    ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K------------------------43
SIGNATURES ------------------------------------------------------------------------------------------46

</TABLE>

<PAGE>




                                     PART I

ITEM 1.     BUSINESS

                                   THE COMPANY

     Exigent International,  Inc. (together with its subsidiaries,  "Exigent" or
the  "Company")  is a holding  company  formed in 1996 to capitalize on emerging
high-technology opportunities.


     The Exigent Family of Companies:

                         Exigent International, Inc.

            [--------------------------------------------------]

    Software Technology, Inc.                            FotoTag, Inc.

     Exigent was formed on March 25, 1996 by Software  Technology,  Inc. ("STI")
to acquire  and hold all of the assets and 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.  Exigent also issued  645,270  Warrants in exchange for STI
warrants held by STI shareholders and Joseph Walker & Sons, Inc. ("JWSI").  Upon
the completion of the exchange, STI became a wholly owned subsidiary of Exigent.

     As  reflected in the chart above,  Exigent has two  wholly-owned  operating
subsidiaries,  STI and  FotoTag,  Inc.  ("FTI").  Formed in 1978,  STI  provides
systems and software  engineering services to a range of industry and government
clients.  STI  specializes in software  solutions for the command and control of
spacecraft.  FTI  (formed in 1997)  developed  and  markets  internationally  an
advanced  passenger/baggage  reconciliation  system,  FotoTag(R)1,  for  use  by
airports and airlines.

     Typical  customers for the products and services of Exigent's  subsidiaries
are:

          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,  that
               provide cellular telephone services.

          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.

          o    Foreign agencies that control airports and airport security.

          o    Foreign and domestic airlines.

                              PRODUCTS AND SERVICES

SYSTEM ENGINEERING AND RELATED SERVICES

     The Company offers a wide range of custom software  applications  and other
software engineering services. The Company provides advanced technical solutions
for defense,  government,  and industry,  including  advanced  embedded software
products.

<PAGE>
     Company  personnel,  working at Company  facilities or at customer's sites,
develop   operational   systems  for  government   and  commercial   space-based
applications.  These  include  ground  station  support,  test  and  integration
systems,  mission  tasking  systems,  operational  simulators,   launch  support
systems,   and  data  analysis  and  MIS  centers.  The  Company  also  provides
space-based flight systems and simulators.

     In addition to developing and providing the  general-purpose and customized
engineering solutions described in the previous paragraph,  the Company provides
engineering support to the users of OS/COMETTM2 products.

     The Company has signed a strategic  agreement to provide software solutions
to a major vendor of fast-food  systems.  Under this agreement,  Exigent has the
right to participate in the  development of future  improvements  to the system.
This initiative  reflects the Company's goal to leverage its core technology and
skills to expand to other markets.

SOFTWARE PRODUCTS

     The  OS/COMET  suite of command and  control  software  products  forms the
Company's  flagship software offering.  Originally  developed for the support of
satellite  ground  stations and for  spacecraft  integration  and testing,  this
software  suite has evolved into a  general-purpose  integrated  tool set.  This
"Commercial-Off-The-Shelf"   ("COTS")  program  provides  a  real-time  command,
control,  and  data  acquisition   environment  for  government  and  commercial
solutions.  Because  of the  flexibility  of its  design  and its  architecture,
OS/COMET  products can be adapted to many  complex  control  situations,  on the
ground  or  in  space.   OS/COMET  executes  on  any  of  several   inexpensive,
POSIX-compliant  UNIX(TM)3 workstations and makes extensive use of the "X Window
System(TM)"4 and the "OSF/Motif(TM)"5 graphical user environment standards.

     OS/COMET is the heart of the satellite  control system for  "IRIDIUM(R)"6 ,
the global  wireless  communication  system built by a world-wide  consortium of
investors to provide the elusive  "world-wide  dial tone".  IRIDIUM offers local
calling,  data  transmission  and  paging,  anywhere  on  the  planet.  It  is a
constellation  of 66 Low Earth  Orbit  ("LEO")  satellites  (plus  six  on-orbit
spares).

     As a result of the use of  OS/COMET  in the  IRIDIUM  and  other  programs,
Exigent  was  selected  by prime  contractor  Motorola,  Inc.  as the  preferred
supplier  of command  and  control  software  for the  Celestri(TM)7  and future
communication  systems.  Celestri,  a mix of LEO and  Geostationary  Earth Orbit
("GEO")  broadband  satellites in a hybrid  constellation  of about 70 units, is
planned to be operational in 2003.

     STI was also  selected  to upgrade  the  ground  station  software  for the
NAVSTAR  Global  Positioning  System  ("GPS").  A U.S.  Air Force  project,  the
24-satellite  GPS  constellation  provides  precise  and  continuous  world-wide
all-weather  positioning,  navigation data and nuclear detonation detection. The
entire constellation is under OS/COMET command and control.  GPS's 24 satellites
provide worldwide navigation data for military and civilian aircraft, spacecraft
and  land  and  marine   applications.   The  new   system   replaces  a  slower
mainframe-based  system with antiquated "legacy" software that is now too costly
to maintain.

     FotoTag is an innovative airport  passenger/baggage  reconciliation system,
developed  in  response  to the  needs  of  international  airport  and  airline
operations.  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   technology  coupled  with  digital
photography.  FotoTag can interface with currently existing airline networks and
Customer  Reservation Systems ("CRSs").  Exigent expects its FotoTag products to
begin  generating  revenues in the Company's next fiscal year as its airline and
airport passenger/baggage reconciliation system becomes operational.

PRODUCT DEVELOPMENT

     The Company is developing the Active Tracking  Engine(TM)8 ("ATE"), an open
architecture,  middleware  product  for  horizontal  market  applications.  This
object-oriented "network facilitator" enables message-oriented data distribution
in collaborative  computing  environments.  It employs a "publish and subscribe"
information   management  method  that  efficiently  uses  available  bandwidth.
Application-independent  ATE is  being  developed  to  run  under  the  "Windows
95/NT"(R)9 operating system, and can be readily integrated with other platforms.

     The  Company  expects  to market  ATE as a  stand-alone  product  to system
integrators   and  application   developers.   ATE  is  expected  to  provide  a
communication and integration core for a whole family of related products.

     FTI is developing  plans to integrate  ATE in the FotoTag  product to route
messages between distributed servers and workstations in the local installation,
or between any networked  equipment at widely separated  airports.  ATE is being
readied for testing and delivery in the third quarter of 1998.

     The Company plans to develop and offer the  Integrated  Control  Center(TM)
10("ICC"),  a complete  mission control solution based on the OS/COMET family of
products,  but with  added  functionality  provided  by the ATE and  specialized
product  development.  The ICC is expected to deliver a turnkey  ground  station
solution  including  mission  planning,  mission support,  orbit maintenance and
decision-making  capabilities,  all  within  the  context  of a  Graphical  User
Interface.  The  Company  anticipates  that it will find  strategic  partners to
provide certain products to be integrated into the ICC structure.

RESEARCH AND DEVELOPMENT

     Exigent continues to conduct research and development for specific projects
or tasks under contract to customers in government and industry.  The Company is
also now pursuing  diversification into the commercial products business with an
array of  internally  developed  products  planned.  The  Company  funds R&D for
development  or enhancement of certain  products which  management  believes are
commercially marketable.  Generally,  most of the Company's  contract-funded R&D
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.  Through these projects,  Exigent
often  identifies   potential  software  product  offerings  for  commonly  used
functions.  These  concepts are  evaluated  and,  based on  estimated  costs and
commercial  sales  potential,  funded and  developed  by the Company as separate
products. The emphasis placed on low cost solutions by customers drives the need
for reusable software components and products.

     Exigent expensed against earnings  $47,854,  $239,986,  and $154,856 in its
fiscal years ended January 31, 1998, 1997 and 1996, 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.

     In addition  to these  expensed  funds,  the  Company  continues  to invest
significantly  in  product  development.  With  respect  to  commercial  product
development,  the Company has capitalized $1,149,685,  $556,167, and $161,785 in
its fiscal years ended  January 31,  1998,  1997 and 1996,  respectively.  These
amounts include  investments  allocated to FotoTag and to the OS/COMET family of
products.  Exigent  continues its commitment to these  products with  sustaining
engineering expenditures in excess of $2,000,000 against earnings for its fiscal
year ended January 31, 1998.

     Of Exigent's  major sites of operation,  the majority are available for R&D
activity.  Details  of the  various  Exigent  locations  can be found  under the
heading  "Properties".  Each  facility has extensive  computer  resources and is
networked to each of the other facilities.

                               MARKETING AND SALES

MARKETING

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

     Many  of  the  Company's  opportunities  to bid on  contracts  for  systems
development,  software engineering,  or support are derived through solicitation
of,  or  by  initiation  from,   existing  customers  and  through  direct  mail
solicitation.   The   Company   also  uses  leads   generated   by   print-media
advertisements,  Internet inquiries,  round-table forums,  speaking engagements,
trade shows, and specialized publications such as the "Commerce Business Daily".
Exigent's  solicitation  efforts are supported by a number of in-house  business
development  representatives,  periodically  augmented by ad hoc technical teams
recruited  internally from the Company's  engineering staff to pursue individual
contract initiatives.

     Prospects  for the  Company's  present and future  commercial  products are
usually generated through similar means.  Exigent regularly advertises in "Space
News Magazine", "Via Satellite" and "Aviation Week", and participates in various
trade shows, including the recent "Satellite98 Conference".

     Exigent has recently used its new demonstration and multi-media facility to
showcase products and services to a number of potential customers.  Through this
and the other related and coordinated  marketing  efforts mentioned above and an
expansion of the Company's  presence on the World-Wide Web, the Company hopes to
increase  product  sales as a  percentage  of total  revenue  while also growing
revenues from services.

REVENUE SOURCES

     The Company's  revenues are dependent on three significant  customers,  the
Naval Research  Laboratory  ("NRL"),  Motorola,  Inc.  ("Motorola") and Lockheed
Martin Corporation ("Lockheed"), the loss of any one or more of which would have
a material adverse effect on the Company's business,  results of operations, and
financial  condition.  Aggregate sales to each of NRL,  Lockheed and Motorola in
the  Company's  fiscal year ended  January 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  Company  and  its
subsidiaries taken as a whole.

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

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

CONTRACTS

     Generally,  the  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  progress  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
January 1995. It provides for services to be initially  performed  over two base
years with three one-year  options,  with a total  estimated cost of $25,186,826
and a fixed fee of $1,896,362.  As of January 31, 1998,  these three options had
been  exercised  and STI had received cost payments and fees in the aggregate of
$23,691,856  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  $3,914,692  under
this contract for the Company's fiscal year ended January 31, 1998 with a funded
backlog at that time of approximately $806,847.

     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 January 31,  1998,  STI had  received
approximately  $41,886,144  from Motorola  under this and other  contracts.  The
backlog as of January 31, 1998 for Motorola was $1,577,223.

            STI also receives  revenues from Allied  Signal  Technical  Services
Corporation   ("Allied")  under  various   purchase  orders.   It  has  received
approximately $492,633 from Allied during the fiscal year ended January 31, 1998
and approximately $1,041,536 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  January  31,  1998.  Exigent  expects its FotoTag
products to begin generating  revenues in the Company's next fiscal year, as its
airline and airport passenger/baggage reconciliation system becomes operational.
ATE is being readied for testing and delivery in the third  calendar  quarter of
1998.

                                     BACKLOG

     STI estimates that its backlog orders believed to be firm as of January 31,
1998 and 1997 were  $11,334,085  and  $31,571,380,  respectively.  Approximately
$5,101,154  of the backlog in the  Company's  fiscal year ended January 31, 1998
relates to the unfunded portion of government  contracts.  The Company estimates
that  approximately  85% of its backlog on January  31,  1998 will be  completed
before December 31, 1998.  This does not include  potential  additional  revenue
anticipated from this and other new contracts.

                                   COMPETITION

     Exigent  believes it is best known  (through  its  subsidiary  STI) for the
development  of  advanced  command  and  control  technology  for  communication
satellite  systems.  In general,  aerospace/defense  contractors  must obtain or
produce this type of software in  connection  with the  manufacture  and sale of
satellites,  but they often contract with other companies,  such as Exigent,  to
provide the software.

     Exigent   (through  its  subsidiary   STI)  has  two  competitors  who  are
"independent"  providers of command and control systems and software.  There are
few "independent" competitors because of the depth of expertise involved and the
high cost of failure. STI is the largest of this group.

     Exigent   competes   directly  and  indirectly   with  many  of  the  large
aerospace/defense  contractors,  which are also often its  customers.  Companies
within  the  professional  services  sector of the  computer  industry  are also
potential  competitors.  Some professional  computer services  companies service
satellite  ground  stations  with  information  technologies  such as systems to
organize,  archive,  interpret  and analyze  telemetered  data.  These and other
computer  companies  also may  compete in a limited  way with some of  Exigent's
products and services.

     In  addition  to the  independent  competitors,  there  are  seven  leading
aerospace   and/or  defense   contractors  in  the  United  States  that  derive
substantial revenues from space-related sales and who have substantially greater
capital and other resources than Exigent.  Most of them have developed tracking,
telemetry,  and command and control  software  in-house as primary  contractors,
through  sub-contractors  and  through  outsourcing.  Income  derived  from  the
development of such software  represents only a small portion of the revenues of
these companies,  but the software is nevertheless  essential to their contracts
to manufacture satellites.

     FTI builds on the Company's  tracking control  expertise to compete against
the three major systems (developed  outside the USA) that represent  competition
in the airline passenger/baggage reconciliation market.

                        PATENTS, TRADEMARKS, AND LICENSES

     Exigent  received a trademark  registration on the "FotoTag"  product name.
The Company  believes that OS/COMET will also be accorded  registered  status in
the near future.

     Three  provisional  patent  applications  were  filed  in  1997,  including
applications  covering the ATE, and for a software  architecture for a satellite
constellation control schema.

                                    EMPLOYEES

     As  of  January  31,  1998,  the  Company  had  299  employees,   of  which
approximately 90% were engineers. Of these employees,  approximately 45% work in
Melbourne,  Florida,  also the corporate  headquarters,  40% in the Virginia and
Maryland offices in the Washington,  D.C. area, 8% in the Arizona office, and 3%
at the Colorado office,  with the remaining 4% working at customer  locations or
their homes.

     Approximately   87%  of  these   individuals   work  directly  in  software
development, with the remaining 13% providing various services in administrative
positions.

                               EXECUTIVE OFFICERS

            The  executive  officers  of the Company as of the date of filing of
this Form 10-K are as follows:

NAME                             POSITION WITH REGISTRANT

 Bernard R. Smedley               Chairman of the Board, CEO, President, COO,
                                    and Director
 Don F. Riordan, Jr. (1)          Executive Vice-President, Treasurer, CFO,
                                    and Director
 William K. Presley               Executive Vice-President, Chief Technology
                                    Officer, and Director

(1)  Mr.  Riordan is the Trustee of the  Company's  three  qualified  retirement
     plans, including its Employee Stock Ownership Plan (the "ESOP").

     Bernard R.  Smedley,  age 61,  became a director  of Exigent on February 7,
1997.  He currently  serves as Chairman,  CEO,  President and COO of Exigent and
President and COO of STI.  Prior to joining  Exigent,  Mr.  Smedley was founding
President, CEO and COO of AirNet Communications  Corporation,  a private company
(1994 to 1997). In 1994, he took early retirement from Motorola,  Inc., which he
had jointed in 1976, to become President and Chief Executive Officer of AirNet.

     Don F.  Riordan,  Jr.,  age 51, has been a Director of STI since 1980,  and
Secretary/Treasurer  and Chief  Financial  Officer since 1991 as well as holding
the offices of Chairman of the Board, Vice President, Secretary and Treasurer at
various times prior to 1991. Mr. Riordan is currently a Director, Treasurer, and
Chief Financial Officer of Exigent, and is a Director,  and  Secretary/Treasurer
of both STI and FTI.

     William K. Presley, age 51, has been a Director of STI since 1987, Chairman
of the Board until 1997 and Vice President (or President in 1990) since 1987. He
is  currently  serving  as a  Director,  Executive  Vice  President,  and  Chief
Technology  Officer of Exigent.  He has been  employed by the Company since July
1983 as a chief systems engineer.

ITEM 2.     PROPERTIES

     Exigent's corporate  headquarters are located in Melbourne,  Florida on the
"Space  Coast",  near NASA's  Kennedy  Space  Center.  The Company,  through its
subsidiary STI,  currently leases a 29,000 square foot building under a ten-year
lease, which will expire on December 1, 2005. Exigent has the right to renew the
lease for two  additional  five-year  terms,  and has an option to purchase  the
property that may be exercised during certain periods prior to the expiration of
the fifth and tenth years 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  February  1998,  Exigent,  through  its  subsidiary  STI,  occupied  an
additional leased building of approximately 30,000 square feet, located adjacent
to  its  existing   facility.   This  building  houses  the  Exigent   corporate
headquarters,  including the executive, administrative, and marketing staff, FTI
and the  Product  Development  department.  The lease is for a  ten-year  period
expiring in April 2007.

     In addition to the corporate headquarters,  Exigent, through its subsidiary
STI, leases the following space at other sites. Lease expiration dates are shown
parenthetically:

          o    Alexandria,  Virginia - approximately  15,296 square feet (August
               31,  1998);  Exigent  has the right to renew this lease for up to
               two additional one-year terms.

          o    Aurora,  Colorado - approximately  2,494 square feet (October 31,
               1999).

          o    Colorado  Springs,  Colorado -  approximately  1,946  square feet
               (July 1, 2000).

          o    La Plata, Maryland - approximately 1,935 square feet (October 14,
               1998);  Exigent has the right to renew this lease for up to three
               additional one-year terms.
          
          o    Mesa,  Arizona -  approximately  2,971 square feet  (November 20,
               1999).

     Management  believes  that with the new addition to its  headquarters,  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 January 31, 1998.

ITEM 4.     SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS

     No matters were  submitted to a vote of security  holders of Exigent during
the fourth quarter of the Company's fiscal year ended January 31, 1998.


<PAGE>

                                     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 is
reported on the NASDAQ  Electronic  Bulletin Board (the "Bulletin  Board") under
the symbols XGNT and XGNTW, respectively. Reporting commenced on March 24, 1997.
Additionally,  Exigent  Common  Shares and Common  Stock  Purchase  Warrants are
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.

     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 January 31, 1998, as reported in the Daily Trade and Quote
Summary provided by the Bulletin Board:

                                          Common Stock
                       COMMON SHARES      PURCHASE WARRANTS
          1998      High        Low       High        Low

 4th Quarter        $4.25       $2.75     $1.5        $0.625
 3rd Quarter        $4.13       $2.13     $1.0        $0.25
 2nd Quarter        $2.25       $2.00     $0.25       $0.0625
 1st Quarter        $4.50       $2.00     $0.25       $0.0625

     The  Company's  Common Shares and Common Stock  Purchase  Warrants were not
traded  during the Company's  fiscal year ended January 31, 1997.  The Company's
Common Shares and Common Stock Purchase  Warrants have traded only  sporadically
on The Chicago Stock Exchange.

     The  approximate  number of  holders  of Common  Shares of Exigent is 1,115
(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 is  approximately  1,314
(based upon the number of record holders),  excluding holders whose Common Stock
Purchase Warrants are held in nominee or street name by brokers.

     As a private  company  Exigent  paid  annual  cash  dividends  of $0.05 and
$0.075,  respectively,  during its fiscal years ended  January 31, 1996 and 1997
(the amounts stated reflect the reorganization and current capitalization of the
Company).  In its fiscal year ended  January 31,  1998,  the Board of  Directors
decided that Exigent  would forego  dividend  payments in order to invest in the
Company's growth.

ITEM 6.     SELECTED FINANCIAL DATA

     The selected financial data is that of the Company. The pro forma per share
figures  are   calculated   based  upon  the  weighted   average  common  shares
outstanding,  fully  diluted,  of  Exigent  giving  retroactive  effect  to  the
reorganization   (see  notes  to  the   financial   statements   for  a  further
description). The earnings per share amounts prior to 1997 have been restated as
required to comply with  Statement of Financial  Accounting  Standards  No. 128,
Earnings Per Share.
<TABLE>
<CAPTION>

                                                                                    Years Ended January 31
                                                                                 (Amounts in thousands except
                                                                                      per share amounts)

                                                      1998            1997             1996          1995           1994

<S>                                            <C>               <C>             <C>            <C>           <C>       
Revenues                                       $     35,749      $   29,936      $    25,292    $   19,761    $   16,761
     Cost of Sales                                  (26,422)        (24,689)         (19,408)      (16,064)      (13,401)
Gross Profit                                          9,327           5,247            5,884         3,697         3,360
    General and Administrative Expenses              (7,050)         (5,344)          (3,841)       (2,539)       (2,511)
    Research and Development Costs                      (48)           (240)            (155)         (102)         (126)
Operating Income                                      2,229            (337)           1,888         1,056           723
     Total Other Income (Expense)                       (53)              1               (1)           20           (13)
Income before Taxes                                   2,176            (336)           1,887         1,076           710
     Income Tax Expense                                (831)           (150)            (755)         (354)         (216)
Net Income                                     $      1,345       $    (486)     $     1,132     $     722     $     494
Income per Pro Forma Weighted Average
     Common Shares, Outstanding - Diluted      $       0.29       $   (0.13)     $      0.29     $    0.19     $    0.13
Cash Dividends                                 $          -       $    (310)     $      (178)    $     (89)    $     (89)
Cash Dividends Paid per Pro Forma Share
     Outstanding                               $          -       $   0.075      $      0.05     $    0.03     $    0.03
Total Assets                                   $     14,693       $  10,949      $     8,328     $   6,471     $   4,631
Total Long-Term Liabilities
     (Excluding Deferred Income Taxes)         $        467       $     317      $        10     $      17     $      -
Total Stockholders' Equity                     $      7,781       $   6,258      $     4,893     $   3,939     $   3,306
Stockholders' Equity per Pro Forma Weighted
     Common Share, Outstanding - Diluted       $       1.67       $    1.72      $      1.27     $    0.88     $    0.86
Dividends Declared per Pro Forma Weighted
     Average Common Share, Outstanding -
     Diluted                                   $          -       $   0.075      $      0.05     $    0.02     $    0.02

</TABLE>

ITEM 7.   MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OF  FINANCIAL  CONDITION  AND
          RESULTS OF OPERATION

LIQUIDITY

     As of January 31, 1998 and 1997,  the Company's  ratio of current assets to
current liabilities was 1.9 and 2.0,  respectively.  As of January 31, 1998, the
Company's  quick liquidity ratio was 1.8, up from 1.7 for the year ended January
31,  1997.  This  increase  is due to the  increase  in  product  sales over the
Company's fiscal year ended January 31, 1997.

     The  Company's  cash  portfolio  (cash  and  cash  equivalents)   increased
$3,211,803  at January  31,  1998.  This  increase  is 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 paid by  customers.  This increase is the result of the increase in product
sales during the Company's  fiscal year ended  January 31, 1998. By  comparison,
the  Company's  cash  portfolio  increased  $158,621 at January 31,  1997.  This
increase was due to cash provided by operating activities of $1,679,983 and cash
provided  by  financing  activities  of  $428,366  less  cash in the  amount  of
$1,949,728  used  in  investing  activities.  The  cash  provided  by  operating
activities  increased  primarily  due  to an  increase  in  cash  received  from
customers.

     In the  Company's  fiscal  years ended  January 31, 1998 and 1997,  Exigent
acquired  $1,306,693 and  $1,382,163,  respectively,  of capital assets compared
with  $1,122,226 in 1995.  This  expenditure in the Company's  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
resources  for office  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 January 31, 1998 and 1997, the Company
also spent $1,149,685 and $556,167,  respectively,  in capitalized  research and
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.  There was $161,785 of research and development
costs capitalized in fiscal 1995. In the Company's fiscal year ended January 31,
1998,  it  was  determined  that  the   capitalized   research  and  development
expenditures  related to the OS/COMET product incurred prior to such fiscal year
should be expensed  due to a change in  estimated  revenue and  therefore  these
costs were taken against the current fiscal year earnings.

     In addition,  management reviewed the status of the ICC development project
which  had been  accomplished  to date and  determined  that the  asset was more
appropriately classified as property, plant, and equipment, as it was being used
as  demonstration  equipment  during the Company's fiscal year ended January 31,
1998. The first year  depreciation  (20%) was taken against the Company's fiscal
year  ended  January  31,  1998  earnings.  Both of these  management  decisions
resulted in an adjustment in earnings per share from $0.33 to $0.29.

     Cash provided by financing  activities for the Company's  fiscal year ended
January 31,  1998 was  $413,759.  This was  comprised  of  $800,000  borrowed to
purchase  computer  equipment  for product  developments,  offset by $382,108 in
principal  payments on  long-term  debt.  In  addition,  $177,867 of capital was
raised  through  the  exercise  of stock  options  and  warrants.  Cash  used in
financing  activities  for the Company's  fiscal year ended January 31, 1998 was
$428,366.

     In the Company's  fiscal year ended January 31, 1998 the Board of Directors
determined  not to pay any  dividends,  but  instead to use its 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 stock
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 $382,108,  $251,335 and
$6,363 in the  Company's  fiscal years ended January 31, 1998,  1997,  and 1996,
respectively. As of January 31, 1998 and 1997, Exigent had a line of credit with
a bank of  $1,800,000.  Draws  against  the line as of January 31, 1998 and 1997
were  $0  and  $182,000,  respectively.  All  accounts  receivable,   equipment,
furniture, and fixtures of STI are pledged as collateral on 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 the growth plans for such fiscal year and beyond.  The Company may seek debt
or equity  financings.  However,  there can be no assurance  that such financing
will be available on acceptable terms, if at all.

PROVISION FOR INCOME TAXES

     The effective rate for the Company's fiscal year ended January 31, 1998 was
38.2%, up 82.7% from the Company's  fiscal year ended January 31, 1997 effective
rate of negative 44.5%. This increase is the result of the public offering costs
incurred  during the Company's  fiscal year ended January 31, 1997 that were not
deductible  for  federal  and state  taxes.  The Notes to  Financial  Statements
describe the  differences  between the U.S.  statutory and effective  income tax
rates.

ANALYSIS OF OPERATIONS

OVERVIEW

     The Company  has  changed  the last day of its fiscal year to December  31.
Hence,  the  Company's  next fiscal year,  which will be an eleven month period,
will end on December 31, 1998.

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 January 31,  1998 for  commercial  and  government  contracts  was
$1,626,606  and  $9,707,479,  respectively.  The  Company  invested in excess of
$3,000,000  over the  last two  years in its  software  product  OS/COMET.  This
investment  facilitated the significant contract awards that management believes
would have been  impossible  otherwise.  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.  Management  expects
revenue to begin on sales of this product in its next fiscal year.

     The Company  completed  expansion of its corporate  headquarters in January
1998.  The  commercial  satellite  business is projected to continue with strong
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 will place a premium on efforts to retain the
current  workforce.  This risk will put additional  pressure on overall  payroll
costs, but should be an industry-wide  phenomenon.  Management believes that the
benefits  offered by the Company remain above the level of its  competition  and
should help to stabilize  its  workforce.  Overhead  costs for  benefits  should
remain flat and the Company expects to maintain the same percentage of wages for
the Company's  next fiscal year.  Management  believes it is important  that the
Company not reduce  benefits  while the demand for  software  engineers  remains
high.  To do so and hold 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 sustain an effective recruiting
campaign.

COMPARISON OF YEARS ENDED JANUARY 31, 1998, 1997 AND 1996

     Sales  for  the   Company's   fiscal  year  ended  January  31,  1998  were
$35,748,719,  up 19% from sales of $29,935,691 for its fiscal year ended January
31,  1997.  The sales for the  Company's  fiscal  year ended  January  31,  1997
increased  18% from sales of  $25,291,635  for the  Company's  fiscal year ended
January 31, 1996. The breakdown  between  government  and  commercial  sales for
these periods were as follows:

<TABLE>
<CAPTION>
               Year ended 1/31/98                     Year ended 1/31/97                          Year ended 1/31/96

              ----------------------                -----------------------                      ----------------------
<S>            <C>                        <C>        <C>                                <C>        <C>                      <C>
Government     $  23,113,150              65%        $          18,233,915              61%        $        12,892,121      51%
Commercial        12,635,209              35%                   11,701,776              39%                 12,399,514      49%
                                       -------
              === ==================                === ===================     ============     ==== ================= ========
               $     35,748,719          100%        $          29,935,691             100%        $        25,291,635     100%
              === ==================   =======      === ===================     ============     ==== ================= ========
</TABLE>


     These sales  reflect a 65% to 35%  government  to  commercial  split in the
Company's  fiscal year ended  January 31, 1998 compared to a 61% to 39% split in
the  Company's  fiscal year ended January 31, 1997 and a 51% to 49% split in the
Company's  fiscal  year ended  January 31,  1996.  Government  contract  revenue
increased in the Company's fiscal year ended January 31, 1998 due to the Company
obtaining  additional work with Lockheed on the GPS contract as well as the sale
of OS/COMET  licenses for use on the GPS contract.  The  Company's  sales in its
fiscal year ended January 31, 1997  increased  from its sales in its fiscal year
ended January 31, 1996 due largely to obtaining the Lockheed contract as well as
additional work on NRL contracts.

     Gross profit increased  significantly  from $5,246,847  (17.5% of sales) to
$9,326,933  (26.1% of sales)  for the years  ended  January  31,  1997 and 1998,
respectively,  primarily due to the Company's increase in product sales over the
previous fiscal year and a decrease in labor costs on programs.  Gross profit as
a percent of sales for the  Company's  fiscal  year ended  January  31, 1996 was
fairly  consistent  with the  Company's  fiscal  year ended  January 31, 1998 at
$5,883,499 (23.3% of sales).

     The following chart shows the gross profit breakdown between government and
commercial contracts:
<TABLE>
<CAPTION>

Government:                            Year ended 1/31/98          Year ended 1/31/97         Year ended 1/31/96
                                    ------------------------    -----------------------     -----------------------
<S>                                <C>                            <C>                       <C>          
  Revenue from services            $       23,113,510             $  18,233,915             $  12,892,121
  Cost of sales                           (17,842,830)              (14,674,760)              (11,167,741)
                                    ------------------------
                                                                  ---------------------     -----------------------
   Gross profit                    $        5,270,680             $   3,559,155             $  1,724,380
                                   =========================     ======================     =======================
Gross profit as % of Sales                       22.8%                     19.5%                    13.4%


Commercial:                         Year ended 1/31/98              Year ended 1/31/97         Year ended 1/31/96
                                   -------------------------     -----------------------     ----------------------
   Revenue from services           $       12,635,209            $   11,701,776              $ 12,399,514
   Cost of sales                           (8,578,956)              (10,014,084)               (8,240,395)
                                   -------------------------     -----------------------     ------- --------------
   Gross profit                    $        4,056,253            $    1,687,692              $  4,159,119
                                   =========================     =======================     ======================
   Gross profit as % of  Sales                   32.1%                        14.4%                  33.5%
</TABLE>

     General  and  administrative  expenses in the  Company's  fiscal year ended
January 31, 1998 were $7,050,070,  32% or $1,705,859 higher than its fiscal year
ended January 31, 1997 expenses of $5,344,211.  This increase resulted primarily
from $706,139 in administrative labor costs due to the addition of new 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.  General and  administrative  expenses in the Company's
fiscal year ended January 31, 1997 were  $5,344,211,  39% or  $1,503,542  higher
than its expenses of $3,840,669 in its fiscal year ended January 31, 1996.  This
increase resulted  primarily from $1,058,951 in public offering costs,  $364,155
in  additional  costs  related to  marketing  and  recruiting,  and  $387,442 in
administrative  costs due to the hiring of more  employees  during the Company's
fiscal year ended January 31, 1997.

     Net income  increased  significantly  to $1,345,429  (3.8% of sales) in the
Company's fiscal year ended January 31, 1998. Management attributes the increase
to the  increased  OS/COMET  product  sales  from 1.5% of total  revenue  in the
Company's  fiscal year ended  January 31, 1997 to 5.6% in the  Company's  fiscal
year ended January 31, 1998. As was  mentioned  previously in the  discussion on
capitalized research and development,  the decisions to take a more conservative
position on both the  integrated  control  center  asset and the OS/COMET in the
Company's fiscal year ended January 31, 1997 and prior expenditures had a fairly
significant  impact  on the  current  year  earnings.  The  net  income  for the
Company's fiscal year ended January 31, 1998 was decreased for these two actions
by approximately $225,000 or $0.04 per share. Net income dropped from $1,131,741
(4.5% of sales) in the  Company's  fiscal  year ended  January 31, 1996 to a net
loss of $486,238 (1.6% of sales) in the Company's  fiscal year ended January 31,
1997.  Management  attributes this decrease to the  approximately  $1,000,000 of
costs incurred for the public  offering  during the Company's  fiscal year ended
January 31, 1997.

FAS 130 AND 131 DISCLOSURE

     The two new financial Accounting Standards,  130 - Reporting  Comprehensive
Income  and 131 -  Disclosures  about  Segments  of an  Enterprise  and  Related
Information, will not be effective until the Company's next fiscal year. At that
time if there is an impact, the statements will be adjusted  accordingly.  There
appears to be no impact to the  statments as a result of these new standards for
the Company's fiscal year ended January 31, 1998.

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  Factors  Relating  to
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.   As  described   above  (see  "Business  -  Product
Development"  and  "Business  -  Research  and  Development"),  the  Company  is
developing  new products and product  offerings,  including the ATE and the 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  are 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 Operation " and the following:


          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;

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

          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;

          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;

          the unanticipated  expense of new product  development,  the potential
          failure by the Company to develop new products under  development  and
          others  to be  developed  in the  future  successfully  or on a timely
          basis, and the failure of such products to achieve  substantial market
          acceptance;

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

          the  potential  loss of other  customer  opportunities  because of the
          Company's  subcontractor  relationship  with  Motorola  SatCom  on the
          IRIDIUM project;

          the possibility  that Motorola will elect not to move forward with the
          Celestri project,  or that Motorola may choose a vendor other than the
          Company; and

          the potential impact of increases in salary rates due to the amount of
          revenue related to services.


ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

            Not applicable.



<PAGE>
Item 8.  Financial Statements and Supplementary Data

<PAGE>
                          INDEPENDENT AUDITOR'S REPORT

Board of Directors and Stockholders
Exigent International, Inc.

We  have  audited  the  accompanying  consolidated  balance  sheets  of  Exigent
International,  Inc. (a Delaware corporation) and subsidiaries as of January 31,
1998 and 1997,  and the related  consolidated  statements of income,  changes in
stockholders'  equity, and cash flows for the years ended January 31, 1998, 1997
and 1996. These consolidated  financial statements are the responsibility of the
Company's  management.  Our  responsibility  is to  express  an opinion on these
consolidated 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  consolidated  financial  statements are
free of material  misstatement.  An audit includes  examining,  on a test basis,
evidence  supporting the amounts and disclosures in the  consolidated  financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for our opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly,   in  all  material   respects,   the  financial   position  of  Exigent
International,  Inc. and  subsidiaries  as of January 31, 1998 and 1997, and the
results of its  operations  and its cash flows for the years  ended  January 31,
1998, 1997 and 1996 in conformity with generally accepted accounting principles.


By:/s/Charles W. Hoyman, Jr., President
   -------------------------------------
Hoyman, Dobson & Company, P.A.
Melbourne, Florida
April 4, 1998


<PAGE>


                           EXIGENT INTERNATIONAL, INC.
                           CONSOLIDATED BALANCE SHEETS
                            JANUARY 31, 1998 AND 1997

                                     ASSETS

<TABLE>
<CAPTION>
                                                                    January 31,
                                                     -----------------------------------------
                                                           1998                    1997
                                                     -------------------    ------------------
CURRENT ASSETS
<S>                                                     <C>                   <C>            
  Cash and cash equivalents                             $      3,640,508      $       428,705
  Accounts receivable, pledged                                 2,747,383            2,909,746
  Costs and estimated earnings in excess
    of billings on uncompleted contracts, pledged              3,823,768            3,836,828
  Prepaid expenses                                                64,288               60,428
  Inventory                                                        5,288                    -
  Income taxes receivable                                              -              796,143
  Deferred income taxes                                          663,000              333,000
                                                           --------------       -------------

     TOTAL CURRENT ASSETS                                     10,944,235            8,364,850
                                                           --------------       -------------

PROPERTY AND EQUIPMENT, pledged
  Cost                                                         5,304,630            4,043,152
  Accumulated depreciation                                   (3,135,923)          (2,195,150)
                                                           --------------       -------------

     NET PROPERTY AND EQUIPMENT                                2,168,707            1,848,002
                                                           --------------       -------------

OTHER ASSETS
  Software development costs, net of
     accumulated amortization of $195,714
     in 1998 and $217,137 in 1997                              1,508,887              663,599
  Organization costs                                              10,638               11,398
  Deposits                                                        43,466               40,611
  Cash surrender value of life insurance                          17,028               20,269
                                                           --------------       -------------

      TOTAL OTHER ASSETS                                       1,580,019              735,877
                                                           --------------       -------------

      TOTAL ASSETS                                      $     14,692,961      $    10,948,729
                                                           ==============       =============








         The accompanying notes are an integral part of this statement.
</TABLE>

<PAGE>


                           EXIGENT INTERNATIONAL, INC.
                     CONSOLIDATED BALANCE SHEETS (CONTINUED)
                            JANUARY 31, 1998 AND 1997

                      LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>

                                                                       January 31,
                                                         -----------------------------------
                                                                1998              1997
                                                         --------------     ----------------
CURRENT LIABILITIES
<S>                                                      <C>                <C>         
  Line of credit                                         $           -      $    182,000
  Accounts payable                                             392,799         1,100,123
  Accrued expenses                                           3,401,311         2,179,200
  Billings in excess of costs and estimated
     earnings on uncompleted contracts                       1,252,700           418,426
  Income taxes payable                                         242,524                 -
  Current portion, long-term debt                              511,111           248,775
                                                         --------------     -------------
     TOTAL CURRENT LIABILITIES                               5,800,445         4,128,524
                                                         --------------     -------------

LONG-TERM LIABILITIES
  Long-term debt, less current portion                         466,667           311,111
  Deferred income taxes                                        645,000           246,000
  Other liabilities                                                  -             5,541
                                                         --------------     -------------
     TOTAL LONG-TERM LIABILITIES                             1,111,667           562,652
                                                         --------------     -------------

     TOTAL LIABILITIES                                       6,912,112         4,691,176
                                                         --------------     -------------

STOCKHOLDERS' EQUITY
  Class A preferred  shares,  $.01 par value  
     5,000,000  shares  authorized, 688,792 
     and 697,320 issued and outstanding at 
     January 31, 1998 and 1997, respectively; 
     $2.50 per share liquidation/dissolution 
     preference


                                                                 6,888             6,973
  Common stock, $.01 par value, 30,000,000 shares
     authorized,  3,872,655  issued and  outstanding 
     at January 31, 1998:  3,786,600  issued and 
     outstanding at January 31, 1997

                                                                38,726            37,866
  Class B common stock, $.01 par value; 600,000
    shares authorized, no shares issued or outstanding               -                 -
  Paid in capital                                            1,585,007         1,407,915
  Retained earnings                                          6,150,228         4,804,799
                                                         --------------     -------------

     TOTAL STOCKHOLDERS' EQUITY                              7,780,849         6,257,553
                                                         --------------     -------------

COMMITMENTS AND CONTINGENCIES                                        -                 -
                                                         --------------     -------------

      TOTAL LIABILITIES AND
         STOCKHOLDERS' EQUITY                            $  14,692,961      $ 10,948,729
                                                         ==============     =============



         The accompanying notes are an integral part of this statement.
</TABLE>


<PAGE>


<TABLE>
<CAPTION>
                                            EXIGENT INTERNATIONAL, INC.
                                         CONSOLIDATED STATEMENTS OF INCOME
                                FOR THE YEARS ENDED JANUARY 31, 1998, 1997 AND 1996


                                                     1998               1997               1996
                                              -----------------    ---------------   ---------------
<S>                                           <C>                 <C>                <C>          
REVENUES FROM SERVICES                        $     35,748,719    $   29,935,691     $  25,291,635

COST OF SALES                                      (26,421,786)      (24,688,844)      (19,408,136)
                                              -----------------    ---------------   ---------------

GROSS PROFIT                                         9,326,933         5,246,847         5,883,499

GENERAL AND ADMINISTRATIVE
  EXPENSES (Includes $1,058,951 of
  public offering costs in 1997)                    (7,050,070)       (5,344,211)       (3,840,669)

RESEARCH AND DEVELOPMENT COSTS                         (47,854)         (239,986)         (154,856)
                                              -----------------    ---------------   ---------------

OPERATING INCOME (LOSS)                              2,229,009          (337,350)        1,887,974
                                              -----------------    ---------------   ---------------

OTHER INCOME (EXPENSE)
  Interest income                                       36,887            55,939            33,987
  Interest expense                                     (91,276)          (55,119)          (26,311)
  Loss on disposal of fixed assets                      (4,655)                -            (8,509)
  Other, net                                             6,229                 -                 -
                                              -----------------    ---------------   ---------------
TOTAL OTHER INCOME (EXPENSE)                           (52,815)              820              (833)
                                              -----------------    ---------------   ---------------


INCOME (LOSS) BEFORE INCOME TAXES                    2,176,194         (336,530)         1,887,141


INCOME TAX EXPENSE                                    (830,765)         (149,708)         (755,400)
                                              -----------------    ---------------   ---------------


NET INCOME (LOSS)                             $      1,345,429    $     (486,238)   $    1,131,741
                                              =================    ===============   ===============


EARNINGS (LOSS) PER SHARE-BASIC               $            .29    $         (.11)   $          .29
                                              =================    ===============   ===============

WEIGHTED AVERAGE COMMON SHARES
  OUTSTANDING - BASIC                                4,617,712         4,339,834         3,859,092
                                              =================    ===============   ===============

EARNINGS (LOSS) PER SHARE - DILUTED           $             .29    $        (.13)    $         .29
                                              =================    ===============   ===============

WEIGHTED AVERAGE COMMON SHARES
  OUTSTANDING - DILUTED                              4,647,290         3,642,514         3,859,092
                                              ==================    ==============   ===============

         The accompanying notes are an integral part of this statement.

</TABLE>

<PAGE>


<TABLE>
<CAPTION>
                                            EXIGENT INTERNATIONAL, INC.
                             CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
                                FOR THE YEARS ENDED JANUARY 31, 1998, 1997 AND 1996

                                                              Common Stock                     Class A Preferred
                                                    ---------------------------------     -------------------------
                                                        Shares            Amount            Shares           Amount
                                                    ---------------    --------------     ------------    ---------

<S>                                                      <C>        <C>                  <C>           <C>         
BALANCE JANUARY 31, 1995                                   768,400    $    7,684                 -     $          -
Net income                                                       -             -                 -                -
Cash dividends of $.30 per common share
 ($.05 giving retroactive effect
 of stock exchange)                                              -             -                 -                -
                                                    ---------------  -----------      ------------      -----------

BALANCE JANUARY 31, 1996                                   768,400         7,684                 -                -
Issued 46,986 shares of treasury stock
 to fund accrued bonuses, cost $4.25. 
 Market value of Company's common
 stock $14.03.                                                   -             -                 -                -
Issued 38,600 shares of treasury 
 stock to fund accrued ESOP 
 contributions,  cost $4.25. Market value
 of Company's common stock $14.03.                               -             -                 -                -
Issued 18,552 shares of treasury stock for
 bonuses and management incentives, cost
 $4.25. Market value of Company's common
 stock $14.03.                                                   -             -                 -                -
Cash dividend of $.45 per common share
 ($.075 giving retroactive effect of                             -             -                 -                -
 stock exchange)
Issued warrants for services                                     -             -                 -                -
Retired 71,080 shares of treasury stock                   (71,080)          (711)                -                -
5 for 1 exchange of stock                                2,789,280        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
Issued 300,000 shares of stock for services 
and cash                                                   300,000         3,000                 -                -
                                               
Issued warrants for cash                                         -             -                 -                -
Net loss                                                         -             -                 -                -
                                                    --------------   -----------      ------------      -----------

BALANCE JANUARY 31, 1997                                 3,786,600    $   37,866           697,320     $      6,973
Exercise of stock options                                   73,800           738                 -                -
Exercise of warrants                                         3,852            38                 -                -
Shares retired                                               (125)            (1)                -                -
Conversion of 8,528 shares of class A 
preferred stock for 8,528 shares of common stock             8,528            85           (8,528)              (85)
Net income                                                       -             -                 -                -
                                                    --------------  ------------      ------------      -----------

BALANCE JANUARY 31, 1998                                 3,872,655    $   38,726           688,792     $      6,888
                                                    ==============  ============      ============     ============

         The accompanying notes are an integral part of this statement.


</TABLE>

<PAGE>


<TABLE>
<CAPTION>




      Class B Common                                                                                  Total 
------------------------       Paid In                Retained             Treasury          Stockholders
 Shares       Amount            Capital               Earnings              Stock                 Equity
----------  ------------     ---------------       ---------------      ---------------    -------------------

<S>   <C>          <C>               <C>                <C>                <C>                 <C>      
        -             -               29,030             4,646,800          (744,763)           3,938,751
        -             -                    -             1,131,741                 -            1,131,741


        -             -                    -              (177,955)                -             (177,955)
----------  ------------     ---------------       ---------------    ---------------      ---------------

        -             -               29,030             5,600,586          (744,763)           4,892,537



        -             -              459,523                     -           199,690              659,213



        -             -              377,508                     -           164,050              541,558     



        -             -              181,439                     -            78,846              260,285                      

        -             -                    -              (309,549)                -             (309,549)           

        -             -               17,497                     -                 -               17,497
        -             -             (301,466)                    -           302,177                    -
        -             -              (27,893)                    -                 -                    -



        -             -               (6,973)                    -                 -                    -

        -             -              675,000                     -                 -              678,000
        -             -                4,250                     -                 -                4,250

        -             -                    -              (486,238)                -             (486,238)
----------  -----------     ----------------      ----------------    --------------      ---------------

        -             -            1,407,915             4,804,799                 -            6,257,553
        -             -              165,574                     -                 -              166,312
        -             -               11,518                     -                 -               11,556
        -             -                    -                     -                 -                   (1)

        -             -                    -                     -                 -                    -
        -             -                    -             1,345,429                 -            1,345,429
----------  -----------     ----------------     -----------------    --------------      ---------------

        -   $         -     $      1,585,007     $       6,150,228    $            -     $      7,780,849
==========  ===========     ================     =================    ================   ================
   
            The accompanying notes are an integral part of this statement.
   
</TABLE>

<PAGE>

<TABLE>
<CAPTION>

                                            EXIGENT INTERNATIONAL, INC.
                                       CONSOLIDATED STATEMENTS OF CASH FLOWS
                                FOR THE YEARS ENDED JANUARY 31, 1998, 1997 AND 1996

                                                            1998                  1997                  1996
                                                        ----------------     ----------------     ------------------
CASH FLOWS FROM OPERATING
ACTIVITIES:
<S>                                                      <C>                 <C>                  <C>              
  Cash received from customers                           $   36,769,657      $    29,559,470      $      24,719,672
  Interest received                                              36,887               55,939                 33,987
  Cash paid to suppliers and employees                     (31,752,360)         (26,398,002)           (21,621,853)
  Public offering costs                                               -            (366,454)                      -
  Interest paid                                                (91,276)             (55,119)               (26,311)
  Income taxes received (paid)                                  276,902          (1,115,851)              (512,600)
 
                                                        ----------------     ----------------     ------------------
  NET CASH PROVIDED BY OPERATING
      ACTIVITIES                                              5,239,810            1,679,983              2,592,895
                                                        ----------------     ----------------     ------------------

CASH FLOWS FROM INVESTING
ACTIVITIES:
  Cash paid for acquisition of capital assets                (1,306,693)          (1,382,163)           (1,122,226)
  Cash paid for organizational costs                                   -             (11,398)                     -
  Cash  proceeds from the sale of capital
     assets                                                       14,612                    -                36,878
  Cash paid for capitalized software
     development                                            (1,149,685)            (556,167)              (161,785)
                                                        ----------------    -----------------    -------------------
NET CASH USED IN INVESTING
ACTIVITIES                                                  (2,441,766)          (1,949,728)           (1,247,133)
                                                        -----------------    -----------------   -------------------

CASH FLOWS FROM FINANCING
ACTIVITIES:
  Net borrowings under line of credit                         (182,000)              182,000              (900,000)
  Proceeds from issuance of long-term debt                      800,000              800,000                      -
  Principal payments on long-term debt                        (382,108)            (251,335)                (6,363)
  Cash received from exercise of common
      stock options                                             166,311                3,000                      -
  Cash received from exercise of warrants                        11,556                4,250                      -
  Dividends paid                                                      -            (309,549)              (177,955)
                                                        ----------------     ----------------     ------------------
  NET CASH PROVIDED BY (USED IN)
     FINANCING ACTIVITIES                                       413,759              428,366            (1,084,318)
                                                        ----------------     ----------------     ------------------

NET INCREASE IN CASH AND CASH
EQUIVALENTS                                                   3,211,803              158,621                261,444  

CASH AND CASH EQUIVALENTS,
       BEGINNING OF YEAR                                        428,705              270,084                  8,640
                                                        ----------------     ----------------     ------------------

CASH AND CASH EQUIVALENTS, END
   OF YEAR                                                    3,640,508      $       428,705      $         270,084
                                                        ================     ================     ==================


         The accompanying notes are an integral part of this statement.
</TABLE>


<PAGE>





<TABLE>
<CAPTION>
                                                                     1998              1997               1996
                                                              --------------     -------------      ---------------

RECONCILIATION OF NET INCOME (LOSS) TO
NET CASH PROVIDED BY OPERATING
 ACTIVITIES:

<S>                                                           <C>                <C>                <C>           
Net income (loss)                                             $    1,345,429     $    (486,238)     $    1,131,741
                                                              --------------     --------------     --------------

Adjustments to reconcile net income (loss) to net
 cash provided by operating activities:
 Depreciation and amortization                                     1,271,878            855,252            549,621
 Loss on disposal of fixed assets                                      4,655                  -              8,509
 Public offering costs                                                     -            692,495                  -
 Decrease (increase) in accounts receivable                          162,363        (1,458,502)            134,979
 Decrease (increase) in costs and estimated earnings
    in excess of billings on uncompleted contracts                    13,060            861,295          (878,236)
 Decrease (increase) in income tax refunds
    receivable                                                       796,143          (796,143)                  -
 Decrease (increase) in prepaid expenses                             (3,860)             62,378          (108,316)
 Decrease (increase) inventory                                       (5,288)                  -                  -
 Decrease (increase) in deferred income taxes                      (330,000)           (32,000)           (49,700)
 Decrease (increase) in deposits                                     (2,855)            (5,808)            (3,495)
 Decrease (increase) in cash surrender value of life
    insurance                                                         3,241                898            (1,425)
 Increase (decrease) in accounts payable                           (707,324)            878,104             72,979
 Increase (decrease) in accrued expenses                          1,222,111          1,026,052          1,272,207
 Increase (decrease) in deferred income taxes - long-term           399,000            166,000             80,000
 Increase (decrease) in billings in excess of costs and estimated
    earnings on uncompleted  contracts                               834,274            220,087            171,294
 Increase (decrease) in income taxes payable                         242,524          (304,000)            212,500
 Increase (decrease) in other liabilities                            (5,541)                113                237
                                                              --------------     --------------     --------------

 Total adjustments                                                 3,894,381          2,166,221          1,461,154
                                                              --------------     ---------------    --------------


 NET CASH PROVIDED BY OPERATING
    ACTIVITIES                                                $    5,239,810     $    1,679,983     $    2,592,895
                                                              ==============     ==============     ==============





         The accompanying notes are an integral part of this statement.

</TABLE>

<PAGE>



                           EXIGENT INTERNATIONAL, INC.
                CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
               FOR THE YEARS ENDED JANUARY 31, 1998, 1997 AND 1996



SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES

At  January  31,  1996 the  Company  had  accrued  $1,375,959  in bonus and ESOP
payments. The Company paid $175,188 of this amount in cash during the year ended
January 31, 1997.  In addition,  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 the 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.

On May 29, 1996,  the Company  accrued a $260,285 bonus and 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  reflected  at a value 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.









         The accompanying notes are an integral part of this statement.

<PAGE>


                           EXIGENT INTERNATIONAL, INC.
                          NOTES TO FINANCIAL STATEMENTS
               FOR THE YEARS ENDED JANUARY 31, 1998, 1997 AND 1996


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BUSINESS - Exigent International,  Inc. (Exigent),  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.  STI,  therefore,  became a wholly owned subsidiary of Exigent
and was the  consolidated  group's  (the  "Company")  only  source  of  business
operations  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 the
issuance of 300,000  shares of the Company's  stock for services  related to the
reorganization.

STI is a systems and software  engineering firm providing  innovative  technical
solutions  for  government  and industry  throughout  the U.S. STI also produces
OS/COMET - a commercially  available command and control development and support
system.  STI provides systems and software  engineering  services and commercial
off the shelf  products for real-time  command,  control,  and data  acquisition
systems.   STI  retains  expertise  in  leading  edge  technologies   supporting
applications  ranging from bit slice  microprocessor  software to large realtime
systems. STI specializes in command and control applications for ground, flight,
test, and process control and has extensive expertise in graphics,  simulations,
and information systems.

FotoTag 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.

Most recently, the FotoTag subsidiary designed Active Tracking Engine(TM) (ATE),
a new system platform for rapid  application  development of tracking objects in
global  domains.  This  subsidiary  has  positioned  ATE for  implementation  in
end-user  applications  as well as horizontal  marketing  middleware  for system
integrators.

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 are  based  on the  assumption  that the
companies  were combined for the full year,  and  financial  statements of prior
years  have been  restated  to give  effect to the  combination.  There  were no
adjustments  to net assets or net income  during the fiscal  year as a result of
the entities combining.

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.


<PAGE>


                           EXIGENT INTERNATIONAL, INC.
                          NOTES TO FINANCIAL STATEMENTS
               FOR THE YEARS ENDED JANUARY 31, 1998, 1997 AND 1996


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 United States  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  is also  engaged  as a seller  of a number of  software  products.
Generally,  revenue is recognized upon delivery 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 performed.

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.



<PAGE>


                           EXIGENT INTERNATIONAL, INC.
                          NOTES TO FINANCIAL STATEMENTS
               FOR THE YEARS ENDED JANUARY 31, 1998, 1997 AND 1996

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

AMORTIZATION  - The costs of  capitalized  research  and  development  costs are
amortized  over their  estimated  useful lives of three years.  Amortization  is
computed  on the  straight-line  method.  The  amortization  method  used is the
greater of the amount  computed  using (a) the ratio that current gross revenues
for a product bear to the total of current and anticipated future gross revenues
for that product or (b) the  straight-line  method over the remaining  estimated
economic life of the product.

INCOME TAXES - Income  taxes are  provided  for the tax effects of  transactions
reported in the  financial  statements  and consist of taxes  currently  due and
deferred taxes related  primarily to  differences  between the basis of vacation
and sick leave and research and  development  costs for financial and income tax
reporting.  The deferred  tax assets and  liabilities  represent  the future tax
return  consequences  of those  differences,  which  will  either be  taxable or
deductible when the assets and liabilities are recovered or settled.

SOFTWARE   DEVELOPMENT  COSTS  -  In  accordance  with  Statement  of  Financial
Accounting Standard 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  release,  and research and  development  performed as
contractual requirements are charged to operations.

BASIC AND DILUTED  EARNINGS  (LOSS) PER SHARE - During fiscal year ended January
31,  1998,  the  Company  adopted  the  provisions  of  Statement  of  Financial
Accounting  (SFAS) No. 128,  "Earnings per Share".  SFAS No. 128  superseded APB
Opinion  No.  15,   "Earnings  Per  Share",   and  specifies  the   computation,
presentation,  and disclosure  requirements  for earnings per share for entities
with publicly held common stock or potential common stock. It also requires that
prior period  earnings per share be restated to conform to the  requirements  of
SFAS No. 128.

Basic earnings  (loss) per share for the years ended January 31, 1998,  1997 and
1996 have been  computed by dividing net income  (loss) by the weighted  average
number of common shares  outstanding.  Diluted  earnings per share for the years
ended January 31, 1998 and 1997 have been computed by dividing net income by the
weighted  average number of common shares and dilutive  potential common shares,
outstanding.  Diluted  earnings  (loss) per share for the year ended January 31,
1996 is the same as basic  earnings  (loss)  per  share  because  there  were no
dilutive potential shares outstanding during this year.

DISCLOSURES  ABOUT FAIR VALUE OF FINANCIAL  INSTRUMENTS  - The  carrying  amount
reported  in  the  balance  sheet  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.


<PAGE>


                           EXIGENT INTERNATIONAL, INC.
                          NOTES TO FINANCIAL STATEMENTS
               FOR THE YEARS ENDED JANUARY 31, 1998, 1997 AND 1996

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS (CONTINUED) -
As of January 31, 1998 and 1997 the fair value of indebtedness  approximates its
carrying  value and was  determined  using market  interest  rates for debt with
similar maturities.

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.


NOTE 2 - ACCOUNTS RECEIVABLE

The following is a summary of accounts receivable:
                                                       January 31
                                          --------------------------------------
                                                1998                 1997
                                          ----------------     ----------------
   Contract receivables                   $      2,482,463     $      2,658,827
   Retainage receivable                            229,954              237,685
   Other receivables                                34,966               13,234
                                          ----------------     ----------------
           Total accounts receivable      $      2,747,383     $      2,909,746
                                          ================     ================

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>
                                                January 31
                                    ------------------------------------    Estimated
                                       1998                 1997              Life
                                    ---------------     ----------------    ---------

<S>                                 <C>                 <C>                 <C>      
Furniture and equipment             $      585,663      $       558,082     3-8 years
Vehicles                                    15,703               15,703       5 years
Computer equipment                       4,607,879            3,400,579     3-5 years
Leasehold improvements                      95,385               68,788      10 years
                                    ---------------     ----------------
    Total cost                           5,304,630            4,043,152
    Less accumulated depreciation       (3,135,923)          (2,195,150)
                                    ---------------     ----------------
    Net property and equipment      $    2,168,707      $     1,848,002
                                    ===============     ================

</TABLE>

<PAGE>


                           EXIGENT INTERNATIONAL, INC.
                          NOTES TO FINANCIAL STATEMENTS
               FOR THE YEARS ENDED JANUARY 31, 1998, 1997 AND 1996


NOTE 3 - PROPERTY AND EQUIPMENT (CONTINUED)

Depreciation expense charged to general and administrative expense in 1998, 1997
and 1996 was $394,116, $131,535 and $78,737, respectively.  Depreciation expense
charged to applied  overhead in 1998,  1997 and 1996 was $359,528,  $306,916 and
$218,555,  respectively.  Depreciation expense charged directly to cost of sales
in 1998, 1997 and 1996 was $213,077, $308,044 and $167,635, respectively.

NOTE 4 - LINE OF CREDIT

STI has a $1,800,000 line of credit available from a bank as of January 31, 1998
and 1997.  The note  bears  interest  on the  unpaid  principal  balances  at an
interest  rate per annum equal to the bank's prime rate plus .25%. As of January
31, 1998 and 1997 the outstanding  draws against the lines were $0 and $182,000,
respectively.  The  interest  rate at January 31,  1998 and 1997 was 8.25%.  All
accounts  receivable,  equipment,  furniture  and fixtures of STI are pledged as
collateral on the line of credit.

An  additional  line of credit was entered into for $500,000 to fund the startup
expenses  associated with the new FotoTag entity. This note bears the same terms
as the previously  discussed line of credit.  The note was signed in August with
an effective date of June 15, 1997. No amounts have been drawn as of January 31,
1998.

The weighted  average  interest rate on  short-term  borrowings  outstanding  at
January 31, 1998 was 8.25%.

NOTE 5 - ACCRUED EXPENSES

Accrued expenses consist of the following:

                                                         January 31
                                          -----------------------------------
                                             1998                1997
                                          ---------------     ---------------

 Accrued bonuses                           $     150,000      $       55,000
 Accrued payroll taxes                           680,456             647,262
 Accrued fringe benefits                       1,338,515           1,113,552
 Accrued pension and profit sharing              343,064             246,715
 Accrued ESOP payment                            137,225              49,343
 Accrued 401K payable                            220,351              67,328
 Accrued severance pay                           265,000                   -
 Other accrued expenses                          266,700                   -
                                          ---------------     ---------------
     Total accrued expenses                $   3,401,311      $    2,179,200
                                          ===============     ===============



<PAGE>


                           EXIGENT INTERNATIONAL, INC.
                          NOTES TO FINANCIAL STATEMENTS
               FOR THE YEARS ENDED JANUARY 31, 1998, 1997 AND 1996


NOTE 6 - LONG TERM DEBT

Long term debt outstanding consists 
  of the following:
                                                        January 31
                                              -----------------------------
                                                 1998             1997
                                              -------------- --------------
Unsecured note payable to bank,  
payable in thirty-six  monthly  
installments of $630,  including 
interest at 7.25% beginning monthly 
October 1994, ending August 1997.
                                              $      -            $   4,330
Note  payable  to bank,  payable  
in monthly  installments  of  $22,222  
through February 28, 1999. Interest 
is payable on the unpaid balance at 
an interest rate per annum equal to 
the bank's prime rate plus .375%. The 
note is  collateralized by all accounts
receivable,  equipment  and  furniture  
and fixtures of STI and prohibits STI 
from declaring or paying  dividends 
in excess of the lesser of 25% of net
income or $100,000 without prior lender 
approval.

                                                  288,889          555,556
Note payable to bank, payable in monthly 
installments of $22,222, through August
15, 2000. Interest is payable on the 
unpaid balance at a per annum interest rate
equal to the bank's  prime rate plus 
 .375%.  The note is  collateralized  by all
accounts receivable,  equipment, furniture 
and fixtures of STI and prohibits STI
from declaring or paying  dividends in 
excess of the lesser of 25% of net income
or $100,000 without prior lender approval.


                                                  688,889             -
                                              -----------    --------------
 TOTAL LONG-TERM DEBT                             977,778          559,886
 Less: current portion of long-term  debt        (511,111)        (248,775)
                                              -----------    --------------

 TOTAL LONG-TERM DEBT, less current portion$      466,667      $   311,111
                                              ===========    ==============

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

                                                                   Amount
                                                              --------------
                      1999                                         511,111
                      2000                                         311,111
                      2001                                         155,556
                                                              ==============
                                                              $    977,778
                                                              ==============



<PAGE>


                           EXIGENT INTERNATIONAL, INC.
                          NOTES TO FINANCIAL STATEMENTS
               FOR THE YEARS ENDED JANUARY 31, 1998, 1997 AND 1996


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.  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
and Class B common shares.  The Class A preferred shares are not subject to call
or redemption.  The dividends of the Class A preferred stock are  noncumulative.
The issuance of the preferred  stock has been  reflected as a stock dividend and
is given retroactive  recognition in all earnings (loss) and dividends per share
disclosures.


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 fiscal year 1997. The exercise price of
the  warrants  was  greater  than their fair  market  value on the date  issued,
therefore they were deemed to be valued at the $17,497 purchase price.

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 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.

     The  exercise  price of some of the  warrants  was greater  than their fair
market value at January 31, 1998.  These  warrants  were included in the diluted
earnings per share  calculation  at Note 19. The exercise  price of all warrants
was greater  than their fair market  value at January 31,  1997.  At January 31,
1998,  1,664 warrants were canceled.  Total warrants  outstanding at January 31,
1998 and 1997 were 1,064,754 and 1,070,270, respectively.



<PAGE>


                           EXIGENT INTERNATIONAL, INC.
                          NOTES TO FINANCIAL STATEMENTS
               FOR THE YEARS ENDED JANUARY 31, 1998, 1997 AND 1996


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 1998 and 5% of
eligible  compensation  for 1997 and 1996.  Eligible  compensation for the years
ended January 31, 1998, 1997 and 1996 was approximately $13,810,000, $12,377,000
and  $10,958,000, respectively.  For the years ended January 31, 1998,  1997 and
1996,  the amount of pension  expense was  $1,381,023,  $618,838,  and $547,894,
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 the years  ended  January 31,
1998, 1997 and 1996 were $0, $618,838 and $547,894, respectively.


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 $552,409, respectively, for the year ending January
31,  1998, $ -0- and  $247,535,  respectively,  for the year ending  January 31,
1997,  and $542,064  and $ -0-,  respectively,  for the year ending  January 31,
1996. The ESOP has 2,056,142, 2,045,316 and 1,676,640 shares of the total issued
and outstanding stock respectively at January 31, 1998, 1997 and 1996.

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 62,000, 0 and 137,076 shares during the Company's fiscal years
ended  January 31, 1998,  1997 and 1996,  respectively,  from  shareholders.  In
addition,  in fiscal year 1996,  231,600  shares were  purchased  from  treasury
stock. Shares distributed from the plan as a result of termination of employment
were 51,174,  0, and 0 during the Company's fiscal years ended January 31, 1998,
1997 and 1996. The shares' fair market value was determined based on the trading
value of common  shares of the Company at January  31,  1998 and on  independent
appraisal for January 31, 1997 and 1996.




<PAGE>


                           EXIGENT INTERNATIONAL, INC.
                          NOTES TO FINANCIAL STATEMENTS
               FOR THE YEARS ENDED JANUARY 31, 1998, 1997 AND 1996


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 near the
"Space  Coast." The Company is currently  leasing a 29,000  square foot building
pursuant to a ten year lease  which will expire on December 1, 2005.  It has the
right to renew the lease 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,  1998
(subject  to the  right  to renew  for up to two  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 will expire October 14, 1998 (subject to
the right to renew for up to three additional one year terms) and  approximately
2,971 square feet of space in Mesa, Arizona which will expire November 20, 1999.
See also Note 23 - Subsequent Events.

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

  Year ending January 31:                                     Amount
                                                            -----------
  1999                                                      $  871,006
  2000                                                         615,911
  2001                                                         581,416
  2002                                                         586,230
  2003                                                         593,431
  Subsequent to 2003                                           607,658
                                                            -----------
    Total minimum future rental payments                    $3,855,652
                                                            ===========

Rent expense for the years ended  January 31, 1998,  1997 and 1996 was $830,609,
$649,638 and $549,573,  respectively. Rent expense was offset by sublease rental
income for the years ended January 31, 1998,  1997 and 1996 of $15,064,  $66,655
and $62,103, respectively.




<PAGE>


                           EXIGENT INTERNATIONAL, INC.
                          NOTES TO FINANCIAL STATEMENTS
               FOR THE YEARS ENDED JANUARY 31, 1998, 1997 AND 1996


NOTE 12 - ECONOMIC DEPENDENCY

The Company  sold a  substantial  portion of its  products and services to three
major customers  during its fiscal years ended January 31, 1998 and 1997 and two
in its fiscal year ended January 31, 1996 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>
                           1998                              Customer 1             Customer 2        Customer 3
                           -----------                       -------------         --------------    --------------
<S>                                                          <C>                    <C>                <C>         
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)

                           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)

                           1996                              Customer 1            Customer 2
                           -----------                        ---------------      --------------
Revenues                                                     $  10,564,099         $   6,076,692
 Accounts receivable - at year end                                 763,374                -
Costs and estimated earnings in excess of
     billings on uncompleted contracts - at year end             3,241,681               701,094
Billings in excess of costs and estimated
     earnings on  uncompleted contracts - at year end             (149,569)              (16,868)

</TABLE>

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 years ending January
31, 1998, 1997 and 1996 were $47,854, $239,986 and $154,856, respectively.



<PAGE>


                           EXIGENT INTERNATIONAL, INC.
                          NOTES TO FINANCIAL STATEMENTS
               FOR THE YEARS ENDED JANUARY 31, 1998, 1997 AND 1996

NOTE 13 - SOFTWARE DEVELOPMENT COSTS (CONTINUED)

During the years ended January 31, 1998, 1997 and 1996, $1,149,685, $556,167 and
$161,785,  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 $304,397,
$108,757  and  $84,694  for the years ended  January  31,  1998,  1997 and 1996,
respectively.

In management's  opinion,  the net realizable  value of future sales exceeds the
carrying  value  of  unamortized  software  development  costs,   therefore,  no
adjustment to carrying value is required.

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:

                                         Year ended January 31,
                                         ---------------------------------------
                                         1998           1997          1996
                                         ----------     ----------    ----------
Current expense
   Federal                               $  593,000     $   3,469     $  596,000
   State                                    150,000        12,239        129,100
Deferred tax benefit due to 
     temporary differences
   Federal                                  63,765        124,000       26,800
   State                                    24,000         10,000        3,500
                                         ----------    -----------   -----------
Total provision for income  taxes        $  830,765     $ 149,708    $  755,400
                                         ==========    ===========   ===========

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

                                          Year ended January 31,
                                          ------------------------------
                                          1998        1997      1996
                                          ------------------------------
 Expected statutory amount                34.0%       34.0%     34.0%
 Nondeductible meals and entertainment      .6        (2.1)       .3
 Nondeductible officers life insurance      .1        (2.9)       .5
 Nondeductible contributions                .1          -         -
 Tax penalties                              -           -         -
 Dividends - ESOP                           -         15.1      (1.6)
 Research and experimental credit          (.8)       19.9       (.6)
 Public offering costs                      -       (107.0)       -
 State income taxes                        4.6        (3.7)      4.6
 Other                                     (.4)        2.2       2.8
                                          -----      -------    ------
 Actual tax provision                     38.2%      (44.5)%    40.0%
                                          =====      =======    ======


<PAGE>


                           EXIGENT INTERNATIONAL, INC.
                          NOTES TO FINANCIAL STATEMENTS
               FOR THE YEARS ENDED JANUARY 31, 1998, 1997 AND 1996


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 as of January 31, 1998 and 1997:

                                                      January 31
                                               ------------------------
                                                  1998         1997
                                               ----------   -----------
 CURRENT
   Accrued vacation and sick pay               $  379,277    $  333,000
   Revenue reserve                                 98,717        -
   Accrued severance pay                           90,519        -
   Accrued incentive compensation                  58,069        -
   Deferred bid and proposal costs                 36,418        -
                                               -----------  ------------
      Net current deferred tax liability        $ 663,000    $  333,000
                                               ===========  ============
 NONCURRENT
   Depreciation                                   (38,060)        3,600
   Amortization                                  (606,940)     (249,600)
                                               -----------  ------------
      Net noncurrent deferred tax liability    $ (645,000)  $  (246,000)
                                               ===========  ============

NOTE 15- SIGNIFICANT ESTIMATE

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.

NOTE 16 - RECLASSIFICATION

Deferred  income taxes in the January 31, 1996 statement of cash flows have been
reclassified to be consistent with the January 31, 1997 presentation.

NOTE 17 - 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 January 31, 1998 and
1997 was $3,694,629 and $754,282, respectively.




<PAGE>


                           EXIGENT INTERNATIONAL, INC.
                          NOTES TO FINANCIAL STATEMENTS
               FOR THE YEARS ENDED JANUARY 31, 1998, 1997 AND 1996


NOTE 18 - STOCK OPTIONS

On June 11, 1997, the Company  reserved 600,000 shares of Exigent's common stock
for its  nonqualified  stock option plan (Plan 1Q).  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 1Q is  administered  by the
Company's CEO. Plan 1Q 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 $2.25.  Awards  may be  granted
pursuant to Plan 1Q through June 11, 2007. Plan 1Q 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 not less than one hundred  percent of the fair market value
at the date of grant.  The  purchase  price will be at least 110  percent of the
fair market value of the Company's  common stock on the date of the grant if the
optionee  owns more than ten percent of the total  combined  voting power of all
the classes of stock of the Company.  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.  The purchase price will
be at least 110 percent of the fair market  value of  Exigent's  common stock on
the date of the grant if the  optionee  owns more then ten  percent of the total
combined  voting  power of all  classes of stock of the  Company.  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.


<PAGE>


                           EXIGENT INTERNATIONAL, INC.
                          NOTES TO FINANCIAL STATEMENTS
               FOR THE YEARS ENDED JANUARY 31, 1998, 1997 AND 1996


NOTE 18 - STOCK OPTIONS (CONTINUED)

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.

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

At January 31, 1998, there were 25,000,  11,250,  203,600 and 80,000  additional
shares  available  for  grant  under  Plan 1Q,  Plan 2Q,  Plan 3Q and Plan  5NQ,
respectively.  Using  the  Black  Scholes  option-pricing  model,  the per share
weighted-average  fair value of stock options granted during 1998 where exercise
price equals the market price of the stock on the grant date was $0.8261.

The following weighted average assumptions were used:

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



<PAGE>


                           EXIGENT INTERNATIONAL, INC.
                          NOTES TO FINANCIAL STATEMENTS
               FOR THE YEARS ENDED JANUARY 31, 1998, 1997 AND 1996


NOTE 18 - STOCK OPTIONS (CONTINUED)

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 and  earnings per share
would have been reduced to the pro forma amounts indicated below:

                                                                    1998
                                                                    ----------
Net income
    As reported                                                     $  1,345,429
    Pro forma                                                            951,559
Earnings per share, basic and diluted
    As reported                                                     $   0.29
    Pro forma                                                       $   0.21

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

                                                                    Weighted
                                                                    Average
                                           1998                 Exercise Price
                                           -------------   -------------------
Outstanding at January 31, 1997            -                     $    -
     Granted                               836,400                    2.32
     Exercised                             (73,800)                   2.45
     Forfeited                             (36,250)                   2.53
                                           ==============
Outstanding at January 31, 1998            726,350                    2.45
                                           ==============

At January 31, 1998, the range of exercise prices and weighted-average remaining
contractual  life of  outstanding  options was $2.25 to $3.375 and 2.36 years to
3.80 years, respectively.

See also Note 23 - Subsequent Events.

NOTE 19 - EARNINGS PER SHARE

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

<TABLE>
<CAPTION>
                                                    1998         1997         1996
                                                  ----------   ----------    ---------
Numerator:
<S>                                              <C>           <C>         <C>        
  Net income                                     $ 1,345,429   $(486,238)  $ 1,131,741
  Preferred stock dividends                            -             -            -
                                                 -----------   ----------  -----------
  Numerator for basic and diluted earnings
     per share - income available to common
     stockholders                                $ 1,345,429   $(486,238)  $ 1,131,741
                                                 -----------   ----------  -----------


</TABLE>

<PAGE>


                           EXIGENT INTERNATIONAL, INC.
                          NOTES TO FINANCIAL STATEMENTS
               FOR THE YEARS ENDED JANUARY 31, 1998, 1997 AND 1996


NOTE 19 - EARNINGS PER SHARE (CONTINUED)

<TABLE>
<CAPTION>

Denominator:
  Denominator for basic earnings per share -
<S>                                                      <C>                   <C>                  <C>          
     weighted-average shares                             $   4,483,538         $  4,339,834         $   3,859,092
  Effect of dilutive securities:
     Convertible preferred stock with dilutive
       effect                                                -                      697,320             -
     Effect of assumed exercise of outstanding
       stock options and warrants                              163,752                 -                  -
                                                         ----------------     ----------------    -----------------

     Denominator for diluted earnings per
       share - adjusted weighted-average
       shares and assumed conversions                        4,647,290            3,642,514             3,859,092
                                                         ================     ================    =================

  Basic earnings per share                                   .29                  (.11)                 .29
                                                         ================     ================    =================

  Diluted earnings per share                                 .29                  (.13)                 .29
                                                         ================     ================    =================

</TABLE>

NOTE 20 -SOURCE OF LABOR SUPPLY

The  Company's  business of  providing  computer  services  and custom  software
programming is dependent upon having a supply of computer/engineering employees.
As a result of the  expansion of the number of business  users of computers  and
the expansion in demand for computer  services and custom software  programming,
there is a short supply of computer professionals. The situation is not expected
to improve in the near future. However, with the defense contractors having laid
off many of their  computer/engineering  employees  and the  trend  expected  to
continue,  there is currently a pool of employees who would likely have at least
some of the  expertise  needed by the Company.  In  addition,  the Company has a
competitive  benefit  package  it  believes  will  help to  attract  and  retain
qualified employees.

NOTE 20 - DEPENDENCE ON INDUSTRY

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


<PAGE>


                           EXIGENT INTERNATIONAL, INC.
                          NOTES TO FINANCIAL STATEMENTS
               FOR THE YEARS ENDED JANUARY 31, 1998, 1997 AND 1996


NOTE 21 - COMMITMENTS AND CONTINGENCIES

The Company has outstanding  purchase  commitments of $145,309 as of January 31,
1998. These represent outstanding purchase orders for which neither the item nor
invoice has been received.

NOTE 22 - RELATED PARTY

STI paid $48,000 in  consulting  fees during the year ended January 31, 1996 and
issued  29,161  warrants  of STI on March 20, 1996 to a company for which one of
the  directors  of STI  provides  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 year 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.

NOTE 23 - SUBSEQUENT EVENTS

In February,  1998,  the Company  entered  into an  additional  leased  facility
located  adjacent to its existing STI Melbourne  facility.  This new facility is
30,000 square feet and will house the Exigent corporate  headquarters,  FotoTag,
and product  development.  The lease is a 10 year lease with  expiration in
April, 2007.

At April 4, 1998, the Company was in the process of reserving  250,000 shares of
common stock for a qualified non-officers 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 not less than
one  hundred  percent  of the  fair  market  value  on the date of grant of such
option. The purchase price will be at least 110 percent of the fair market value
of the Company's common stock on the date of the grant if the optionee owns more
than ten percent of the total combined  voting power of all the classes of stock
of the Company.  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.

In February of 1998,  the Company  announced  that it entered into  negotiations
related to an  acquisition.  The terms of the  acquisition,  including price and
acquisition date, have not yet been determined.

<PAGE>


ITEM 9.   CHANGE  IN  AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING  AND
          FINANCIAL DISCLOSURES

     On  March  18,  1998,  the  Board  of  Directors  of  the  Company  adopted
resolutions changing the Company's  certifying  accountant to Ernst & Young LLP.
The  engagement  letter was  executed  on March 20,  1998.  The  change  will be
effective  after the audit for the  fiscal  year ended  January  31,  1998.  The
certifying  accountant  for the previous years and the fiscal year ended January
31, 1998,  Hoyman,  Dobson & Company,  P.A.,  will  continue to provide  various
accounting  services to the Company  and its  subsidiaries.  The change was made
because the new certifying accountant has greater national name recognition.

     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.


<PAGE>

                                    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 1998 Annual  Meeting of
Stockholders  to be filed with the  Securities  and  Exchange  Commission  on or
before May 28,  1998 (the "1998 Proxy  Statement")  are hereby  incorporated  by
reference.


ITEM 11.  EXECUTIVE COMPENSATION

     "Compensation of Executive Officers" and "Compensation Committee Interlocks
and Insider  Participation" in the 1998 Proxy Statement are hereby  incorporated
by reference.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     "Principal Stockholders" in the 1998 Proxy Statement is hereby incorporated
by reference.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     "Certain   Relationships  and  Related  Transactions"  in  the  1998  Proxy
Statement are 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)

               Independent Auditor's Report - April 4,1998

               Consolidated Balance Sheets - January 31, 1998 and 1997

               Consolidated  Statements  of Income - For the Years Ended January
               31, 1998, 1997 and 1996

               Consolidated  Statements of Changes in Stockholders' Equity - For
               the Years Ended January 31, 1998, 1997 and 1996

               ConsolidatedStatements  of  Cash  Flows  - For  the  Years  Ended
               January 31, 1998, 1997 and 1996

               Notes to  Financial  Statements  For the Years Ended  January 31,
               1998, 1997 and 1996

        (2)    None

        (3)    Exhibits Index

<PAGE>

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 (5)

3.1       Certificate of Incorporation of Exigent International, Inc. (2)

3.2       Amended  and  Restated   Certificate  of   Incorporation   of  Exigent
          International, Inc. (6)

3.3       Bylaws of Exigent International, Inc. (7)

10.1      Agreement between Exigent International, Inc. and Transfer Agent (3)

10.2      Common Stock Purchase Warrant Agreement between Exigent International,
          Inc. and Warrant Agent (4)

10.3      Contract  between  Motorola,  Inc.  Government and Systems  Technology
          Group, Satellite Communications Division and Software Technology, Inc.
          (11)

10.4      Contract  between Naval Research  Laboratory and Software  Technology,
          Inc. ("NRL Contract") (8)

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 (9)

10.7      Amendment to NRL Contract dated March 10, 1998

10.8      Lease Agreement, dated May 14, 1993, between Henderson Evans, L.C. and
          Software Technology, Inc.

10.9      Lease Agreement,  dated March 31, 1997,  between Henderson Comet, L.C.
          and Software Technology, Inc.

10.10     Agreement of Lease,  dated August 15, 1994,  between  Alexandria South
          Associates, L.P. and Software Technology, Inc.

10.11     Incentive Stock Option Plan 1Q (nonqualified) (12)

10.12     Independent Director Stock Option Plan (5NQ) (13)

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

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

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

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

16        Letter re Change in Certifying Accountant (14)

21        Subsidiaries

23        Consent  of  Hoyman,   Dobson  &  Company,   P.A.,   Certified  Public
          Accountants

27        Financial Data Schedule

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

     (2)  Exhibit  3(i) to the  Registration  Statement  on Form S-1 of  Exigent
          International,  Inc.,  which was  declared  effective  on January  30,
          1997.*

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

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

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

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

     (7)  Exhibit 3(ii) to  Pre-Effective  Amendment  No. 1 to the  Registration
          Statement  on Form  S-1 of  Exigent  International,  Inc.,  which  was
          declared effective on January 30, 1997.*

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

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

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

     (11) Previously filed as an 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., which was declared effective
          on January 30, 1997.*

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

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

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

     *    Incorporated by reference

     (b)  Reports on Form 8-K.

            Form 8-K was filed on January 2, 1998 to report the following items:

     1.   Resignation of Dean Boley as a director and Jeffrey Clift as President
          and a director and election of Bernard Smedley as President.

     2.   Appointment of Robert M. Janowiak to the Board of Directors.

     3.   Adoption of Incentive  Stock Option Plan 3Q and filing of related Form
          S-8.


<PAGE>


                                   SIGNATURES

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

Date:  April 30, 1998

                                       EXIGENT INTERNATIONAL, INC.


                                       By: /s/Bernard R. Smedley
                                          --------------------------------------
                                              Bernard R. Smedley
                                              Chief Executive Officer


     Pursuant to the requirements of the Securities Act of 1934, this report has
been  signed by the  following  persons on behalf of the  registrant  and in the
capacities indicated on April 30, 1998.

          NAME                           POSITION

/s/Bernard R. Smedley
----------------------------
    Bernard R. Smedley            Director, Chief Executive Officer


/s/Don F. Riordan, Jr.
----------------------------
    Don F. Riordan, Jr.           Director, Treasurer, Chief Financial Officer


/s/Daniel J. Stark
----------------------------
    Daniel J. Stark               Director


/s/ William K. Presley
----------------------------
    William K. Presley            Director, Executive Vice President and Chief
                                      Technical Officer


/s/ Robert M. Janowiak
----------------------------
    Robert M. Janowiak            Director


/s/ Arthur H. Collier
----------------------------      Director
    Arthur H. Collier 


<PAGE>



-----------------------------------
1    FotoTag is a registered trademark of Exigent  International,  Inc.

2    OS/COMET is a trademark of Exigent  International,  Inc.

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

4    X  Window  System  is a  trademark  of  the  Massachusetts Institute
     of  Technology.

5    OSF/Motif  is a  trademark  of the Open  Software Foundation.

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

7    Celestri is a trademark of Motorola, Inc.

8    Active Tracking Engine is a trademark  of  Exigent  International,  Inc.

9    Windows  95 and  Windows NT are registered  trademarks of Microsoft  Corp.

10   Integrated  Control  Center is a trademark of Exigent International, Inc.
     and its subsidiaries.