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                       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 DECEMBER 31, 1998
                                       OR
 
  / /    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE
         SECURITIES EXCHANGE ACT OF 1934
 
        FOR THE TRANSITION PERIOD FROM ______________ TO ______________
 
                         COMMISSION FILE NUMBER 0-23635
                            ------------------------
 
                       CONDOR TECHNOLOGY SOLUTIONS, INC.
 
             (Exact name of Registrant as specified in its charter)
 
                  DELAWARE                             54-1814931
      (State or other jurisdiction of        (I.R.S. Employer Identification
       incorporation or organization)                     No.)
  170 JENNIFER ROAD, SUITE 325, ANNAPOLIS,                21401
                  MARYLAND                             (zip code)
  (Address of principal executive offices)
 
                                 (410) 266-8700
              (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
                    None                                  None
 
 Securities registered pursuant to Section 12(g) of the Act: COMMON STOCK, PAR
                              VALUE $.01 PER SHARE
                                (Title of Class)
                            ------------------------
 
    Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days. Yes /X/* No / / *Registrant became
subject to such requirements on February 5, 1998.
 
    Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. / /
 
    The aggregate market value of voting stock held by non-affiliates of the
Registrant as of March 12, 1999 was $98,872,430, based on the last sale price
($9.88) of the Registrant's Common Stock, $.01 par value per share, on the
Nasdaq National Market on March 12, 1999.
 
 As of March 12, 1999, 12,101,488 shares of the Registrant's Common Stock were
                                  outstanding.
 
                      DOCUMENTS INCORPORATED BY REFERENCE:
 
    Certain information called for by Part III of the Form 10-K will either be
filed with the Commission under Regulation 14A under the Securities Exchange Act
of 1934 or by amendment to this Form 10-K, in either case on or before April 30,
1999.
 
--------------------------------------------------------------------------------
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<PAGE>
                       CONDOR TECHNOLOGY SOLUTIONS, INC.
 
                        1998 ANNUAL REPORT ON FORM 10-K
 
                               TABLE OF CONTENTS
 
<TABLE>
<CAPTION>
                                                                                                                PAGE
                                                                                                                -----
<S>         <C>                                                                                              <C>
                                                        PART I
Item 1.     Business.......................................................................................           2
Item 2.     Properties.....................................................................................          10
Item 3.     Legal Proceedings..............................................................................          11
Item 4.     Submission of Matters to a Vote of Security Holders............................................          11
Item 4A.    Executive Officers of the Registrant...........................................................          11
 
                                                        PART II
Item 5.     Market for Registrant's Common Equity and Related Stockholder Matters..........................          14
Item 6.     Selected Financial Data........................................................................          15
Item 7.     Management's Discussion and Analysis of Financial Condition and Results of Operations..........          15
Item 7A.    Quantitative and Qualitative Disclosures About Market Risk.....................................          20
Item 8.     Financial Statements and Supplementary Data....................................................          20
Item 9.     Changes in and Disagreements with Accountants on Accounting and Financial Disclosure...........          42
 
                                                       PART III
Item 10.    Directors and Executive Officers of the Registrant.............................................          43
Item 11.    Executive Compensation.........................................................................          43
Item 12.    Security Ownership of Certain Beneficial Owners and Management.................................          43
Item 13.    Certain Relationships and Related Transactions.................................................          43
 
                                                        PART IV
Item 14...  Exhibits, Financial Statements Schedules, and Reports on Form 8-K..............................          44
</TABLE>
 
                                       1
<PAGE>
                                     PART I
 
ITEM 1. BUSINESS
 
INTRODUCTION
 
    Condor Technology Solutions, Inc. (the "Company") provides a wide range of
information technology ("IT") services and solutions to middle market
organizations, Fortune 1000 companies and public sector organizations. The
Company provides its customers a single source for a broad range of services,
including strategic IT planning and management consulting; decision support
consulting; interactive media services; custom development, integration and
installation of IT systems; enterprise resource planning ("ERP") package
implementation and consulting; contract staffing and recruiting; training and
continuing education; call center and help-desk services; desktop systems and
mainframe maintenance and support; and hardware procurement. The Company works
with its clients to identify areas of their businesses where the effective
deployment of technology can have the maximum impact on executing business
strategies and optimizing business processes.
 
    The Company focuses on marketing its wide range of IT services to middle
market organizations, Fortune 1000 companies and public sector organizations,
which the Company believes typically spend from $2 million to $30 million
annually on their IT needs. In order to become a single-source provider of IT
services and solutions to middle market organizations, Condor acquired, in
separate mergers (the "Mergers"), eight IT service providers (the "Founding
Companies") in February 1998 concurrent with the closing of the Company's
initial public offering (the "Offering") of shares of its Common Stock, $.01 par
value per share (the "Common Stock"). The Founding Companies are:
 
    - Management Support Technology Corp. ("MST");
 
    - Computer Hardware Maintenance Company, Inc. ("CHMC");
 
    - Federal Computer Corporation ("Federal");
 
    - Corporate Access, Inc. ("Corporate Access");
 
    - Interactive Software Systems Incorporated ("ISSI");
 
    - U.S. Communications, Inc. ("USComm");
 
    - InVenture Group, Inc. ("InVenture"); and
 
    - MIS Technologies, Inc. ("MIS").
 
    Since the initial public offering by the Company in February 1998, the
Company has made five additional acquisitions collectively referred to as "Other
Acquisitions". They are:
 
    - Decision Support Technology, Inc. ("DST");
 
    - Louden Associates, Inc. ("Louden");
 
    - LINC Systems Corporation ("LINC");
 
    - PowerCrew, Inc. ("PowerCrew"); and
 
    - the assets and going business of Global Core Strategies, Inc. ("Global").
 
    The Founding Companies and the Other Acquisitions are referred to
collectively herein as "operating companies". Unless otherwise indicated, all
references to the "Company" herein include Condor Technology Solutions, Inc.
("Condor") and all of the operating companies, and references herein to "Condor"
mean Condor Technology Solutions, Inc. prior to the closing of the Mergers.
 
    The Company delivers comprehensive IT services to the insurance and
financial services, healthcare, technology and public sector markets. These
markets are typically characterized by (i) reliance on legacy systems; (ii)
platform migration to client/server architectures; (iii) changing competitive
dynamics, such as globalization and deregulation; and (iv) heavy dependency on
database and proprietary applications. The Company believes that middle market
organizations in these industry groups have been underserved by large IT vendors
which, due to high cost structures, cannot address the requirements of the
middle market adequately.
 
                                       2
<PAGE>
    The Company is organized into three operating divisions: Consulting
Services, System Services and Desktop Services. See "Item 8. Consolidated
Financial Statements, Note 15. Segment Reporting". The Company markets its
services through the sales forces at each of its operating divisions with
oversight from the Company's corporate sales force. This approach allows the
Company to market its services independently or in combination to provide a
solution to a client's specific IT needs. The Company provides IT services
through 32 offices located in 12 states across the United States and in three
foreign countries. As of December 31, 1998, the Company had 1,075 employees. The
Company cultivates long-term relationships with its clients and believes these
long-term relationships present excellent opportunities for further marketing of
its services.
 
MARKET OPPORTUNITY
 
    Heightened competition, deregulation, globalization and rapid technological
advances are forcing organizations to make fundamental changes in their business
processes. These pressures have compelled organizations to improve the quality
of their products and services, reduce costs and strengthen client
relationships. Increasingly, organizations are addressing these issues by
developing and utilizing IT services and solutions that facilitate the rapid and
flexible collection, analysis and dissemination of information within the
organization and among clients and suppliers. The ability of an organization to
maintain and refresh its existing systems and to integrate and deploy new
information technologies in a cost-effective manner has become critical to
competing successfully in today's rapidly changing business environment.
 
    Although many companies have recognized the importance of IT systems and
products to compete in this business climate, the process of designing,
developing, procuring and implementing IT systems has become increasingly
complex. Companies are continuing to migrate away from centralized mainframes
running proprietary software toward decentralized, scalable architectures based
on personal computers, client/server architectures, local and wide area
networks, shared databases and packaged application software. These advances
have greatly enhanced the ability of companies to benefit from the application
of IT. Consequently, the number of companies desiring to use IT in new ways and
the number of end users within these organizations is rising rapidly, yet the
complexity of purchasing and implementing these systems is increasing.
 
    During this time of increasing reliance on IT, rapid technological change
and other challenges, such as the need for Year 2000 conversions, have strained
the capabilities of the internal departments within these organizations. At the
same time, external economic factors have forced organizations to focus on core
competencies and trim workforces in the IT management area. Accordingly, these
organizations often lack the quantity or variety of IT skills necessary to
design and develop emerging IT solutions. Consequently, businesses are
increasingly looking to outsource IT services. By outsourcing IT services,
companies are able to (i) focus on their core business; (ii) access specialized
technical skills; (iii) implement IT solutions more rapidly; (iv) benefit from
flexible staffing; and (v) reduce the cost of recruiting, training and retaining
IT professionals.
 
    The IT service industry has evolved into a highly fragmented environment
with a small number of large, national service providers and a large number of
small-and medium-size service providers, usually only regional in scope. Large
IT service providers typically address the IT needs of large organizations with
substantial IT requirements for a wide range of services, whereas smaller IT
service firms provide specialized services of limited scope. Consequently,
middle market organizations typically rely on multiple, often specialized,
providers to help implement and manage their systems. These smaller IT service
providers often lack sufficient breadth and depth of services or industry
knowledge to satisfy these organizations' need for comprehensive solutions. The
Company believes the current reliance by middle market organizations on multiple
service providers creates multiple vendor relationships that are more difficult
and less cost-effective to manage, prevents the existence of a distinct
responsible party and has an adverse impact on the quality and compatibility of
IT solutions. In an attempt to reduce cost and
 
                                       3
<PAGE>
management complexity, many organizations are seeking to establish preferred
vendor relationships with a small number of IT service providers that are able
to address a broad range of IT service needs.
 
THE CONDOR VISION
 
    The Company aims to be a leading single-source provider of a wide range of
IT services and solutions to middle market organizations in select vertical
markets. In response to market demand, the Company has assembled a diverse set
of IT services, from planning and consulting to development, integration and
installation of IT systems to desktop services. This broad range of services
will enable clients to use the Company as a single provider for their IT needs,
which should result in tighter integration, minimized risk and greater project
management control. In addition, the Company intends to capitalize on the highly
fragmented nature of the IT service industry by pursuing acquisition
opportunities that complement and enhance its existing IT services. The Company
believes that its expertise in providing IT services, industry experience,
client relationships, geographic reach and size will enable it to capitalize on
the anticipated continued growth of the IT needs of middle market organizations.
 
STRATEGY
 
    The Company's objective is to be a leading provider of IT services to middle
market organizations with a focus on select vertical markets. Key elements of
the Company's strategy are presented below.
 
    LEVERAGE CONSULTING SERVICES.  The Company intends to continue to leverage
its high-level planning and strategic consulting services to foster long-term
relationships with clients and to implement technology strategies developed by
the Company. The Company believes that its ability to partner with clients to
define their IT service needs and to deliver the full range of these IT services
provides an attractive single-source solution for its clients.
 
    EXPAND CLIENT RELATIONSHIPS.  The Company believes it can continue to
increase its revenues from existing clients through integrated marketing. Each
of the operating divisions specializes in specific areas of the IT service
market. The Company believes that the access to and goodwill derived from its
long-term relationships with its clients will continue to provide it with
significant advantages in marketing additional services to existing clients.
 
    SECURE FULL-SERVICE CONTRACTS.  The Company believes the broader range of IT
services and geographic coverage available from the combination of its operating
divisions allows it to be a single-source provider of IT services. By being a
single-source provider, the Company has a competitive advantage in meeting the
IT requirements of middle market organizations and provides the Company the
opportunity to secure full-service contracts from a larger group of potential
clients.
 
    RECRUIT, TRAIN AND RETAIN TECHNICAL PERSONNEL.  The Company focuses on
recruiting, training and retaining highly skilled IT professionals in response
to the shortage of and significant competition for such professionals. Condor
Staffing, a unit of the System Services Division, is dedicated solely to
identifying, attracting and staffing IT professionals, and the Company focuses
in both its System Services and Desktop Services divisions on training such
professionals. While these activities will continue to be conducted primarily on
behalf of the Company's clients, these capabilities enable the Company to
enhance its ability to rapidly staff Company engagements as it implements its
growth strategy. The Company provides competitive incentives, compensation and
benefits in order to retain its IT professionals, including the use of options
to purchase its Common Stock.
 
    EXPAND SERVICES AND GEOGRAPHIC REACH.  The Company plans to expand its
services and add new businesses in order to offer new and existing clients
access to a more complete range of services. The Company intends to expand its
services by addressing emerging technologies, including web-based systems,
Internet, intranet and object-oriented development systems. The Company also
plans to expand its geographic reach based on its clients' needs.
 
                                       4
<PAGE>
    DECENTRALIZED MANAGEMENT PHILOSOPHY; ACHIEVE CENTRAL OPERATING
EFFICIENCIES.  The Company operates with a decentralized management structure to
provide superior client service and a motivating environment for its various
operating companies. The Company manages its finance, accounting, management
information systems, treasury, employee benefits and certain purchasing
arrangements on a centralized basis. The operating companies and any
subsequently acquired businesses will continue to manage the professional
services and technical aspects of their respective businesses in a manner
consistent with historical practices and as dictated by local market conditions.
The Company believes that this approach will enable the operating divisions and
any subsequently acquired businesses to maintain their high level of client
service and contact, while allowing them to draw upon the collective resources
of the Company as a whole.
 
    PURSUE STRATEGIC ACQUISITIONS AND ALLIANCES.  Given the highly fragmented
nature of the IT service industry, the Company believes significant acquisition
opportunities exist. The Company seeks to acquire IT service companies to
strengthen its core competencies, to offer complementary services and to
facilitate its expansion into new geographic areas. The Company believes that it
will be regarded by acquisition candidates as an attractive acquiror because of:
(i) the Company's integrated marketing strategy, which will offer owners of
acquisition candidates significant opportunities to enhance the growth of their
businesses; (ii) its decentralized management strategy; (iii) the Company's
visibility and access to financial resources as a public company; and (iv) the
potential for the owners of the business being acquired to participate in the
Company's planned internal growth and growth through acquisitions, while at the
same time realizing near-term liquidity. The Company's acquisitions are
customarily paid for with a combination of cash and stock and may involve
contingent consideration terms.
 
    In addition to acquisitions, the Company may seek to form strategic
relationships with business partners to share technical and industry knowledge
and pursue joint marketing opportunities. These relationships typically will
allow the Company to gain access to training, product support and the technology
developed by these partners.
 
SERVICES
 
    The Company offers its clients a single source for a broad range of IT
services. The Company delivers each of these services independently or in
combination to provide a solution for a client's specific IT needs.
 
                              CONSULTING SERVICES
 
- BUSINESS PROCESS REENGINEERING
 
- IT STRATEGY PLANNING
 
- INTERACTIVE MEDIA SERVICES
 
- DECISION SUPPORT PLANNING AND ANALYSIS
 
- SYSTEM ARCHITECTURE DEVELOPMENT
 
- CUSTOMER RELATIONSHIP MANAGEMENT
 
- TECHNOLOGY INFRASTRUCTURE DESIGN
 
- FUTURE TECHNOLOGY PLANNING AND REFRESHMENT
 
- YEAR 2000 PLANNING AND CONSULT
 
- STRATEGIC MARKETING SERVICES
 
                                SYSTEM SERVICES
 
- DATAMART AND DATA WAREHOUSE DESIGN AND IMPLEMENTAION
 
- LAN/WAN DESIGN AND IMPLEMENTATION
 
- ENTERPRISE RESOURCE PLANNING PACKAGE IMPLEMENTATION AND CONSULTING
 
                                       5
<PAGE>
- CONTRACT STAFFING AND RECRUITING
 
- TRAINING AND CONTINUING EDUCATION
 
- TECHNOLOGY INFRASTRUCTURE DESIGN
 
- INFORMATION ACCESS SOFTWARE DESIGN AND IMPLEMENTATION
 
- CLIENT/SERVER DEVELOPMENT AND INTEGRATION
 
- PROJECT MANAGEMENT AND RESOURCE PLANNING
 
- SOFTWARE APPLICATION DESIGN AND DEVELOPMENT
 
- CONFIGURATION, TESTING AND INSTALLATION
 
                                DESKTOP SERVICES
 
- CALL CENTER DESIGN AND OPERATION
 
- SYSTEMS INSTALLATION MAINTENANCE AND SUPPORT
 
- HARDWARE AND SOFTWARE MAINTENANCE
 
- HELP-DESK OPERATIONS
 
- SYSTEMS TESTING AND ENGINEERING
 
- HARDWARE AND SOFTWARE PROCUREMENT
 
    The Company's extensive IT services are summarized in the following
paragraphs.
 
CONSULTING SERVICES
 
    STRATEGIC IT PLANNING AND MANAGEMENT CONSULTING.  The Company's consultants
provide strategic IT planning and management consulting to senior management,
typically through a client's chief executive officer, chief financial officer or
chief information officer. These services involve the development of long-term
technology plans that help the client to achieve specific strategic business
objectives and include IT needs analysis, technology infrastructure design,
future technology planning and refreshment, systems architecture development,
decision support planning and analysis, business process automation and Year
2000 planning and consulting. The Company's ability to perform such strategic
consulting services gives it the opportunity to deliver "follow-on" services to
implement its recommended technology strategies.
 
    DECISION SUPPORT CONSULTING.  The Company provides resources to integrate
relevant information from across an enterprise and the external environment into
a single data warehouse. Consultants analyze the types of information required
and the data currently available in order to develop a prototype decision
support system, and then operate and support the system. From this foundation,
Condor consultants and engineers provide an automated system of data warehouses
for sales, marketing and financial management to use in planning and analysis.
 
    INTERACTIVE MEDIA SERVICES.  The Company provides services in integrating
voice, video, text and data on the Internet. This is done through vehicles such
as Web sites, intranets, customized training and Web conferencing to build new,
more effective lines of communication with customers, internal work groups and
suppliers. These tools can be integrated with the business and enterprise
applications already used by customers to enhance management of their business.
 
SYSTEM SERVICES
 
    DEVELOPMENT, INTEGRATION AND INSTALLATION OF IT SYSTEMS.  The Company offers
its clients a single source for a wide range of IT services required to
successfully design, develop and implement integrated IT solutions in diverse
computing environments. The Company's services include client/server development
and integration; LAN and WAN design and implementation; project management and
resource planning; hardware and software selection; information access software
design and installation; systems migration planning and implementation;
configuration, testing and installation; and software application design and
development. The Company integrates servers, mini-computers and mainframe
systems, workstations, terminals and communication gateways into single
integrated networks. The Company also develops, sells and supports proprietary
software for information access and delivery in the end-user, production-data
 
                                       6
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market, primarily under the Safari InfoTOOLS brand name. This software enables
clients to manage information across virtually all types of databases, computing
platforms and operating systems in a three-tiered, client/server environment.
 
    ENTERPRISE RESOURCE PLANNING.  The Company offers its clients a single
source for ERP focusing on the implementation and customization of ERP software
packages. ERP programs automate manufacturing, financial, materials management,
human resources and other infrastructure functions of companies, improving
efficiency and generating data that give companies insight into the
profitability of their internal operations.
 
    CONTRACT STAFFING AND RECRUITING.  The Company contracts to provide both
temporary and permanent personnel with highly specialized technical skills. In
order to obtain the necessary technical personnel for its contract staffing
business, the Company conducts extensive recruiting operations. The Company also
uses these recruiting services to fulfill its internal personnel requirements.
 
    TRAINING AND CONTINUING EDUCATION.  The Company offers IT training through
its training facilities in Hartford, Connecticut and Annapolis, Maryland. The
Company offers training courses in data modeling, Java and SilverStream
programming, Microsoft NT certification courses and various other areas. The
Company's services also include skills assessment, interactive learning
solutions at the desktop and courseware. The Company also uses its training
facilities to fulfill its internal training requirements.
 
DESKTOP SERVICES
 
    CALL CENTER SUPPORT.  The Company contracts to provide single source call
center and help-desk staffing solutions for handling hardware problem solving,
standard and customer software applications, shipping and tracking questions as
well as other services. This service allows a client to assess its effectiveness
and develop new strategies and enables access to information on a real time
basis.
 
    SYSTEMS MAINTENANCE AND SUPPORT.  The Company provides a complete array of
desktop systems maintenance and support services to its clients, including
hardware and software maintenance, and systems testing and engineering. These
services, which are provided both on-site and on a remote basis, allow clients
to make efficient use of their technology tools by minimizing network
disruptions and downtime through the Company's rapid response to applications
inquiries.
 
    PROCUREMENT.  The Company resells hardware and software as part of its
desktop services. The Company maintains a dedicated procurement infrastructure
to manage the acquisition process through purchasing arrangements with
distributors, aggregators and manufacturers. The Company is a certified reseller
of products of leading hardware and software manufacturers, including Microsoft,
IBM, Novell, NEC, 3Com, Compaq, Unisys, Hewlett-Packard and Toshiba.
 
CLIENTS AND ALLIANCE PARTNERS
 
    The Company's clients include a broad array of middle market commercial and
public sector users of IT services. The Company primarily focuses on serving
four vertical markets: insurance and financial services, healthcare, technology
and public sector. In addition, the Company has established relationships with
alliance partners that involve joint marketing, software distribution and the
provision of services on a subcontractor basis.
 
    For the year ended December 31, 1998, the Company's top 10 clients accounted
for 35% of the Company's unaudited pro forma combined revenues. In 1998, no
single client accounted for 10% of the Company's unaudited pro forma combined
revenues.
 
                                       7
<PAGE>
SALES AND MARKETING
 
    The Company's marketing efforts focus on middle market organizations, which
the Company believes typically spend from $2 million to $30 million annually on
their IT needs. Within these organizations, the Company specifically targets the
insurance and financial services, healthcare, technology and public sector
markets.
 
    The Company focuses its sales and marketing efforts around four principal
goals: (i) continuing to expand the existing sales and marketing efforts of the
operating divisions; (ii) integrated marketing of complementary service
capabilities of the operating divisions and any subsequently acquired companies
across the Company's client base; (iii) leveraging the experience and reputation
of the Company's senior management to secure middle market, IT service contracts
in the $10 million to $50 million range; and (iv) establishing the Company as a
nationally recognized, full-service provider of IT services.
 
    The Company markets its services through each of the sales forces in the
operating divisions as well as through the Company's corporate sales force. This
approach allows the Company to market its services independently or in
combination to provide a solution to a client's specific IT needs. The Company
has added sales and marketing personnel to assist senior executives in
increasing the number of new clients and the amount of business generated from
existing clients.
 
    The Company generates sales leads through referrals from clients and
management consultants, responses to requests for proposals, strategic alliances
with complementary companies, the Company's Internet web site and associated
links, industry seminars, trade shows, direct telephone and mail campaigns and
advertisements in trade journals. In addition, the Company leverages the
experience and reputation of its senior management team within the IT service
industry. The Company also has retained senior industry consultants to assist in
identifying, marketing and securing large IT service contracts with middle
market organizations.
 
    The Company has implemented marketing and advertising campaigns to establish
the Company as a leading provider of IT offerings to middle market
organizations. The Company believes these efforts will help it obtain new
clients and attract and retain employees.
 
COMPETITION
 
    The market for the Company's services is highly competitive. The Company's
competitors vary in size and in the scope of the products and services that they
offer. Primary competitors generally include consulting and systems integrators,
"Big Five" accounting firms, applications development firms, service groups of
computer equipment companies, general management consulting firms, programming
companies, temporary staffing firms and other IT service providers.
Traditionally, the largest service providers have principally focused on
providing full-service solutions to international Fortune 500 companies. An
emerging group of service companies is exploring opportunities in broader
markets, including Cambridge Technology Partners, Sapient Corporation,
Whitman-Hart, Inc., Perot Systems Corporation, Renaissance Worldwide and
Technology Solutions Corp.
 
    There are relatively low barriers to entry into the Company's markets, and
the Company expects to face competition from established and emerging companies.
Increased competition may result in greater pricing pressure, which could
adversely affect the Company's gross margins. In addition, many of the Company's
competitors have greater financial, development, technical, marketing and sales
resources than the Company. As a result, the Company's competitors may be able
to adapt more quickly to new or emerging technologies and to changes in client
requirements, or to devote greater resources than the Company to the
development, promotion, sale and support of IT products and services. In
addition, there is a risk that clients may elect to increase their internal IT
resources to satisfy their IT solutions needs. The Company also intends to enter
new markets and offer new services, and expects to face intense competition in
these new markets from existing and new competitors, particularly since barriers
to entry in the IT
 
                                       8
<PAGE>
service industry are low. There can be no assurance that the Company will
continue to provide IT services and products demanded by the market or be able
to compete successfully with existing or new competitors. An inability to
compete in its market effectively would have a material adverse effect on the
Company's results of operations, financial condition and business.
 
    The Company believes that the principal competitive factors in the IT
service industry include quality of service, availability of qualified technical
personnel, responsiveness to client requirements and needs, price, ability to
deliver on large multi-year contracts, breadth of product and service offerings,
timely completion of projects, adherence to industry technical standards,
capital resources and general market reputation. The Company also believes that
a variety of competitive factors beyond its control, including the capabilities,
resources and reputations of its competitors, may affect the Company's ability
to compete effectively.
 
EMPLOYEES
 
    The Company's success depends in large part upon its ability to attract,
develop, motivate and retain highly skilled technical employees. The Company
dedicates significant resources to employee recruitment and employs multiple
recruiting methods, such as targeted college hiring, newspaper and technical
periodical classified advertising, participation in national and regional job
fair networks and the establishment of employee referral incentive programs. The
Company supplements its internal recruiting efforts by using the resources of
its contract staffing business, including access to a database of qualified
technical professionals. Qualified technical employees are in great demand and
are likely to remain a limited resource for the foreseeable future. Candidates
are typically screened through detailed interviews by the Company's recruiting
personnel, technical interviews by consultants and an appraisal by the Company's
managers.
 
    The Company has developed programs to help train, motivate and retain its
employees. For example, the Company utilizes a performance-based incentive
compensation program. The Company has also developed training programs to guide
technical personnel through a progression of skill and competency development
programs. As another incentive measure, the Company has issued and will continue
to issue options to its employees under its 1997 Long-Term Incentive Plan. Most
importantly, in addition to formal programs, the Company maintains an
environment that fosters creativity and recognizes technical excellence.
 
    The Company is dependent upon its ability to attract, hire and retain
technical personnel who possess the skills and experience necessary to meet the
staffing requirements of its clients and the Company's own personnel needs.
Competition for individuals with proven technical skills is intense. There can
be no assurance the Company will be able to recruit or retain the technical
personnel necessary to execute its business and growth strategy.
 
    As of December 31, 1998, the Company had 1,075 employees. None of the
Company's employees is represented by a collective bargaining agreement.
Although most consultants are Company employees, the Company does engage
consultants as independent contractors from time to time. The Company considers
its relations with its employees to be good.
 
                                       9
<PAGE>
ITEM 2. PROPERTIES
 
    The Company's headquarters are located in Annapolis, Maryland. In addition
to its headquarters, the Company leases office space and warehouse space as
follows:
 
<TABLE>
<CAPTION>
Location                                                           Type
---------------------------------------------  ---------------------------------------------
<S>                                            <C>
Allentown, PA................................  Office/Warehouse
Annapolis, MD................................  Two Offices/Training Center/Warehouse
Andover, MA..................................  Office/Warehouse
Atlanta, GA..................................  Office
Avon, CT.....................................  Office
Baltimore, MD................................  Office
Bloomfield, CT...............................  Office
Boston, MA...................................  Office
Burlington, MA...............................  Office
Chelmsford, MA...............................  Office
Denver, CO...................................  Office
Falls Church, VA.............................  Office
Framingham, MA...............................  Office
Hanover, Germany.............................  Office
Langhorne, PA................................  Office/Warehouse
Malvern, PA..................................  Office
McLean, VA...................................  Office
Mexico City, Mexico..........................  Office
Nashua, NH...................................  Office
Norwalk, CT..................................  Office
Oklahoma City, OK............................  Office
Palo Alto, CA................................  Office
Pittsburgh, PA...............................  Office
San Jose, CA.................................  Office
Scottsdale, AZ...............................  Office
Seal Beach, CA...............................  Office
Seattle, WA..................................  Office
Stamford, CT.................................  Office
Utrecht, The Netherlands.....................  Office
Vienna, VA...................................  Warehouse
Waltham, MA..................................  Office
Wellesley, MA................................  Office
</TABLE>
 
    The leases expire at various times between 1999 and 2008. The aggregate
square footage of all of the Company's offices and warehouses is approximately
229,760 square feet.
 
    In order to secure its obligations under its revolving credit facility, the
Company has granted to its lenders a security interest on substantially all of
the Company's properties and other assets. See "Item 7. Management's Discussion
and Analysis of Financial Condition and Results of Operations-Liquidity and
Capital Resources."
 
ITEM 3. LEGAL PROCEEDINGS
 
    In the course of Condor's consolidation efforts, SCM LLC d/b/a The
Commonwealth Group ("Commonwealth"), the promoter of the Offering, and Condor
negotiated with Emtec, Inc. ("Emtec"), an IT service company based in
Pennsylvania, with a view to Emtec becoming one of the Founding Companies.
 
                                       10
<PAGE>
As part of the process, Emtec's investment banker and Commonwealth executed two
confidentiality agreements pursuant to which each agreed, among other things,
not to disclose certain confidential information and Commonwealth agreed that it
would not seek to enter into a business transaction with any companies to be
introduced to it by Emtec's investment banker for a period of two years without
such investment banker's prior written consent. On October 28, 1997, Emtec filed
a Complaint in the United States District Court for the Eastern District of
Pennsylvania against Condor, Commonwealth, J. Marshall Coleman, a Managing
Director of Commonwealth and the former Chairman of the Board of Condor, and
Kennard F. Hill, the Company's Chairman of the Board and Chief Executive
Officer, alleging breach of contract, tortious interference with Emtec's
business relationship with Corporate Access and CHMC, two of the Founding
Companies, and misappropriation of a trade secret arising out of the
participation of CHMC and Corporate Access in the consolidation and the Offering
without Emtec's written consent. In connection with the three causes of action,
Emtec demands that defendants disgorge the financial benefits that they have and
will obtain as a result of their breach of contract and seeks compensatory and
punitive damages. On December 31, 1997, the defendants filed an Answer, denying
the allegations and asserting various affirmative defenses. The court denied
Emtec's claim for unjust enrichment. A motion by Condor for partial summary
judgment was granted in part to eliminate Emtec's claim for misappropriation of
a trade secret. Trial of this matter could be scheduled in the near future. The
Company believes that Emtec's allegations are without merit and that, in any
event, the ultimate resolution of this action will not have a material adverse
effect on the Company's financial position or results of operations. The Company
has agreed to indemnify CHMC's directors, officers and stockholders against any
liability such persons may incur as a result of any claims brought by Emtec
against any of them that directly related to CHMC's participation as a Founding
Company. Commonwealth has agreed to indemnify the Company with regard to any
final judgment or settlement arising out of the above action or any similar
action. Commonwealth's obligations under such agreement have been guaranteed by
the three members of Commonwealth. The Company is a party to other legal
proceedings and disputes related to the Company's day to day business
operations, none of which are material to the financial position or results of
operations of the Company.
 
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
 
    During the fourth quarter of the year ended December 31, 1998, no matters
were submitted to a vote of the Company's security holders.
 
ITEM 4A. EXECUTIVE OFFICERS OF THE REGISTRANT
 
    The following table sets forth as of February 1, 1999, the names, ages and
other information concerning those persons who are executive officers of the
Company.
 
<TABLE>
<CAPTION>
NAME                                                       AGE                            POSITION
-----------------------------------------------------      ---      -----------------------------------------------------
<S>                                                    <C>          <C>
Kennard F. Hill......................................          58   Chairman of the Board and Chief Executive Officer
C. Lawrence Meador...................................          52   Vice Chairman of the Board
Daniel J. Roche......................................          37   President and Chief Operating Officer
William J. Caragol...................................          31   Vice President, Chief Financial Officer and Treasurer
John F. McCabe.......................................          54   Vice President, General Counsel and Secretary
Robert F. Hefner.....................................          52   General Manager, System Services Division
Michael G. Paglaiccetti..............................          53   General Manager, Desktop Services Division
</TABLE>
 
    Kennard F. Hill has been Chief Executive Officer and a director of the
Company since January 1997. Mr. Hill became Chairman of the Board of the Company
upon the closing of the Offering in February 1998. From January 1997 to February
1998, Mr. Hill also served as President of the Company. Mr. Hill was Group
President of I-NET, Inc., a network computing and systems integration services
company, from
 
                                       11
<PAGE>
September 1995 to December 1996. From June 1993 to June 1995, Mr. Hill was
President and Chief Executive Officer of Insource Technology, Inc., an IT
consulting firm. From June 1992 to June 1993, Mr. Hill was a private consultant
on client/server acquisition strategy in the healthcare industry. From 1988 to
July 1992, Mr. Hill was Chief Executive Officer of DataLine Inc., a data
processing and IT firm. From 1968 to 1988, Mr. Hill was employed by Electronic
Data Systems Corporation ("EDS"), a full-service IT provider. He served as
President of General Motors-EDS for North America from 1985 to 1988. At EDS, Mr.
Hill also served as chief of the Healthcare Division, having previously served
as its Director of Sales. Mr. Hill also was an officer of EDS's Federal Corp.
subsidiary and a director of its National Heritage Insurance Corp. subsidiary,
which provides healthcare underwriting for lower-income policyholders. In
December 1994, Mr. Hill filed a voluntary petition in bankruptcy in order to
discharge indebtedness arising out of his divorce and several partnerships in
which he was a limited partner. The bankruptcy was discharged in January 1996.
Mr. Hill attended the University of Texas and served two tours of duty as a
United States Army pilot in Vietnam.
 
    C. Lawrence Meador has been Vice Chairman of the Board of Directors of the
Company and Chief Executive Officer of MST since the closing of the Offering in
February 1998. Mr. Meador is the founder and was the President of MST, a
Founding Company, since 1992. From January 1996 to June 1998, Mr. Meador served,
under an MST contract, as the Chief Information Officer of CIGNA Property and
Casualty, an insurance company. All fees payable by CIGNA Property and Casualty
in connection with Mr. Meador's services as the Chief Information Officer of
CIGNA Property and Casualty are payable to MST. Mr. Meador has also been on the
academic staff of the Massachusetts Institute of Technology for over 20 years,
during which period he was a consultant to numerous international Fortune 1000
companies, governmental bodies and other organizations. From 1974 to 1992, Mr.
Meador was the Founder, President and Chief Executive Officer of Decision
Support Technology, Inc., a firm established to commercialize MIT research on
Decision Support Systems. From 1985 to 1987 he served as a Co-Founder, Director
and Vice Chairman of Software Productivity Research, Inc. Mr. Meador received a
bachelor of science degree from the University of Texas and masters degrees in
management and mechanical engineering from the Massachusetts Institute of
Technology.
 
    Daniel J. Roche has been Chief Operating Officer of the Company since
October 1997. He became President of the Company upon the closing of the
Offering in February 1998. Mr. Roche previously served as the Chief Operating
Officer and Executive Vice President of BSG, an IT service division of Medaphis
Corp. that focuses on client/server and network technologies. From 1991 to May
1996, Mr. Roche was the Founder, President and Chief Executive Officer of Rapid
Systems Solutions, Inc. ("RSSI"), a provider of client/server applications with
competencies in database management systems, networking, communications and
graphical user interfaces, which Mr. Roche founded and which Medaphis Corp.
acquired in May 1996. From 1988 to 1993, Mr. Roche was an adjunct professor at
the University of Maryland, Baltimore County. From 1985 to 1990, Mr. Roche held
several positions at Booz-Allen & Hamilton. Mr. Roche received a bachelor of
science degree in computer science from Central Michigan University, a masters
degree in computer science from The Johns Hopkins University and completed the
Owners and Presidents Management Program at the Harvard Graduate Business
School.
 
    William J. Caragol was appointed Vice President and Chief Financial Officer
in March 1998. Prior to that he was Vice President-Finance of the Company since
October 1997. Prior to joining the Company, he was a Senior Manager in the High
Technology Service Group of Deloitte & Touche LLP, which he joined in 1989. As a
member of the High Technology Service Group, Mr. Caragol provided comprehensive
accounting services to publicly-held U.S. corporations in the technology sector.
Mr. Caragol is a Certified Public Accountant and a member of the American
Institute of Certified Public Accountants. He received a bachelor of science
degree in accounting and business administration from Washington & Lee
University.
 
    John F. McCabe was appointed Vice President, General Counsel and Secretary
in June 1998. In this function, Mr. McCabe is focused on the Company's
acquisition program directed at information technology services companies,
corporate strategic planning, and day-to-day legal matters. He is also an
advisor on
 
                                       12
<PAGE>
corporate infrastructure development. From 1989 to 1998, Mr. McCabe was
Corporate Vice President, General Counsel and Secretary of BDM International,
Inc., a Fortune 1000 information technology company, where he headed the
company's legal department. Mr. McCabe received a masters degree in business
administration from the Kellogg Graduate School of Management at Northwestern
University and a juris doctor degree from Fordham University Law School.
 
    Robert F. Hefner was appointed as the General Manager of the Company's
System Services Division in October, 1998. Concurrently he serves as the
President of LINC Systems Corporation as he has done since September 1992. In
that capacity, Mr. Hefner specializes in distributed client/server computing and
relational database systems integration, custom application development, and
infrastructure architecture. Prior to his work with LINC, he held positions with
Source Services, EDS and Digital. Mr. Hefner is a graduate of the University of
Rhode Island with a major in Finance and Insurance. He served in the United
States Marine Corps with a tour of duty in Vietnam and attained the rank of
Captain.
 
    Michael G. Paglaiccetti was appointed as the General Manager of the Desktop
Services Division in August, 1998. Concurrently he serves as the President of
Computer Hardware Maintenance Company, Inc. as he has done since 1988. Before
becoming President of CHMC, Mr. Paglaiccetti served as Vice President for eight
years. His experience in the information technology industry includes several
years as the regional manager for Control Data Corporation, focusing on
mainframe services. He also spent seven years with IBM Corporation as a custom
engineer.
 
                                       13
<PAGE>
                                    PART II
 
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
 
(A) MARKET INFORMATION
 
    The Company's Common Stock trades on the Nasdaq National Market under the
symbol "CNDR." The Company completed its initial public offering of its Common
Stock in February 1998 at a price of $13.00 per share. The following table sets
forth, for the periods indicated, the range of high and low last reported sale
prices for the Common Stock.
 
<TABLE>
<S>                                                                  <C>        <C>
From February 5, 1998 through March 31, 1998.......................      15.56      13.00(1)
From April 1, 1998 through June 30, 1998...........................      17.75      13.00
From July 1, 1998 through September 30, 1998.......................      14.63       8.50
From October 1, 1998 through December 31, 1998.....................      13.75       9.00
</TABLE>
 
------------------------
 
(1) Represents the initial public offering price.
 
    HOLDERS  On March 12, 1999, the last reported sale price of the Common Stock
on the Nasdaq National Market was $9.88 per share. At March 12, 1999, there were
80 holders of record of the Company's Common Stock, although the Company
believes the number of beneficial holders is substantially greater.
 
    DIVIDENDS  The Company does not anticipate paying any cash dividends on its
Common Stock in the foreseeable future and intends to retain its earnings, if
any, to finance the expansion of its business and for general corporate
purposes. Any payment of future dividends will be at the discretion of the Board
of Directors and will depend upon, among other things, the Company's earnings,
financial position, capital requirements, level of indebtedness, contractual
restrictions and other factors that the Company's Board of Directors deems
relevant. In addition, the Company's revolving credit facility prohibits the
payment of dividends by the Company without the lender's consent.
 
(B) SALES OF REGISTERED AND UNREGISTERED SECURITIES
 
    On February 5, 1998, the Company registered, offered and sold 5,900,000
shares of Common Stock through an initial public offering. On March 1, 1998, the
underwriters of the initial public offering exercised an overallotment option to
purchase 885,000 registered shares. Net proceeds to the Company for both of
these transactions were approximately $72.9 million after deducting underwriter
commissions and other offering costs. On February 10, 1998, the Company issued
2,307,693 unregistered shares to purchase the Founding Companies.
 
    Effective June 4, 1998, the Company registered an additional 5,000,000
shares of common stock with the Securities and Exchange Commission on Form S-1,
which may be offered and issued from time to time in connection with the merger
with or acquisition by the Company of other businesses or assets.
 
    During 1998, the Company issued 9,600 unregistered shares and 1,028,186
registered shares in connection with the purchase of four Other Acquisitions.
 
                                       14
<PAGE>
ITEM 6. SELECTED FINANCIAL DATA
 
    The financial information set forth below is qualified by reference to the
consolidated financial statements and notes thereto included in "Item 8".
<TABLE>
<CAPTION>
                                                                              YEARS ENDED
                                                                             DECEMBER 31,
                                                                         ---------------------
<S>                                                                      <C>        <C>
                                                                           1997        1998
                                                                         ---------  ----------
 
<CAPTION>
                                                                         (IN THOUSANDS, EXCEPT
                                                                            PER SHARE DATA)
<S>                                                                      <C>        <C>
STATEMENT OF OPERATIONS DATA:
  Revenues.............................................................  $  --      $  168,833
  Gross profit.........................................................     --          54,321
  Income from operations...............................................     (2,715)     11,724
  Net income (loss)....................................................  $  (2,715) $    5,533
 
  Net income (loss) per basic share....................................  $   (1.62) $     0.54
  Net income (loss) per diluted share..................................  $   (1.62) $     0.51
  Shares used in computing basic net income (loss) per share...........      1,680      10,193
  Shares used in computing diluted net income (loss) per share.........      1,680      10,767
</TABLE>
<TABLE>
<CAPTION>
                                                                              DECEMBER 31,
                                                                          ---------------------
<S>                                                                       <C>        <C>
                                                                            1997        1998
                                                                          ---------  ----------
 
<CAPTION>
                                                                             (IN THOUSANDS)
<S>                                                                       <C>        <C>
BALANCE SHEET DATA:
Cash and cash equivalents...............................................  $      26  $    3,053
Accounts Receivable, net................................................     --          39,814
Goodwill and other intangibles, net.....................................     --         145,163
Total assets............................................................      4,926     200,642
Long-term debt, net of current maturities...............................     --          24,296
Stockholders' equity (deficit)..........................................  $    (255) $  114,042
</TABLE>
 
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
  OF OPERATIONS
 
    The following discussion should be read in conjunction with "Item 6.
Selected Financial Data" and "Item 8. Financial Statements and Supplementary
Data." A number of statements in this Annual Report on Form 10-K address
activities, events or developments which the Company anticipates may occur in
the future, including such matters as the Company's strategy for internal
growth, additional capital expenditures (including the amount and nature
thereof), acquisitions of assets and businesses, industry trends and other such
matters. These statements are based on certain assumptions and analyses made by
the Company in light of its perception of historical trends, current business
and economic conditions and expected future developments, as well as other
factors the Company believes are reasonable or appropriate. However, whether
actual results and developments will conform with the Company's expectations and
predictions is subject to a number of risks and uncertainties, including:
general economic, market or business conditions; the business opportunities (or
lack thereof) that may be presented to and pursued by the Company; changes in
laws or regulations; and other factors, many of which are beyond the control of
the Company. Consequently, there can be no assurance that the actual results or
developments anticipated by the Company will be realized or, even if
substantially realized, that they will have the expected consequences to or
effects on the Company or its business or operations.
 
INTRODUCTION
 
    The Company earns revenues from the provision of IT services and hardware
procurement. The Company recognizes IT service revenues using formulas based on
time and materials, whereby revenues
 
                                       15
<PAGE>
are recognized as costs are incurred at agreed-upon billing rates. For projects
billed on a fixed-price basis, revenue is recognized using the percentage of
completion method. Percentage of completion is determined using total costs as a
cost input measure. Revenues from license fees on proprietary software are
recognized when a non-cancelable license agreement has been signed, the product
has been delivered, collection is probable and all significant obligations
relating to the license have been satisfied. There are no significant post-sales
support obligations related to the Company's license fees. Revenues from
hardware procurement are recognized upon shipment or acceptance of the
equipment. When installation services are an integral component of the hardware
procurement, revenue is recognized at the customer's acceptance of the
equipment.
 
    Cost of revenues includes the provision of services and material directly
related to the revenues, costs of acquisition of hardware resold to clients,
subcontracted labor or other outside services and other direct costs associated
with revenues, as well as an allocation of certain indirect costs.
 
    Selling, general and administrative costs include salaries, benefits,
commissions payable to the Company's sales and marketing personnel, recruiting,
finance and other general and administrative costs.
 
    In July 1996, the Securities and Exchange Commission issued Staff Accounting
Bulletin No. 97 ("SAB 97") relating to business combinations immediately prior
to an initial public offering. SAB 97 requires that these combinations be
accounted for using the purchase method of acquisition accounting. Condor was
identified as the "accounting acquiror" for financial statement presentation
purposes.
 
RESULTS OF OPERATIONS
 
    The Company's consolidated financial statements have been prepared based on
accounting for all companies acquired during 1998 using the purchase method of
acquisition accounting. All operating companies that previously used fiscal year
financial reporting basis have converted to a calendar year financial reporting
basis and because all individual operating companies are now included in the
consolidated tax return of Condor, all have converted their tax status to be
taxed under subchapter C of the Internal Revenue Code of 1986, as amended. The
financial statements include operations of the operating companies from their
respective dates of acquisition.
 
    The following table sets forth certain selected financial data for the
Company on a historical basis and as a percentage of revenues for the years
ended December 31, (in thousands, except percentages):
 
<TABLE>
<CAPTION>
                                                                     1997                  1998
                                                             --------------------  ---------------------
<S>                                                          <C>        <C>        <C>         <C>
IT Service revenues........................................  $      --         --% $   92,515       54.8%
Hardware procurement revenues..............................         --         --      76,318       45.2
                                                             ---------  ---------  ----------  ---------
Total revenues.............................................         --         --     168,833      100.0
                                                             ---------  ---------  ----------  ---------
 
Cost of IT services........................................         --         --      45,379       49.1
Cost of hardware procurement...............................         --         --      69,133       90.6
                                                             ---------  ---------  ----------  ---------
Total cost of revenues.....................................         --         --     114,512       67.8
                                                             ---------  ---------  ----------  ---------
 
Gross profit...............................................         --         --      54,321       32.2
 
Selling, general and administrative........................      2,715         --      32,920       19.5
Depreciation and amortization..............................         --         --       4,677        2.8
In process research and development........................         --         --       5,000        3.0
                                                             ---------  ---------  ----------  ---------
Income from operations.....................................  $  (2,715)        --% $   11,724        6.9%
                                                             ---------  ---------  ----------  ---------
                                                             ---------  ---------  ----------  ---------
</TABLE>
 
    REVENUES.  For the year ended December 31, 1998, the Company's revenues
include the revenues of the Founding Companies from February 1, 1998 through
December 31, 1998 and the revenues of DST,
 
                                       16
<PAGE>
Louden, LINC, PowerCrew, and Global from their respective acquisition dates of
May 5, 1998, June 30, 1998, July 17, 1998, November 4, 1998 and December 10,
1998. Revenues from IT services for the year were approximately 55% of total
revenues. No single customer accounts for more than 10% of the Company's
consolidated revenues.
 
    IT service revenue as a percentage of total revenue has increased throughout
1998 through growth in each of the Company's divisions. Consulting Services
revenue is attributable to strategic IT planning and management consulting;
decision support consulting; and interactive media services. System Services
revenue is attributable to custom development, integration and installation of
IT systems; enterprise resource planning ("ERP") package implementation and
consulting; contract staffing and recruiting; training and continuing education;
and sales of the Company's Safari InfoTOOLS software licenses. Desktop services
revenue is attributable to call center and help-desk services and systems and
mainframe maintenance and support.
 
    Hardware procurement revenue as a percentage of total revenue has decreased
throughout 1998 primarily due to a shift in the Company's focus toward higher
margin IT service revenues.
 
    COST OF REVENUES.  Cost of revenues was $114.5 million, or approximately 68%
of sales for the year ended December 31 1998. The Company generates higher gross
margins from its System and Consulting Services Divisions while the procurement
component of its Desktop Service Division generates its lowest margins.
 
    SELLING, GENERAL AND ADMINISTRATIVE EXPENSES.  Selling, general and
administrative expenses were $32.9 million in 1998, which consist of salaries,
benefits and commissions payable to the Company's sales and marketing personnel,
recruiting, finance costs and other general and administrative costs. Expenses
incurred in 1997 represent payment of salary to one officer of the Company and
facilities and general and administrative costs.
 
    DEPRECIATION AND AMORTIZATION.  Depreciation and amortization includes the
depreciation of property and equipment, the amortization of goodwill and other
intangibles from the purchase of the operating companies, internally developed
software costs, and the technology license recorded in connection with a service
contract.
 
LIQUIDITY AND CAPITAL RESOURCES
 
    Condor is a holding company that conducts its operations though its
subsidiaries. Accordingly, Condor's principal sources of liquidity are the cash
flows of its operating companies and cash available from its credit facilities.
At December 31, 1998 the Company had $3.1 million in cash and cash equivalents
and $24.7 million of indebtedness outstanding, which consists primarily of
borrowings on its $50 million revolving credit facility (the "Revolver"). The
Company is in the process of arranging a new, larger bank facility to give it
additional funding to pursue acquisition opportunities. There can be no
assurance that the Company will be successful in obtaining such a new, larger
facility.
 
    Net cash provided by operating activities was $5.6 million for the year
ended December 31, 1998. Net cash used in investing activities was $93.7 million
for the year ended December 31, 1998 which included $90.2 million, net of cash
acquired, for the acquisition of the operating companies.
 
    Net cash provided by financing activities was $93.9 million for the year
ended December 31, 1998 and included $72.9 million from the Company's Offering,
net of costs, and borrowings of $21.0 million, net of repayments and direct
costs incurred in obtaining financing.
 
    The Company intends to continue to pursue acquisition opportunities. The
timing, size or success of any acquisition effort and the associated potential
capital commitments are unpredictable. The Company expects to fund future
acquisitions primarily through a combination of cash flow from operations and
 
                                       17
<PAGE>
borrowings, including borrowings under the Revolver, as well as issuances of
additional shares of Common Stock.
 
    The Company believes that its cash flow from operations and borrowings under
its credit facilities will be sufficient to fund its cash flow requirements for
at least the next 12 months. To the extent that the Company is successful in
consummating acquisitions, it may be necessary to finance such acquisitions
through the issuance of additional equity securities, incurrence of indebtedness
or both.
 
SEASONALITY AND CYCLICALITY; POTENTIAL FLUCTUATIONS IN QUARTERLY OPERATING
  RESULTS
 
    The Company has experienced and expects to continue to experience
variability in revenues and net income from quarter to quarter as a result of
seasonality that may accompany private or public sector budget cycles. Sales of
the Company's IT products and related services have historically been higher in
the third and fourth calendar quarters as a result of patterns of capital
spending by some clients, principally federal, state and local governments.
 
    The Company also believes that the IT industry is influenced by general
economic conditions and particularly by the level of technological change.
Increased levels of technological change can have a favorable impact on the
Company's revenues. In general, technological change drives the need for
hardware procurement and information systems services provided by the Company.
The Company also believes that the industry tends to experience periods of
decline and recession during economic downturns. The industry could experience
sustained periods of decline in revenues in the future, and any such decline may
have a material adverse effect on the Company.
 
    The Company could in the future experience quarterly fluctuations in
operating results due to the factors discussed above and other factors,
including the short-term nature of certain client commitments; patterns of
capital spending by clients; loss of a major client; seasonality that may
accompany private or governmental sector budget cycles; the timing, size and mix
of service and product offerings; the timing and size of significant software
sales; the timing and size of new projects; the timing and magnitude of required
capital expenditures; pricing changes in response to various competitive
factors; market factors affecting the availability of qualified technical
personnel; timing and client acceptance of new service offerings; changes in the
trends affecting the outsourcing of IT services; additional selling, general and
administrative expenses to acquire and support new business; increased levels of
technological change in the industry; and general economic conditions. The
Company plans its operating expenditures based on revenue forecasts, and a
revenue shortfall below such forecasts in any quarter would likely adversely
affect the Company's operating results for that quarter.
 
INFLATION
 
    The Company believes the effects of inflation generally do not have a
material impact on its operations or financial position or cash flows.
 
YEAR 2000 READINESS
 
    IMPACT OF THE YEAR 2000 ISSUE.  The Year 2000 issue is the result of
computer programs being written using two digits rather than four to define the
applicable year. Any of a company's computer programs or hardware that have
date-sensitive software or embedded chips may recognize a date using "00" as the
year 1900 rather than the year 2000. This could result in a system failure or
miscalculations causing disruptions of operations, including, among other
things, a temporary inability to process transactions, send invoices, or engage
in similar normal business activities.
 
    Based on recent assessments, the Company determined that it will be required
to modify or replace portions of hardware and software so that those systems
will properly utilize dates beyond December 31, 1999. The Company presently
believes that with modifications and replacement of some of the existing
 
                                       18
<PAGE>
hardware and software, the Year 2000 issue can be mitigated. However, if such
modifications and replacements are not made, or are not completed timely, the
Year 2000 issue could have a small to moderate impact on operations. The Company
is currently compiling a formal Year 2000 contingency plan which is expected to
be completed by July 1999.
 
    The Company's plan to resolve its Year 2000 issues involves four phases:
assessment, remediation, testing, and implementation.
 
    ASSESSMENT.  The Company has fully completed its assessment of all material
systems and Company products that could be affected by the Year 2000 issue. The
completed assessment indicated that a portion of the Company's information
technology systems could be affected. That assessment also indicated that the
current accounting system is at risk of not being Year 2000 compliant. If not
resolved on a timely basis, this could affect the Company's ability to provide
adequate and timely billing information.
 
    REMEDIATION.  The Company estimates that it is 80% complete in the
remediation phase of all material systems and expects to complete corporate
remediation by April 1999. After completing remediation, the Company's plans
include testing and implementing its information technology systems.
 
    TESTING AND IMPLEMENTATION.  The Company estimates that it has completed 80%
of its testing and implementation of its remediated systems. Completion of the
testing phase is expected by May 1999 with all remediated systems fully
implemented by July 1999. In certain cases, the remedy is a replacement of the
system or software. For example, the Company plans to install an ERP accounting
and management information system in 1999 which will be Year 2000 compliant.
 
    THIRD PARTIES.  With respect to third parties, the Company has completed its
remediation and estimates it is 80% complete with the testing phase of systems
that interface directly with significant vendors. Testing of all material
systems is expected to be completed no later than April 1999. Implementation is
also 80% complete and is expected to be completed by July 1999.
 
    The Company is in the process of surveying its significant suppliers that do
not involve system interface. The Company has no means of ensuring that these
suppliers will be Year 2000 ready, and the inability of those parties to
complete the Year 2000 resolution process could materially impact the Company.
The effect of non-compliance by third parties, where some system interface
exists, is not determinable. The Company is not aware of any problems with third
parties that would materially impact results of operations, liquidity, or
capital resources. To the extent that certain licensed products proprietary to
the company are non-compliant, the Company is offering to provide upgrades to
its customers.
 
    COST.  The Company will utilize both internal and external resources to
update or replace, test, and implement the affected information technology
systems for Year 2000 modifications. The total cost of the Year 2000 project is
estimated at $1.6 million and is being funded through operating cash flows.
Expenditures to date have related to all phases of the Year 2000 project. As of
December 31, 1998, the cost incurred to date was approximately $500,000 which
related to hardware purchases and replacement. Remaining costs relate to the
purchase of new software and operating equipment and the acquisition of external
resources to complete implementation of new systems.
 
    The Company's plans to complete the Year 2000 modifications are based on
management's best estimates, which were derived utilizing numerous assumptions
of future events including the continued availability of certain resources and
other factors. Estimates of the status of completion and the expected completion
dates are based on costs incurred to date compared to total expected costs.
However, there can be no guarantee that these estimates will be achieved and
actual results could differ materially from those plans. Special factors that
might cause such material differences include, but are not limited to, the
availability and cost of personnel trained in this area, the ability to locate
and correct all relevant computer codes, and similar uncertainties.
 
                                       19
<PAGE>
NEW ACCOUNTING PRONOUNCEMENTS
 
    DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES.  In June 1998, the Financial
Accounting Standards Board issued Statement of Financial Accounting Standards
No. 133, "Accounting for Derivative Instruments and for Hedging Activities"
("SFAS No. 133"). SFAS No. 133 requires all derivatives to be recorded on the
balance sheet at fair value and establishes "special accounting" for the
following three different types of hedges: hedges of changes in the fair value
of assets, liabilities or firm commitments; hedges of the variable cash flows of
forecasted transactions; and hedges of foreign currency exposures of net
investments in foreign operations. SFAS No. 133 is effective for years beginning
after June 15, 1999, with earlier adoption permitted. The Company believes that
the effect of adoption of SFAS No. 133 will not be material to its financial
position or results of operations.
 
SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS
 
    Statements in this Form 10-K based on current expectations that are not
strictly historical statements, such as the Company's or management's
intentions, hopes, beliefs, expectations, strategies, or predictions, are
forward-looking statements. Such statements, or any other variation thereof
regarding the Company's future activities or other future events or conditions
within the meaning of Section 27A of the Securities Act and Section 21E of the
Securities Exchange Act of 1934, as amended, are intended to be covered by the
safe harbors for forward-looking statements created thereby. Investors are
cautioned that all forward-looking statements involve risks and uncertainty,
including without limitation, the sufficiency of the Company's working capital
and the ability of the Company to realize benefits from consolidating certain
general and administrative functions, to pursue strategic acquisitions and
alliances, to retain management and to implement its focused business strategy,
to leverage consulting services, secure full-service contracts, to expand client
relationships, successfully recruit, train and retain personnel, expand services
and geographic reach and successfully defend itself in ongoing and future
litigation.
 
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
 
    Not Applicable.
 
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
 
                       CONDOR TECHNOLOGY SOLUTIONS, INC.
                         INDEX TO FINANCIAL STATEMENTS
 
<TABLE>
<CAPTION>
                                                                                                                PAGE
                                                                                                                -----
<S>                                                                                                          <C>
CONDOR TECHNOLOGY SOLUTIONS, INC. CONSOLIDATED FINANCIAL STATEMENTS
  Report of Independent Accountants........................................................................          21
  Consolidated Balance Sheets..............................................................................          22
  Consolidated Statements of Operations....................................................................          23
  Consolidated Statement of Changes in Stockholders' Equity (Deficit)......................................          24
  Consolidated Statements of Cash Flows....................................................................          25
  Notes to Consolidated Financial Statements...............................................................          26
 
CONDOR TECHNOLOGY SOLUTIONS, INC. FINANCIAL STATEMENT SCHEDULES
  II.  Valuation and Qualifying Accounts (All other schedules are omitted because they are
      not applicable or the required information is shown in the financial statements or notes thereto.)...          42
</TABLE>
 
                                       20
<PAGE>
                       REPORT OF INDEPENDENT ACCOUNTANTS
 
To the Board of Directors and Stockholders of
Condor Technology Solutions, Inc.
 
    In our opinion, the accompanying consolidated balance sheets and the related
consolidated statements of operations, of changes in stockholders' equity
(deficit) and of cash flows present fairly, in all material respects, the
financial position of Condor Technology Solutions, Inc. and its subsidiaries at
December 31, 1997 and 1998, and the results of their operations and their cash
flows for each of the two years in the period ended December 31, 1998, in
conformity with generally accepted accounting principles. These financial
statements are the responsibility of the Company's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these statements in accordance with
generally accepted auditing standards which require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for the opinion expressed
above.
 
PricewaterhouseCoopers LLP
 
McLean, VA
February 5, 1999
 
                                       21
<PAGE>
                       CONDOR TECHNOLOGY SOLUTIONS, INC.
 
                          CONSOLIDATED BALANCE SHEETS
 
                       (IN THOUSANDS, EXCEPT SHARE DATA)
 
<TABLE>
<CAPTION>
                                                                                                 DECEMBER 31,
                                                                                             ---------------------
<S>                                                                                          <C>        <C>
                                                                                               1997        1998
                                                                                             ---------  ----------
                                                ASSETS
CURRENT ASSETS:
  Cash and cash equivalents................................................................  $      26  $    3,053
  Restricted cash..........................................................................         --       2,756
  Accounts receivable, net.................................................................         --      39,814
  Prepaids and other current assets........................................................         --       3,284
  Deferred offering costs..................................................................      4,900          --
                                                                                             ---------  ----------
      Total current assets.................................................................      4,926      48,907
PROPERTY AND EQUIPMENT, NET................................................................         --       4,329
GOODWILL AND OTHER INTANGIBLES, NET........................................................         --     145,163
OTHER ASSETS...............................................................................         --       2,243
                                                                                             ---------  ----------
      TOTAL ASSETS.........................................................................  $   4,926  $  200,642
                                                                                             ---------  ----------
                                                                                             ---------  ----------
                            LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES:
  Accounts payable.........................................................................  $      --  $   13,838
  Accrued expenses and other current liabilities...........................................      2,689      16,524
  Amounts due to stockholder...............................................................      2,492          --
  Deferred revenue.........................................................................         --       4,915
  Current portion of contingent purchase liability.........................................         --       4,308
  Current portion of long-term debt........................................................         --         442
                                                                                             ---------  ----------
      Total current liabilities............................................................      5,181      40,027
LONG-TERM DEBT.............................................................................         --      24,296
NON-CURRENT CONTINGENT PURCHASE LIABILITY..................................................         --      20,348
OTHER LONG-TERM OBLIGATIONS................................................................         --       1,929
                                                                                             ---------  ----------
      Total liabilities....................................................................      5,181      86,600
COMMITMENTS AND CONTINGENCIES (Note 18)....................................................         --          --
 
STOCKHOLDERS' EQUITY (DEFICIT):
  Preferred stock, $.01 par, 1,000,000 authorized; none outstanding........................         --          --
  Common stock, $.01 par value; authorized 49,000,000 shares; issued and outstanding,
    1,892,307 and 12,009,608 shares at December 31, 1997 and 1998, respectively............         19         120
  Additional paid-in capital...............................................................      2,441     111,278
  Retained earnings (accumulated deficit)..................................................     (2,715)      2,818
  Accumulated other comprehensive income...................................................         --          20
  Treasury stock, at cost (13,178 shares at December 31, 1998).............................         --        (194)
                                                                                             ---------  ----------
  Total stockholders' equity (deficit).....................................................       (255)    114,042
                                                                                             ---------  ----------
      TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT).................................  $   4,926  $  200,642
                                                                                             ---------  ----------
                                                                                             ---------  ----------
</TABLE>
 
  The accompanying notes are an integral part of these consolidated financial
                                  statements.
 
                                       22
<PAGE>
                       CONDOR TECHNOLOGY SOLUTIONS, INC.
 
                     CONSOLIDATED STATEMENTS OF OPERATIONS
 
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)
 
<TABLE>
<CAPTION>
                                                                                                  YEARS ENDED
                                                                                                 DECEMBER 31,
                                                                                             ---------------------
<S>                                                                                          <C>        <C>
                                                                                               1997        1998
                                                                                             ---------  ----------
IT service revenues........................................................................  $      --  $   92,515
Hardware procurement revenues..............................................................         --      76,318
                                                                                             ---------  ----------
Total revenues.............................................................................         --     168,833
                                                                                             ---------  ----------
 
Cost of IT services........................................................................         --      45,379
Cost of hardware procurement...............................................................         --      69,133
                                                                                             ---------  ----------
Total cost of revenues.....................................................................         --     114,512
                                                                                             ---------  ----------
 
Gross profit...............................................................................         --      54,321
 
Selling, general and administrative expenses...............................................      2,715      32,920
Depreciation and amortization..............................................................         --       4,677
In process research and development........................................................         --       5,000
                                                                                             ---------  ----------
 
Income (loss) from operations..............................................................     (2,715)     11,724
Interest and other income, net.............................................................         --         684
                                                                                             ---------  ----------
 
Income (loss) before income taxes..........................................................     (2,715)     12,408
Provision for income taxes.................................................................         --       6,875
                                                                                             ---------  ----------
 
Net income (loss)..........................................................................  $  (2,715) $    5,533
                                                                                             ---------  ----------
                                                                                             ---------  ----------
 
Net income (loss) per basic share..........................................................  $   (1.62) $     0.54
                                                                                             ---------  ----------
                                                                                             ---------  ----------
Net income (loss) per diluted share........................................................  $   (1.62) $     0.51
                                                                                             ---------  ----------
                                                                                             ---------  ----------
 
Basic shares outstanding...................................................................      1,680      10,193
                                                                                             ---------  ----------
                                                                                             ---------  ----------
Diluted shares outstanding.................................................................      1,680      10,767
                                                                                             ---------  ----------
                                                                                             ---------  ----------
</TABLE>
 
  The accompanying notes are an integral part of these consolidated financial
                                  statements.
 
                                       23
<PAGE>
                       CONDOR TECHNOLOGY SOLUTIONS, INC.
 
                           CONSOLIDATED STATEMENT OF
 
                   CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
 
                       (IN THOUSANDS, EXCEPT SHARE DATA)
 
<TABLE>
<CAPTION>
                                                                              RETAINED
                                             COMMON STOCK      ADDITIONAL     EARNINGS     CUMULATIVE               STOCKHOLDERS'
                                          ------------------    PAID-IN     (ACCUMULATED   TRANSLATION   TREASURY      EQUITY
                                            SHARES    AMOUNT    CAPITAL       DEFICIT)     ADJUSTMENT(1)  STOCK       (DEFICIT)
                                          ----------  ------   ----------   ------------   -----------   --------   -------------
<S>                                       <C>         <C>      <C>          <C>            <C>           <C>        <C>
BALANCE, DECEMBER 31, 1996..............   1,413,806   $ 14     $      73      $   --          $--        $  --       $     87
 
Issuance of common stock................     478,501      5         2,368          --           --           --          2,373
Net loss................................          --     --            --      (2,715)          --           --         (2,715)
                                          ----------  ------   ----------      ------          ---       --------   -------------
BALANCE, DECEMBER 31, 1997..............   1,892,307     19         2,441      (2,715)          --           --           (255)
 
Issuance of common stock in initial
  public offering, net of offering
  costs.................................   6,785,000     68        72,845          --           --           --         72,913
Issuance of common stock for
  acquisitions..........................   3,345,479     33        35,917          --           --           --         35,950
Purchase of treasury stock..............     (13,178)    --            --          --           --         (194)          (194)
Comprehensive income:
  Net income............................          --     --            --       5,533           --           --
  Foreign currency translation
      adjustment........................          --     --            --          --           20           --
Total comprehensive income..............                                                                                 5,553
Other...................................          --     --            75          --           --           --             75
                                          ----------  ------   ----------      ------          ---       --------   -------------
BALANCE, DECEMBER 31, 1998..............  12,009,608   $120     $ 111,278      $2,818          $20        $(194)      $114,042
                                          ----------  ------   ----------      ------          ---       --------   -------------
                                          ----------  ------   ----------      ------          ---       --------   -------------
</TABLE>
 
------------------------
 
(1)   Accumulated Other Comprehensive Income
 
  The accompanying notes are an integral part of these consolidated financial
                                  statements.
 
                                       24
<PAGE>
                       CONDOR TECHNOLOGY SOLUTIONS, INC.
 
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
 
                                 (IN THOUSANDS)
 
<TABLE>
<CAPTION>
                                                                                                   YEARS ENDED
                                                                                                   DECEMBER 31,
                                                                                               --------------------
<S>                                                                                            <C>        <C>
                                                                                                 1997       1998
                                                                                               ---------  ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net (loss) income..........................................................................  $  (2,715) $   5,533
  Adjustments to reconcile net (loss) income to net cash (used in) provided by operating
    activities:
    Depreciation and amortization............................................................         --      4,677
    In process research and development......................................................         --      5,000
    Stock compensation expense...............................................................      1,771         --
    Change in valuation allowance............................................................         --      1,032
    Changes in assets and liabilities:
      Accounts receivable....................................................................         --      2,846
      Prepaid expenses and other assets......................................................     (4,183)      (286)
      Accounts payable and other current liabilities.........................................      5,003    (12,541)
      Deferred revenue.......................................................................         --       (803)
    Other....................................................................................         --        102
                                                                                               ---------  ---------
        Net cash (used in) provided by operating activities..................................       (124)     5,560
 
CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchase of property and equipment.........................................................         --     (2,806)
  Purchase of marketable securities..........................................................         --    (36,726)
  Sale of marketable securities..............................................................         --     37,924
  Acquisition of subsidiaries, net of cash...................................................         --    (90,168)
  Payment for technology license.............................................................         --     (1,550)
  Other......................................................................................         --       (338)
                                                                                               ---------  ---------
        Net cash used in investing activities................................................         --    (93,664)
 
CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from loans........................................................................         --     34,000
  Payments on long--term debt................................................................         --    (12,852)
  Proceeds from initial public offering, net of costs........................................         --     72,913
  Proceeds from issuance of common stock.....................................................        150         --
  Purchase of treasury shares................................................................         --       (194)
                                                                                               ---------  ---------
        Net cash provided by financing activities............................................        150     93,867
 
EFFECT OF EXCHANGE RATE CHANGES..............................................................         --         20
                                                                                               ---------  ---------
NET INCREASE IN CASH AND CASH EQUIVALENTS....................................................         26      5,783
 
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD...............................................         --         26
                                                                                               ---------  ---------
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD.................................  $      26  $   5,809
                                                                                               ---------  ---------
                                                                                               ---------  ---------
</TABLE>
 
  The accompanying notes are an integral part of these consolidated financial
                                  statements.
 
                                       25
<PAGE>
                        CONDOR TECHNOLOGY SOLUTIONS INC.
 
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 
1. GENERAL
 
    Condor Technology Solutions, Inc., a Delaware corporation ("Condor" or the
"Company"), was founded in August 1996 to create a leading single-source
information technology ("IT") service company to provide strategic IT business
solutions to middle market organizations, Fortune 1000 companies and public
sector organizations. In order to become a single-source provider of a wide
range of IT services and solutions, Condor entered into agreements (the
"Mergers") to acquire all of the common stock of eight established IT service
providers (the "Founding Companies") and concurrently completed an initial
public offering (the "Offering") of its common stock (the "Common Stock"). On
February 5, 1998 and February 10, 1998, respectively, the Offering and the
Mergers were completed. As of December 31, 1998, the Company had acquired five
additional IT service providers. All acquisitions are reflected as of their
respective acquisition dates. The Founding Companies along with the newly
acquired companies are referred to herein as "operating companies". The Company
intends to continue to pursue strategic acquisitions as a means to continually
expand the breadth of IT services it provides.
 
    For financial statement purposes, Condor has been identified as the
accounting acquiror. Accordingly, the financial statements as of December 31,
1997 include the results of Condor prior to the Offering and the Mergers. The
Mergers and subsequent acquisitions were accounted for using the purchase method
of accounting (see Note 3).
 
    Prior to the Offering, the Company did not conduct any significant
operations, other than payment of salary to an officer and certain facility and
general and administrative costs. The Company's cash balances were provided from
the sale of stock to investors and advances from a founding stockholder.
 
2. SIGNIFICANT ACCOUNTING POLICIES
 
    BASIS OF ACCOUNTING--The Company's accounting records are maintained on the
accrual basis of accounting.
 
    PRINCIPLES OF CONSOLIDATION--The consolidated financial statements include
the accounts of Condor and its wholly-owned subsidiaries. All significant
intercompany transactions and balances have been eliminated in consolidation.
 
    REVENUE RECOGNITION--The Company earns revenues from the provision of IT
services and hardware procurement.
 
    IT services are comprised of strategic IT planning and management
consulting; decision support consulting; interactive media services; custom
development, integration and installation of IT systems; enterprise resource
planning ("ERP") package implementation and consulting; contract staffing and
recruiting; training and continuing education; sale of proprietary and
third-party software; call center and help-desk services; and systems and
mainframe maintenance and support. The Company recognizes IT service revenues
using formulas based on time and materials, whereby revenues are recognized as
costs are incurred at agreed-upon billing rates. For projects billed on a
fixed-price basis, revenue is recognized using the percentage of completion
method. Percentage of completion is determined using total costs as a cost input
measure. Revenues from license fees on proprietary and third-party software are
recognized when a non-cancelable license agreement has been signed, the product
has been delivered, collection is probable and all significant obligations
relating to the license have been satisfied. There are no significant post-sales
support obligations related to the Company's license fees.
 
                                       26
<PAGE>
                        CONDOR TECHNOLOGY SOLUTIONS INC.
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
    Revenues from hardware procurement are recognized upon shipment of the
equipment. When installation services are an integral component of the hardware
procurement, the installation and hardware procurement revenue is recognized
upon the customer's acceptance of the equipment.
 
    Cost of revenues includes the provision of services and material directly
related to the revenues, costs of acquisition of hardware resold to clients,
subcontracted labor or other outside services and other direct costs associated
with revenues, as well as an allocation of certain indirect costs.
 
    DEFERRED REVENUE--The Company receives advance payment on certain
maintenance contracts. Such advance payments are deferred and are reflected in
income together with the related costs and expenses as the services are
performed.
 
    ALLOWANCE FOR DOUBTFUL ACCOUNTS--The Company provides an allowance for
uncollectible accounts receivable based on experience. Although it is reasonably
possible that management's estimate for uncollectible accounts could change in
the near future, management is not aware of any events that would result in a
change to its estimate which would be material to the Company's financial
position or results of operations. At December 31, 1998, the Company had an
allowance for doubtful accounts of approximately $572,000. There was no
allowance at December 31, 1997.
 
    CASH AND CASH EQUIVALENTS--The Company considers all highly liquid
investments purchased with an original maturity of three months or less to be
cash equivalents.
 
    RESTRICTED CASH--The Company has retained cash in escrow accounts related to
the acquisitions of two companies. A corresponding escrow payable has been
recorded in accrued expenses and other current liabilities, and the amounts will
be paid in 1999 as required based on the purchase agreements.
 
    CONCENTRATION OF CREDIT RISK--The Company maintains cash in bank deposit
accounts, which, at times, may exceed federally insured limits. The Company has
not experienced any losses in such accounts and believes it is not exposed to
any significant credit risk on cash. The Company does not believe that it is
subject to any unusual credit risk beyond the normal credit risk attendant in
its business.
 
    INVENTORY--Inventory is stated at the lower of cost or market. Cost is
determined using the average cost method and is comprised of goods held for
resale and maintenance parts and supplies. At December 31, 1998, the Company had
inventory of approximately $740,000 which is included in prepaids and other
current assets.
 
    PROPERTY AND EQUIPMENT--Property and equipment are recorded at cost.
Improvements which substantially increase the useful lives of assets are
capitalized. Maintenance and repairs are expensed as incurred. Upon retirement
or disposal, the related cost and accumulated depreciation are removed from the
respective accounts and any gain or loss is recorded. Depreciation is computed
on the straight-line method based on the following estimated useful lives:
 
<TABLE>
<S>                                                                <C>
Computer equipment and machinery                                   3-7 years
                                                                        3-10
Furniture and fixtures                                                 years
                                                                        5-10
Leasehold improvements                                                 years
</TABLE>
 
    GOODWILL--Goodwill represents the excess of consideration over the net
assets acquired resulting from acquisitions of companies accounted for by the
purchase method. These amounts are amortized on a straight-line basis over
periods ranging from 7 to 35 years. At each balance sheet date, management
 
                                       27
<PAGE>
                        CONDOR TECHNOLOGY SOLUTIONS INC.
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
evaluates the recoverability of the goodwill based on the undiscounted cash flow
projections of each business acquired.
 
    SOFTWARE COSTS--Capitalization of development costs of new software
products, as well as costs incurred to enhance existing software products,
begins once the technological feasibility of the product is established.
Capitalization ceases when such software is ready for general release, at which
time amortization of the capitalized costs begins.
 
    Amortization of capitalized internally developed software costs is computed
as the greater of: (a) the amount determined by the ratio of the product's
current revenue to its total expected future revenue or (b) the straight-line
method over the product's estimated useful life of two to three years. Software
amortization expense was approximately $77,000 for the year ended December 31,
1998.
 
    Maintenance of software products, as well as research and development costs
related to new software products, are charged to expense as incurred.
 
    FAIR VALUE OF FINANCIAL INSTRUMENTS--The Company calculates the fair value
for each class of financial instruments for which it is practicable to estimate.
The carrying value of current assets and current liabilities approximates fair
value because of the relatively short maturities of these instruments. The
carrying value of long term debt approximates fair value since it carries a
fluctuating market interest rate.
 
    WARRANTY RESERVE--The Company records a warranty reserve related to certain
mainframe computer sales. The reserve recorded is based on experience in
warranty replacement and labor time. Warranty reserves were approximately
$1,710,000 and have been included with accrued expenses and other current
liabilities at December 31, 1998.
 
    INCOME TAXES--Deferred tax assets and liabilities are recognized at the
applicable income tax rates based upon future tax consequences of temporary
differences between the tax basis and financial reporting basis of assets and
liabilities.
 
    COMPREHENSIVE INCOME--Effective January 1, 1998, the Company adopted
Statement of Financial Accounting Standards No. 130, "Reporting Comprehensive
Income" ("SFAS No. 130"). This statement establishes the standards for reporting
and displaying comprehensive income and its components. Comprehensive income
consists of net income and foreign currency translation adjustments and is
presented in the Consolidated Statement of Changes in Stockholders' Equity. The
adoption of SFAS No. 130 had no impact on total stockholders' equity. No
reclassifications were required to conform prior year financial statements to
the SFAS No. 130 requirements.
 
    Foreign Currencies--Assets and liabilities recorded in foreign currencies on
the books of foreign subsidiaries are translated at the exchange rate on the
balance sheet date. Translation adjustments resulting from this process are
accumulated as a separate component of stockholders' equity. Revenues, costs,
and expenses are translated at average rates of exchange prevailing during the
year. Gains and losses on foreign currency transactions are included in
nonoperating expenses.
 
    STOCK-BASED COMPENSATION--Statement of Financial Accounting Standards No.
123, "Accounting for Stock-Based Compensation," ("SFAS No. 123") provides a fair
value based method of accounting for employee stock options or similar equity
instruments, however this statement allows companies to continue to utilize the
intrinsic value based measure of accounting prescribed by Accounting Principles
Board Opinion No. 25, "Accounting for Stock Issued to Employees" ("APB No. 25").
Companies electing to remain with the accounting provided in APB No. 25 must
make pro forma disclosures of net income and
 
                                       28
<PAGE>
                        CONDOR TECHNOLOGY SOLUTIONS INC.
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
earnings per share as if the fair value method of accounting had been applied.
The Company accounts for stock based compensation pursuant to the requirements
of APB No. 25 and provides pro forma disclosure of net income and earnings per
share, pursuant to the requirements of SFAS No. 123 as applicable, in Note 11
herein.
 
    Earnings Per Share--The Company presents basic and diluted earnings per
share ("EPS") on the face of the income statement. Basic EPS excludes dilution
and is computed by dividing income available to common stockholders by the
weighted-average number of common shares outstanding for the period. Diluted EPS
reflects the potential dilution that could occur if securities or other
contracts to issue common stock were exercised or converted into common stock
that then shared in the earnings of the entity. Dilutive securities are excluded
from the computation in periods in which they have an anti-dilutive effect.
 
    USE OF ESTIMATES--The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
the disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
 
    Reclassifications--Certain amounts in prior year financial statements have
been reclassified to conform to the current year presentation.
 
3. ACQUISITIONS
 
    The following table sets forth the consideration paid in cash and in shares
of Common Stock to the stockholders of each of the operating companies (in
thousands, except share data):
 
<TABLE>
<CAPTION>
                                   SHARES OF                                             ADJUSTED  ALLOCATION OF
                DATE                 COMMON       VALUE     CONTINGENT        TOTAL        NET       PURCHASE
              ACQUIRED     CASH   STOCK ISSUED  OF SHARES  CONSIDERATION  CONSIDERATION   ASSETS       PRICE      GOODWILL  LIFE
           -------------- ------- ------------  ---------  -------------  -------------  --------  -------------  --------  ----
<S>        <C>            <C>     <C>           <C>        <C>            <C>            <C>       <C>            <C>       <C>
MST         Feb. 10, 1998 $ 9,750    603,846     $ 6,280      $    --       $ 16,030      $  262                  $15,768    35
CHMC        Feb. 10, 1998  17,100    146,154       1,520           --         18,620       1,847                   16,773    35
Federal     Feb. 10, 1998   7,500    576,923       6,000        9,000         22,500       1,886                   18,659    35
                                                                                                        1,955(C)            3.5
Corporate
  Access    Feb. 10, 1998   5,200    200,000       2,080           --          7,280         427                    6,853    30
ISSI        Feb. 10, 1998   5,000    538,462       5,600        7,356         17,956       1,641        5,000(A)    8,815     7
                                                                                                        2,500(B)              5
USComm      Feb. 10, 1998     600     46,154         480           --          1,080         144                      936    30
InVenture   Feb. 10, 1998     750     57,692         600        2,000          3,350        (145)                   3,495    35
MIS         Feb. 10, 1998   1,200    138,462       1,440           --          2,640        (396)                   3,036    35
DST           May 5, 1998   1,000      9,600         150           --          1,150        (200)                   1,350    35
Louden      June 30, 1998   2,579    217,486       3,000        6,300         11,879         595                   11,284    35
LINC        July 17, 1998  21,545         --          --           --         21,545         328                   21,217    35
PowerCrew    Nov. 4, 1998   2,763     72,522         800           --          3,563        (146)                   3,709    35
Global      Dec. 10, 1998  24,000    738,178       8,000           --         32,000       3,060                   25,540    35
                                                                                                        3,400(C)             10
                          ------- ------------  ---------  -------------  -------------  --------  -------------  --------
                          $98,987  3,345,479     $35,950      $24,656       $159,593      $9,303      $12,855     $137,435
                          ------- ------------  ---------  -------------  -------------  --------  -------------  --------
                          ------- ------------  ---------  -------------  -------------  --------  -------------  --------
</TABLE>
 
------------------------
 
    (A) Represents amount allocated to in-process research and development.
 
    (B) Represents amount allocated to existing technology.
 
    (C) Represents amount allocated to management services agreement.
 
                                       29
<PAGE>
                        CONDOR TECHNOLOGY SOLUTIONS INC.
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
3. ACQUISITIONS (CONTINUED)
    Of the total cash paid for the operating companies reported above, escrow
deposits of $2,750,000 are still held by the Company pending completion of final
net worth adjustments for PowerCrew and Global. Interest on the escrow balance
of $6,000 has been recorded as of December 31, 1998.
 
    Pursuant to contingent payment agreements entered into as part of the
acquisitions, ten of the operating companies are eligible to receive contingent
consideration in the form of additional common stock and cash. Such contingent
consideration is based on a multiple of earnings and may be paid if these
companies achieve a level of earnings in excess of projected earnings. As of
December 31, 1998, the operating companies have earned approximately $24,656,000
of contingent consideration, of which $7,283,000 is payable in cash. The
remaining unearned maximum consideration equals $35,494,000 covering a period
from 1999 to 2001. Any additional payments made when the contingency is resolved
will be accounted for as goodwill and will be amortized over the remaining
estimated life of such goodwill.
 
    The Company has accounted for the acquisitions of the operating companies as
purchase business combinations. The excess of purchase price over the fair
values of the net assets acquired has been recorded as goodwill, which is being
amortized on a straight-line basis. The purchase price allocation is subject to
change as additional information becomes available.
 
    The results of operations of all operating companies have been reflected in
the financial statements as of their respective acquisition dates. The following
table reflects unaudited pro forma combined results of operations of the
operating companies on the basis that the acquisitions of all of the operating
companies had taken place at the beginning of the fiscal year for the years
ended December 31, (in thousands, except per share amounts):
 
<TABLE>
<CAPTION>
                                                                           1997        1998
                                                                        ----------  ----------
<S>                                                                     <C>         <C>
Revenues..............................................................  $  180,296  $  227,528
Net income............................................................       6,802      10,547
 
Net income per basic share............................................  $     0.72  $     0.88
Net income per diluted share..........................................  $     0.72  $     0.84
</TABLE>
 
    The unaudited pro forma amounts reflect the results of operations for all of
the operating companies as well as the following purchase accounting adjustments
for the periods presented: reductions in salaries, bonuses and benefits to the
stockholders of the operating companies to which they have agreed prospectively;
reductions in profit sharing distributions to stockholders of one of the
operating companies to which they have agreed prospectively; interest on assumed
borrowings; elimination of revenues and cost of revenues on transactions between
operating companies occurring prior to the acquisition by the Company;
amortization of goodwill recorded as a result of the acquisitions; income taxes
on S-corporation income; and the estimated income tax effect on the pro forma
adjustments. Total pro forma adjustments included as of December 31, 1997 and
1998 were approximately $1,435,000 and $7,311,000, respectively, which increase
net income.
 
    The unaudited pro forma combined results of operations may not be comparable
to and may not be indicative of the actual results that would have occurred had
the acquisitions been consummated at the beginning of 1997 or at the beginning
of 1998 or of future operations of the combined companies because the operating
companies were not under common control or management and had different tax and
capital structures during the periods presented.
 
                                       30
<PAGE>
                        CONDOR TECHNOLOGY SOLUTIONS INC.
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
4. PROPERTY AND EQUIPMENT
 
    Property and equipment were comprised of the following at December 31, (in
thousands):
 
<TABLE>
<CAPTION>
                                                                                1997       1998
                                                                              ---------  ---------
<S>                                                                           <C>        <C>
Computer equipment..........................................................  $      --  $   4,044
Furniture, fixtures and equipment...........................................         --      1,158
Leasehold improvements......................................................         --        393
                                                                              ---------  ---------
                                                                                     --      5,595
Less accumulated depreciation...............................................         --      1,266
                                                                              ---------  ---------
                                                                              $      --  $   4,329
                                                                              ---------  ---------
                                                                              ---------  ---------
</TABLE>
 
    Depreciation expense for the year ended December 31, 1998 was approximately
$1,266,000. There was no depreciation expense in 1997.
 
5. GOODWILL AND OTHER INTANGIBLES
 
    Goodwill and other intangibles were comprised of the following at December
31, (in thousands):
 
<TABLE>
<CAPTION>
                                                                           1997        1998
                                                                         ---------  ----------
<S>                                                                      <C>        <C>
Goodwill on purchase of operating companies............................  $      --  $  137,435
Acquired contract rights...............................................         --       5,355
Acquired technology....................................................         --       2,500
Technology license.....................................................         --       3,100
Capitalized software development.......................................         --         184
                                                                         ---------  ----------
                                                                                --     148,574
Less accumulated amortization..........................................         --       3,411
                                                                         ---------  ----------
                                                                         $      --  $  145,163
                                                                         ---------  ----------
                                                                         ---------  ----------
</TABLE>
 
    Amortization expense for the year ended December 31, 1998 was approximately
$3,411,000. There was no amortization expense in 1997. Included in selling,
general and administrative expenses for the year ended December 31, 1998 was a
$5.0 million charge for purchased in-process research and development in
connection with the acquisition of one of the operating companies.
 
6. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
 
    At December 31, 1998, accrued expenses included the payable for the escrow
deposits related to PowerCrew and Global of approximately $2.8 million. Other
accrued expenses were as follows: accrued salaries, vacation, payroll taxes and
related employee benefits; accrued bonuses and commissions; the provision for
income taxes; warranty reserves; and other miscellaneous current liabilities. At
December 31, 1997, accrued expenses represented professional fees incurred prior
to the Offering.
 
7. DEBT
 
    The Company has a $50.0 million revolving credit facility (the "Revolver")
with a major commercial bank. The Revolver includes a letter of credit facility
of up to $15.0 million, of which $6.65 million is
 
                                       31
<PAGE>
                        CONDOR TECHNOLOGY SOLUTIONS INC.
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
7. DEBT (CONTINUED)
currently issued and outstanding to secure floor planning facilities with two
separate lending organizations. Borrowings under the Revolver bear interest
beginning at the London Interbank Offering Rate ("LIBOR") plus 150 to 250 basis
points or the Base Rate, which is the greater of the Federal funds Rate plus
0.50% or the Prime rate plus 25 to 125 basis points, at the option of the
Company. The interest rates are based on a pricing ratio of debt to earnings.
The Company is also required to pay a commitment fee at the annual percentage
rate of 0.50% as defined in the agreement. The Company must comply with various
loan covenants including (i) maintenance of certain financial ratios; (ii)
restrictions on additional indebtedness; (iii) restrictions on liens,
guarantees, advances and dividends; and (iv) restrictions on the type, size and
number of acquisitions. The Revolver, which expires in April 2001, is intended
to be used for acquisitions, working capital and general corporate purposes.
Borrowings on the Revolver were $24.0 million at December 31, 1998 carried at a
weighted average interest rate of 6.63%. The Company has floor planning
facilities of $13.75 million to support the working capital needs of the
companies in its desktop services division. These facilities are secured by
$6.65 million of letters of credit, issued under the Revolver and certain of the
assets of the desktop service division. The primary floor planning facility
requires the Company to comply with various loan covenants identical to those
required under the Revolver. The facility continues until such time that either
party gives 60 days written notice of termination or there is an event of
default. Borrowings under the floor planning facilities are included in accounts
payable at December 31, 1999.
 
    Indebtedness under both the Revolver and the primary floor planning facility
are collateralized by substantially all of the assets of the Company.
 
8. STOCKHOLDERS' EQUITY (DEFICIT)
 
    COMMON STOCK AND PREFERRED STOCK--The Company effected a one-for-5.72568
reverse stock split effective on the day preceding the date of the final
Prospectus for the Offering. In addition, on October 1, 1997, the Company
increased the number of authorized shares of common stock to 49 million and
authorized 1 million shares of $.01 par value preferred stock. The effects of
the Common Stock split and the increase in the shares of authorized common stock
have been retroactively reflected in the financial statements.
 
    In connection with the organization of the Company, during 1996 Condor
issued 1,413,806 shares of Common Stock to The Commonwealth Group
("Commonwealth") and other founders in exchange for consulting, financial
advisory and related services provided to Condor and, with respect to
Commonwealth, its commitment to provide funds necessary to effect the Mergers
and the Offering. These non-monetary assets were considered to have an aggregate
value of $87,000. Amounts due to stockholder were reimbursed out of the proceeds
of the Offering, together with interest on such advances at the prime rate.
Subsequent to the issuance of shares to Commonwealth, such shares were
distributed to its individual principals.
 
    During 1997, 255,820 of Common Stock shares were issued in exchange for
services associated with the Offering that are considered to have an aggregate
value of $452,031 and 39,297 shares were sold to investors for $150,000. Also
during 1997, the Company issued a total of 183,384 shares of Common Stock to
management. As a result, the Company recorded for financial statement purposes a
non-recurring non-cash compensation charge of approximately $1,771,000 for the
year ended December 31, 1997, representing the estimated fair value of the
shares on the date of issuance.
 
                                       32
<PAGE>
                        CONDOR TECHNOLOGY SOLUTIONS INC.
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
8. STOCKHOLDERS' EQUITY (DEFICIT) (CONTINUED)
    On February 5, 1998, the Company sold 5,900,000 shares of Common Stock to
the public at $13.00 per share ("the Offering"). The net proceeds to the Company
from the Offering (after deducting underwriting commissions and other offering
costs) were $62.2 million. Of this amount, $47.1 million was used to pay the
cash portion of the purchase prices of the Founding Companies.
 
    In connection with the Offering, the Company granted to the underwriters an
option to purchase an additional 885,000 shares at $13.00 per share. On March 1,
1998, the underwriters exercised this option. The net proceeds to the Company
from this sale of shares was $10.7 million (after deducting underwriting
commissions).
 
    Total shares issued for the purchase of the Founding Companies were
2,307,693 on February 10, 1998. Also during 1998, the Company issued 9,600
unregistered shares and 1,028,186 registered shares for the purchase of four
Other Acquisitions as described in Note 3.
 
    TREASURY STOCK--In February 1998, the Company repurchased 13,178 shares of
Common Stock from one of the founding investors in the Company. The Common Stock
was repurchased for $194,376 and has been recorded as a separate component of
stockholders' equity.
 
9. EARNINGS PER SHARE
 
    The Company calculates and presents earnings per share ("EPS") on both a
basic and diluted basis. Dilutive securities are excluded from the computation
in periods which they have an anti-dilutive effect. Net income available to
common stockholders and common equivalent stockholders is equal to net income
for all periods presented.
 
    The following tables represent reconciliations between the weighted average
common stock outstanding used in basic EPS and the weighted average common and
common equivalent shares outstanding used in diluted EPS for the years ended
December 31, (in thousands):
 
<TABLE>
<CAPTION>
                                                                               1997       1998
                                                                             ---------  ---------
<S>                                                                          <C>        <C>
Weighted average common stock outstanding (basic shares outstanding).......      1,680     10,193
Stock options, as if converted.............................................         --         85
Contingent purchase price adjustment.......................................         --        489
                                                                             ---------  ---------
Weighted average common and common equivalent shares outstanding (diluted
  shares outstanding)......................................................      1,680     10,767
                                                                             ---------  ---------
                                                                             ---------  ---------
</TABLE>
 
                                       33
<PAGE>
                        CONDOR TECHNOLOGY SOLUTIONS INC.
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
10. INCOME TAXES
 
    INCOME TAX PROVISION--The provision for income taxes consisted of the
following amounts for the years ended December 31, (in thousands):
 
<TABLE>
<CAPTION>
                                                                               1997       1998
                                                                             ---------  ---------
<S>                                                                          <C>        <C>
Provision (benefit) for income tax:
Current
  U.S. federal.............................................................  $      --  $   6,739
  State and local..........................................................         --      1,476
                                                                             ---------  ---------
                                                                                    --      8,215
Deferred
  U.S. federal.............................................................       (869)      (242)
  State and local..........................................................       (163)       (66)
                                                                             ---------  ---------
                                                                                (1,032)      (308)
                                                                             ---------  ---------
Total income tax (benefit) expense.........................................     (1,032)     7,907
Valuation allowance........................................................      1,032     (1,032)
                                                                             ---------  ---------
                                                                             $      --  $   6,875
                                                                             ---------  ---------
                                                                             ---------  ---------
</TABLE>
 
    A reconciliation of the tax provision at the U.S. statutory rate to the
effective income tax expense rate as reported is as follows for the years ended
December 31,
 
<TABLE>
<CAPTION>
                                                                                   1997       1998
                                                                                 ---------  ---------
<S>                                                                              <C>        <C>
Tax (benefit) provision at U.S. statutory rate.................................      (34.0)%      35.0%
State income taxes, net of federal benefit.....................................       (4.0)       8.1
Net operating loss.............................................................       38.0       (7.9)
Intangible amortization........................................................         --        6.7
Research and development write-off.............................................         --       14.1
Other..........................................................................         --       (0.6)
                                                                                 ---------        ---
Effective income tax expense rate..............................................        0.0%      55.4%
                                                                                 ---------        ---
                                                                                 ---------        ---
</TABLE>
 
DEFERRED INCOME TAXES
 
    Deferred tax assets (liabilities) include the following at December 31, (in
thousands):
 
<TABLE>
<CAPTION>
                                                                                1997       1998
                                                                              ---------  ---------
<S>                                                                           <C>        <C>
Employee benefits...........................................................  $      --  $      75
Accelerated depreciation....................................................         --        (61)
Accrued liabilities not currently deductible................................         --        108
Change in accounting method from cash to accrual for tax reporting..........         --       (285)
                                                                              ---------  ---------
                                                                              $      --  $    (163)
                                                                              ---------  ---------
                                                                              ---------  ---------
</TABLE>
 
                                       34
<PAGE>
                        CONDOR TECHNOLOGY SOLUTIONS INC.
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
10. INCOME TAXES (CONTINUED)
    Included in the net assets acquired through acquisitions in 1998 is
approximately $471,000 of net deferred tax liabilities. Deferred tax assets and
liabilities are included in prepaids and other current assets and other
long-term obligations on the consolidated balance sheet as of December 31, 1998.
 
11. STOCK COMPENSATION
 
    In October 1997, the Board of Directors and the Company's stockholders
approved the Company's 1997 Long-Term Incentive Plan (the "Plan"). The purpose
of the Plan is to provide a means by which the Company can attract and retain
executive officers, key employees, directors, consultants and other service
providers and to compensate such persons in a way that provides additional
incentives and enables such persons to increase their ownership interests in the
Company. Individual awards under the Plan may take the form of one or more of:
(i) either incentive stock options ("ISOs") or non-qualified stock options
("NQSOs"); (ii) stock appreciation rights ("SARs"); (iii) restricted or deferred
stock; (iv) dividend equivalents; (v) bonus shares and awards in lieu of Company
obligations to pay cash compensation, and (vi) other awards not otherwise
provided for, the value of which is based in whole or in part upon the value of
the common stock of the Company.
 
    The maximum number of shares of Common Stock that may be subject to
outstanding awards under the Plan will not exceed 15% of the aggregate number of
shares of Common Stock outstanding, minus the number of shares previously issued
pursuant to awards granted under the Plan. The number of shares deliverable upon
the exercise of ISOs is limited to 1,000,000. The Plan also provides that no
participant may be granted, in any calendar year, options or SARs for more than
400,000 shares or other awards settleable by delivery of more than 200,000
shares and limits cash awards in any calendar year to an amount equal to the
fair market value of the number of shares at the date of grant or the date of
settlement, whichever is greater.
 
    In addition to authorizing grants of awards to eligible persons, the Plan
authorizes automatic grants of NQSOs to non-employee directors. Under these
provisions, each person serving or who has agreed to serve as a non-employee
director at the commencement of the Offering was granted automatically an
initial option to purchase 10,000 shares, and thereafter each person who becomes
a non-employee director will be granted automatically an initial option to
purchase 10,000 shares upon such person's initial election as a director. In
addition, these provisions authorize the automatic annual grant to each
non-employee director of an option to purchase 5,000 shares at each annual
meeting of stockholders following the Offering, provided, however, that a
director will not be granted an annual option if he or she was granted an
initial option during the preceding three months. These options have an exercise
price equal to the fair market value of common stock on the date of grant and
the options will expire at the earlier of 10 years after the date of grant or
one year after the date the participant ceases to serve as a director of the
Company. These options become exercisable one to three years after the date of
grant, except that an option may be forfeited upon a participant's termination
of service as a director for reasons other than death or disability if the date
of termination is less than 11 months after the date of grant.
 
    During 1998, and in addition to the options automatically granted to
non-employee directors, options in the form of NQSOs to purchase shares of the
Company's Common Stock were granted to the executive officers and employees of
the Company. Each of the foregoing options has an exercise price equal to the
fair market value on the date of grant, and vests ratably over two to three
years after the date of grant as determined by the grant. These options will not
be exercisable until they are vested, and unvested options generally will be
forfeited upon a termination of employment that is voluntary by the participant.
Upon a
 
                                       35
<PAGE>
                        CONDOR TECHNOLOGY SOLUTIONS INC.
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
11. STOCK COMPENSATION (CONTINUED)
change of control of the Company, vesting of all options will be accelerated.
The options generally will expire on the earlier of 10 years after the date of
grant or three months after termination of employment.
 
    The Company has elected to use the intrinsic value method to account for its
stock-based compensation plans. Pro forma disclosures as if the Company adopted
the fair value recognition requirements follow. A summary of the status of the
Company's stock options as of December 31, 1998 and changes during then year
ended is presented below:
 
<TABLE>
<CAPTION>
                                                                                                      WEIGHTED
                                                                                                       AVERAGE
                                                                                        NUMBER OF     EXERCISE
                                                                                          SHARES        PRICE
                                                                                        ----------  -------------
<S>                                                                                     <C>         <C>
Outstanding at the beginning of the year                                                        --    $      --
Granted                                                                                  1,606,469        13.27
Exercised                                                                                       --           --
Forfeited                                                                                 (179,291)       14.58
                                                                                        ----------
Outstanding at the end of the year                                                       1,427,178    $   13.11
                                                                                        ----------
                                                                                        ----------
Options exercisable at the end of the year                                                  53,434    $   13.00
                                                                                        ----------
                                                                                        ----------
Weighted average fair value of options granted during the year                          $     5.65
                                                                                        ----------
                                                                                        ----------
</TABLE>
 
    The fair value of each option grant was estimated on the date of grant using
the Black-Scholes option-pricing model with the following weighted average
assumptions for 1998: (1) expected volatility of 58%; (2) risk free interest
rate of 5.17%; and (3) expected life of three years. The following table
summarizes information about stock options outstanding at December 31, 1998:
 
<TABLE>
<CAPTION>
                                                                          WEIGHTED AVERAGE
                                         NUMBER     WEIGHTED AVERAGE    REMAINING CONTRACTUAL
RANGE OF EXERCISE PRICES               OUTSTANDING   EXERCISE PRICE             LIFE
-------------------------------------  -----------  -----------------  -----------------------
<S>                                    <C>          <C>                <C>
9.00 to $14.00                          1,210,734       $   12.73             9.21 years
$14.01 to $16.00                          216,444       $   15.21             9.57 years
                                       -----------
Total                                   1,427,178
                                       -----------
                                       -----------
</TABLE>
 
    If compensation cost of the Company's grants for stock-based compensation
plans had been determined using the fair value method, the Company's net income
and basic and diluted earnings per share for 1998 would approximate the pro
forma amounts below (in thousands, except per share data):
 
<TABLE>
<CAPTION>
                                                                      AS REPORTED   PRO FORMA
                                                                      -----------  -----------
<S>                                                                   <C>          <C>
Net Income..........................................................   $   5,533    $   4,436
 
Basic earnings per share............................................   $    0.54    $    0.44
Diluted earnings per share..........................................   $    0.51    $    0.41
</TABLE>
 
12. EMPLOYEE STOCK PURCHASE PLAN
 
    On September 24, 1998, the stockholders of the Company approved the adoption
of the 1998 Employee Stock Purchase Plan ("ESPP") to provide employees of the
Company with the right to purchase common stock at a discount from the market
price through payroll deductions. A total of 325,000 shares are authorized for
issuance under the ESPP.
 
                                       36
<PAGE>
                        CONDOR TECHNOLOGY SOLUTIONS INC.
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
12. EMPLOYEE STOCK PURCHASE PLAN (CONTINUED)
    The purchase price of shares under the plan is the lower of 85 percent of
the share price on the first day of the offering period or the share price on
the purchase date. All employees are eligible to participate except (i) those
employed for less than 20 hours per week; (ii) employees who, as a result of
participation in the ESPP, would own stock or hold options to purchase stock
possessing five percent or more of the total combined voting power or value of
all classes of stock of the Company; and (iii) employees whose right to purchase
common stock under the ESPP accrues at a rate which exceeds $25,000 worth of
stock for each calendar year in which such option is outstanding at any time.
The initial offering period commenced on November 2, 1998. As of December 31,
1998, no purchases were made under the ESPP.
 
13. RETIREMENT PLANS
 
    During 1998, the operating companies had individual defined contribution or
profit sharing retirement plans in place. The total employer contribution to
these plans in 1998 was approximately $341,000. On December 31, 1998,
contributions to all of the individual plans were terminated and employees
became eligible to join a new company-wide retirement plan.
 
    On January 1, 1999, the Company established a defined contribution 401(k)
Retirement Savings Plan (the "401(k) Plan") to provide retirement benefits for
eligible employees. Employees are eligible to enter the 401(k) Plan as of the
first day of the first calendar quarter occurring after they begin employment,
as long as they have attained age 18. Employees are able to contribute up to 15%
of their salary to the 401(k) Plan. During 1999, the Company will contribute
100% of the first 3% and 50% of the next 3% contributed by the employee.
Employer contributions vest ratably over 5 years. All non-vested employer
contributions are forfeited upon the employee's termination. It is intended that
the operating company 401(k) plans will merge into the Company 401(k) Plan.
 
                                       37
<PAGE>
                        CONDOR TECHNOLOGY SOLUTIONS INC.
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
14. SUPPLEMENTAL CASH FLOW INFORMATION
 
<TABLE>
<CAPTION>
                                                                                                    YEARS ENDED
                                                                                                   DECEMBER 31,
                                                                                               ---------------------
                                                                                                 1997        1998
                                                                                               ---------  ----------
<S>                                                                                            <C>        <C>
                                                                                                  (IN THOUSANDS)
Cash Paid during the year for:
  Federal income tax payments................................................................  $      --  $    3,825
  State income tax payments..................................................................         --  $    1,036
  Interest payments..........................................................................         --         194
 
Supplemental disclosure of non-cash transactions:
  Liability incurred for technology license..................................................  $      --  $    1,550
 
Business acquisitions:
  Cash paid for business acquisitions........................................................  $      --  $   96,237
  Less cash acquired.........................................................................         --      (6,069)
                                                                                               ---------  ----------
  Cash paid for business acquisitions, net...................................................         --      90,168
  Liability incurred for contingent purchase liability.......................................                 24,656
  Purchase price in escrow...................................................................                  2,750
  Issuance of common stock for business acquisitions.........................................         --      35,950
                                                                                               ---------  ----------
  Total purchase price.......................................................................         --     153,524
  In-process research and development........................................................         --      (5,000)
  Less fair value of net assets acquired, net of cash........................................         --      (3,234)
                                                                                               ---------  ----------
  Excess of fair value over net assets acquired..............................................  $      --  $  145,290
                                                                                               ---------  ----------
                                                                                               ---------  ----------
</TABLE>
 
    The excess of fair value over net assets acquired of $145.3 million includes
goodwill, internally developed software and other intangibles acquired in
conjunction with the acquisitions of the operating companies.
 
15. SEGMENT REPORTING
 
    During the fourth quarter, the Company adopted Statement of Financial
Accounting Standards No. 131, "Disclosures about Segments of an Enterprise and
Related Information". This standard governs the way the Company reports
information about its operating segments.
 
    During 1998, the Company had three reportable segments: Consulting Services,
System Services and Desktop Services. Each of these three segments corresponds
to the Company's existing divisional structure.
 
    The Consulting Services Division provides strategic IT planning, decision
support, management consulting, and interactive media services. These services
involve the development of near and long-term technology plans that help clients
achieve specific strategic business objectives and include IT needs analysis,
technology infrastructure design, future technology planning and refreshment,
systems architecture development, decision support planning and analysis,
business process automation and Year 2000 consulting.
 
    The System Services Division offers its clients a single source for a wide
range of IT services required to successfully design, develop and implement
integrated IT solutions in diverse computing environments.
 
                                       38
<PAGE>
                        CONDOR TECHNOLOGY SOLUTIONS INC.
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
15. SEGMENT REPORTING (CONTINUED)
The division's services include custom application development, enterprise
resource planning, software package implementation, contract staffing and
recruiting, sale and implementation of the Safari InfoTOOLS report writer
software and training and continuing education
 
    The Desktop Services Division provides call-center development and support
services, help-desk operations, as well as a complete array of desktop systems
maintenance and support services to its clients, including hardware and software
maintenance, systems testing and engineering, and hardware procurement.
 
    The accounting policies of the reportable segments are the same as those
described in Note 2. The Company evaluates the performance of its operating
segments based on operating income after intercompany transactions have been
eliminated.
 
    Summarized financial information concerning the Company's reportable
segments at December 31, 1998 is shown in the following table (in thousands).
There were no segment operations prior to the Mergers with the Founding
Companies. The "Other" column includes corporate related items.
 
<TABLE>
<CAPTION>
                                CONSULTING   SYSTEM   DESKTOP     OTHER         CONSOLIDATED
                                ----------   -------  -------  -----------      ------------
<S>                             <C>          <C>      <C>      <C>              <C>
IT service revenues...........   $17,602     $53,140  $21,773  $        --       $ 92,515
Hardware procurement
  revenues....................        --          --   76,318           --         76,318
                                ----------   -------  -------  -----------      ------------
Total revenues................    17,602      53,140   98,091           --        168,833
 
Income from operations........     3,462       6,308    6,954       (5,000)(1)     11,724
Depreciation & amortization...       933       2,774      970           --          4,677
 
Total assets..................    42,759     119,062   36,509        2,312        200,642
Capital expenditures..........   $   386     $ 1,177  $   635  $       608       $  2,806
</TABLE>
 
------------------------
 
(1) Represents a charge of $5 million for in-process research and development
    recorded in the first quarter of 1998.
 
    Information about geographic areas has not been included as revenue and
long-lived assets attributable to countries outside of the United States are not
material to the financial statements taken as a whole.
 
    There were no customers that individually comprised more than 10% of
revenue.
 
16. NEW ACCOUNTING PRONOUNCEMENTS
 
    DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES--In June 1998, the Financial
Accounting Standards Board issued Statement of Financial Accounting Standards
No. 133, "Accounting for Derivative Instruments and for Hedging Activities"
("SFAS No. 133"). SFAS No. 133 requires all derivatives to be recorded on the
balance sheet at fair value and establishes "special accounting" for the
following three different types of hedges: hedges of changes in the fair value
of assets, liabilities or firm commitments; hedges of the variable cash flows of
forecasted transactions; and hedges of foreign currency exposures of net
investments in foreign operations. SFAS No. 133 is effective for years beginning
after June 15, 1999, with earlier adoption permitted. The Company believes that
the effect of adoption of SFAS No. 133 will not be material to its financial
position or results of operations.
 
                                       39
<PAGE>
                        CONDOR TECHNOLOGY SOLUTIONS INC.
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
17. RELATED PARTY TRANSACTIONS
 
    As of December 31, 1997, a founding stockholder had advanced the Company
approximately $2.5 million for the payment of Offering and Merger-related costs.
At December 31, 1997, the Company had deferred these costs, and they were offset
against the proceeds from the Offering in 1998. Such costs were reimbursed, plus
interest at the prime rate, subsequent to the Offering.
 
    The Company has a management services agreement with an ERP software license
reseller to provide implementation services related to that company's sale of
SAP R/3 licenses to middle market customers in New England. This agreement has a
term of ten years. The reseller is owned by the former owner of Global Core
Strategies, Inc., who is a consultant to the Company.
 
18. COMMITMENTS AND CONTINGENCIES
 
    LAWSUIT--In the course of Condor's consolidation efforts, SCM LLC d/b/a The
Commonwealth Group ("Commonwealth"), the promoter of the Offering, and Condor
negotiated with Emtec, Inc. ("Emtec"), an IT service company based in
Pennsylvania, with a view to Emtec becoming one of the Founding Companies. As
part of the process, Emtec's investment banker and Commonwealth executed two
confidentiality agreements pursuant to which each agreed, among other things,
not to disclose certain confidential information and Commonwealth agreed that it
would not seek to enter into a business transaction with any companies to be
introduced to it by Emtec's investment banker for a period of two years without
such investment banker's prior written consent. On October 28, 1997, Emtec filed
a Complaint in the United States District Court for the Eastern District of
Pennsylvania against Condor, Commonwealth, J. Marshall Coleman, a Managing
Director of Commonwealth and the former Chairman of the Board of Condor, and
Kennard F. Hill, the Company's Chairman of the Board and Chief Executive
Officer, alleging breach of contract, tortious interference with Emtec's
business relationship with Corporate Access and CHMC, two of the Founding
Companies, and misappropriation of a trade secret arising out of the
participation of CHMC and Corporate Access in the consolidation and the Offering
without Emtec's written consent. In connection with the three causes of action,
Emtec demands that the defendants disgorge the financial benefits that they have
and will obtain as a result of their breach of contract and seeks compensatory
and punitive damages. On December 31, 1997, the defendants filed an Answer,
denying the allegations and asserting various affirmative defenses. The court
denied Emtec's claim for unjust enrichment. A motion by Condor for partial
summary judgment was granted in part to eliminate Emtec's claim for
misappropriation of a trade secret. Trial of this matter could be scheduled in
the near future. The Company believes that Emtec's allegations are without merit
and that, in any event, the ultimate resolution of this action will not have a
material adverse effect on the Company's financial position or results of
operations. The Company has agreed to indemnify CHMC's directors, officers and
stockholders against any liability such persons may incur as a result of any
claims brought by Emtec against any of them that directly related to CHMC's
participation as a Founding Company. Commonwealth has agreed to indemnify the
Company with regard to any final judgment or settlement arising out of the above
action or any similar action. Commonwealth's obligations under such agreement
have been guaranteed by the three members of Commonwealth. The Company is a
party to other legal proceedings and disputes related to the Company's day to
day business operations, none of which are material to the financial position or
results of operations of the Company.
 
                                       40
<PAGE>
                        CONDOR TECHNOLOGY SOLUTIONS INC.
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
18. COMMITMENTS AND CONTINGENCIES (CONTINUED)
 
    OPERATING LEASES--The Company leases certain equipment and office space
under operating lease arrangements expiring through 2008. Future minimum rental
payments under non-cancelable operating leases at December 31, 1998 were as
follows (in thousands):
 
<TABLE>
<S>                                                          <C>
1999.......................................................  $   3,242
2000.......................................................      2,782
2001.......................................................      2,147
2002.......................................................      1,533
2003.......................................................      1,015
Thereafter.................................................      1,279
                                                             ---------
                                                             $  11,998
                                                             ---------
                                                             ---------
</TABLE>
 
    Rent expense for the years ended December 31, 1997 and 1998 was
approximately $49,000 and $2,243,000, respectively.
 
                                       41
<PAGE>
                                                                     SCHEDULE II
 
                       CONDOR TECHNOLOGY SOLUTIONS, INC.
 
                 SCHEDULE II--VALUATION AND QUALIFYING ACCOUNTS
 
                                 (IN THOUSANDS)
 
<TABLE>
<CAPTION>
                                                                                                   YEARS ENDED DECEMBER
                                                                                                           31,
                                                                                                   --------------------
<S>                                                                                                <C>        <C>
                                                                                                     1997       1998
                                                                                                   ---------  ---------
ALLOWANCE FOR DOUBTFUL ACCOUNTS
Balance at beginning of period...................................................................  $      --  $      --
Additions:
  Charged to expense.............................................................................         --        314
  Charged to other accounts:
    Investment in operating companies............................................................         --        497
    Deductions:..................................................................................         --       (239)
                                                                                                   ---------  ---------
Balance at end of period.........................................................................  $      --  $     572(1)
                                                                                                   ---------  ---------
                                                                                                   ---------  ---------
</TABLE>
 
------------------------
 
(1) Included in accounts receivable, net
 
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
  FINANCIAL DISCLOSURE
 
    None.
 
                                       42
<PAGE>
                                    PART III
 
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
 
    Reference is made to Item 4A of Part I hereof for certain information
required by this Item 10. Additional information required by this item is hereby
incorporated by reference from the Company's definitive proxy statement for the
1999 Annual Meeting of Shareholders to be filed with the Commission under
Section 14(a) of the Securities Exchange Act of 1934 on or before April 30,
1999.
 
ITEM 11. EXECUTIVE COMPENSATION
 
    The information required by this item is hereby incorporated by reference
from the Company's definitive proxy statement for the 1999 Annual Meeting of
Shareholders to be filed with the Commission under Section 14(a) of the
Securities Exchange Act of 1934 on or before April 30, 1999.
 
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
 
    The information required by this item is hereby incorporated by reference
from the Company's definitive proxy statement for the 1999 Annual Meeting of
Shareholders to be filed with the Commission under Section 14(a) of the
Securities Exchange Act of 1934 on or before April 30, 1999.
 
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
 
    The information required by this item is hereby incorporated by reference
from the Company's definitive proxy statement for the 1999 Annual Meeting of
Shareholders to be filed with the Commission under Section 14(a) of the
Securities Exchange Act of 1934 on or before April 30, 1999.
 
                                       43
<PAGE>
                                    PART IV
 
ITEM 14. EXHIBITS, FINANCIAL STATEMENTS SCHEDULES, AND REPORTS ON FORM 8-K
 
    The following documents are being filed as part of this Report:
 
<TABLE>
<CAPTION>
(a)(1)     The following financial statements are included in Part II, Item 8 of this
             Report:
                                                                                                PAGE
                                                                                                -----
<S>        <C>                                                                               <C>
           CONDOR TECHNOLOGY SOLUTIONS, INC. CONSOLIDATED FINANCIAL STATEMENTS
           Report of Independent Accountants...............................................          21
           Consolidated Balance Sheets.....................................................          22
           Consolidated Statements of Operations...........................................          23
           Consolidated Statement of Changes in Stockholders' Equity (Deficit).............          24
           Consolidated Statements of Cash Flows...........................................          25
           Notes to Consolidated Financial Statements......................................          26
 
(a)(2)     The following Financial Statement Schedules are filed as a part of the Annual
             Report:
           II. Valuation and Qualifying Accounts...........................................          42
           All other schedules are omitted because they are not applicable or the required information
             is shown in the financial statements or the notes thereto.
 
(a)(3)     The following Exhibits are filed as part of this Annual Report on Form 10-K as required by
             Item 601 of Regulation S-K. The Exhibits designated by an asterisk are management contracts
             and compensatory plans and arrangements required to be filed as Exhibits to this Annual
             Report on Form 10-K.
</TABLE>
 
<TABLE>
<CAPTION>
EXHIBIT
NUMBER                                                   DESCRIPTION
---------  --------------------------------------------------------------------------------------------------------
<S>        <C>
2.1        -- Agreement and Plan of Organization, dated as of October 1, 1997, by and among the Company, MST
              Acquisition Corp., Management Support Technology Corporation and the Stockholders named therein
              (Incorporated by reference to Exhibit 2.1 to the Registrant's Registration Statement on Form S-1
              (Registration No. 333-37179)).
 
2.2        -- Agreement and Plan of Organization, dated as of October 1, 1997, by and among the Company, CHMC
              Acquisition Corp., Computer Hardware Maintenance Company, Inc. and the Stockholders named therein
              (Incorporated by reference to Exhibit 2.2 to the Registrant's Registration Statement on Form S-1
              (Registration No. 333-37179)).
 
2.3        -- Agreement and Plan of Organization, dated as of October 1, 1997, by and among the Company, Federal
              Acquisition Corp., Federal Computer Corporation and the Stockholders named therein (Incorporated by
              reference to Exhibit 2.3 to the Registrant's Registration Statement on Form S-1 (Registration No.
              333-37179)).
 
2.4        -- Agreement and Plan of Organization, dated as of October 1, 1997, by and among the Company, Access
              Acquisition Corp., Corporate Access, Inc. and the Stockholders named therein (Incorporated by
              reference to Exhibit 2.4 to the Registrant's Registration Statement on Form S-1 (Registration No.
              333-37179)).
 
2.5        -- Agreement and Plan of Organization, dated as of October 1, 1997, by and among the Company,
              Interactive Acquisition Corp., Interactive Software Systems Incorporated and the Stockholders named
              therein (Incorporated by reference to Exhibit 2.5 to the Registrant's Registration Statement on Form
              S-1 (Registration No. 333-37179)).
</TABLE>
 
                                       44
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER                                                   DESCRIPTION
---------  --------------------------------------------------------------------------------------------------------
<S>        <C>
2.6        -- Agreement and Plan of Organization, dated as of October 1, 1997, by and among the Company, US Comm
              Acquisition Corp., U.S. Communications, Inc. and the Stockholders named therein (Incorporated by
              reference to Exhibit 2.6 to the Registrant's Registration Statement on Form S-1 (Registration No.
              333-37179)).
 
2.7        -- Agreement and Plan of Organization, dated as of October 1, 1997, by and among the Company, InVenture
              Acquisition Corp., InVenture Group, Inc. and the Stockholders named therein (Incorporated by
              reference to Exhibit 2.7 to the Registrant's Registration Statement on Form S-1 (Registration No.
              333-37179)).
 
2.8        -- Agreement and Plan of Organization, dated as of October 1, 1997, by and among the Company, MIS
              Acquisition Corp., MIS Technologies, Inc. and the Stockholders named therein (Incorporated by
              reference to Exhibit 2.8 to the Registrant's Registration Statement on Form S-1 (Registration No.
              333-37179)).
 
3.1        -- Amended and Restated Certificate of Incorporation of the Company (Incorporated by reference to
              Exhibit 3.1 to the Registrant's Registration Statement on Form S-1 (Registration No. 333-37179)).
 
3.1A       -- Certificate of Amendment of Amended and Restated Certificate of Incorporation of the Company
              (Incorporated by reference to Exhibit 3.1A to Amendment No. 4 to the Registrant's Registration
              Statement on Form S-1 (Registration No. 333-37179)).
 
3.2        -- By-Laws of the Company as amended (Incorporated by reference to Exhibit 3.2 to the Registrant's
              Registration Statement on Form S-1 (Registration No. 333-37179)).
 
4          -- Form of Certificate Evidencing Ownership of Common Stock of the Company (Incorporated by reference to
              Exhibit 4 to Amendment No. 1 to the Registrant's Registration Statement on Form S-1 (Registration No.
              333-37179)).
 
4.1        -- Condor Technology Solutions, Inc. Employee Stock Purchase Plan (Incorporated by reference to Exhibit
              4.1 to the Registrant's Registration Statement on Form S-8 (Registration No. 333-64505)).
 
4.2        -- Condor Technology Solutions, Inc. 401(k) Retirement Saving Plan (Incorporated by reference to Exhibit
              4.1 to the Registrant's Registration Statement on Form S-8 (Registration No. 333-73055)).
 
10.1*      -- 1997 Long-Term Incentive Plan of the Company (Incorporated by reference to Exhibit 10.1 to Amendment
              No. 1 to the Registrant's Registration Statement on Form S-1 (Registration No. 333-37179)).
 
10.1.1*    -- 1997 Long-Term Incentive Plan of the Company As Amended and Restated
 
10.2*      -- Employment Agreement between the Company and Kennard F. Hill (Incorporated by reference to Exhibit
              10.2 to the Registrant's Registration Statement on Form S-1 (Registration No. 333-37179)).
 
10.3*      -- Employment Agreement between the Company and C. Lawrence Meador (Incorporated by reference to Exhibit
              10.3 of the Registrant's Report on Form 10-K for the year ended December 31, 1997 (Registration No.
              0-23635)).
 
10.4*      -- Employment Agreement between the Company and Daniel J. Roche (Incorporated by reference to Exhibit
              10.4 to Amendment No. 1 to the Registrant's Registration Statement on Form S-1 (Registration No.
              333-37179)).
</TABLE>
 
                                       45
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER                                                   DESCRIPTION
---------  --------------------------------------------------------------------------------------------------------
<S>        <C>
10.5*      -- Employment Agreement between the Company and William J. Caragol, Jr. (Incorporated by reference to
              Exhibit 10.7 to Amendment No. 1 to the Registrant's Registration Statement on Form S-1 (Registration
              No. 333-37179)) and Amendment No. 1 to Employment Agreement between the Company and William J.
              Caragol, Jr. (Incorporated by reference to Exhibit 10.6.2 to the Registrant's Quarterly Report on
              Form 10-Q for the three months ended June 30, 1998).
 
10.6       -- Indemnification Agreement by and between SCM LL.C d/b/a The Commonwealth Group and the Company
              (Incorporated by reference to Exhibit 10.8 to Amendment No. 2 to the Registrant's Registration
              Statement on Form S-1 (Registration No. 333-37179)).
 
10.7       -- Business Loan and Security Agreement between the Company and First Union Commercial Corporation and
              related Stock Purchase Agreement and Revolving Promissory Note (Incorporated by reference to Exhibit
              10.1 to the Registrant's Quarterly Report on Form 10-Q for the three months ended March 31, 1998) and
              First Modification to Business Loan and Security Agreement between the Company and First Union
              Commercial Corporation and related ancillary documents (Incorporated by reference to Exhibit 10.1.1
              to the Registrant's Form 8-K/A Current Report as of February 22, 1998 (Registration No. 0-23635)).
 
10.8       -- Agreement for Wholesale Financing between Deutsche Financial Service Corporation and Computer
              Hardware Maintenance Company, Inc., Corporate Access, Inc., and U.S. Communications, Inc. and related
              Guaranty and Addendum to Guaranty and Agreement for Wholesale Financing (Incorporated by reference to
              Exhibit 10.2 to the Registrant's Quarterly Report on Form 10-Q for the three months ended March 31,
              1998).
 
10.9*      -- Employment Agreement between the Company and John F. McCabe (Incorporated by reference to Exhibit
              10.10 to the Registrant's Quarterly Report on From 10-Q for the three months ended June 30, 1998).
 
10.10      -- Stock Purchase Agreement, dated as of July 16, 1998, by and among the Company and the stockholders of
              LINC Systems Corporation (Incorporated by reference to Exhibit 10.11 to the Registrant's Quarterly
              Report on Form 10-Q for the three months ended June 30, 1998).
 
10.11      -- Purchase Agreement, among Condor Technology Solutions, Inc., Global Core Strategies, Inc., and Jerry
              Ward, dated December 10, 1998 (Incorporated by reference to Exhibit 2.2 to the Registrant's Form 8-K
              Current Report as of December 22, 1998 (Registration No. 0-23635)).
 
10.12*     -- Employment Agreement between LINC Systems Corporation and Robert F. Hefner
 
10.13*     -- Employment Agreement between Computer Hardware Maintenance Company and Michael G. Paglaiccetti
 
21         -- List of Subsidiaries of the Company.
 
23         -- Consent of PricewaterhouseCoopers LLP
 
24         -- Power of Attorney (on signature page hereof).
 
27         -- Financial Data Schedule.
</TABLE>
 
    (b) Reports on Form 8-K:
 
    The Company filed a Form 8-K Current Report on December 22, 1998 (as amended
on February 22, 1998) related to the Acquisition of Global Core Strategies
Acquisition, Inc.
 
                                       46
<PAGE>
                                   SIGNATURES
 
    Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.
 
                                CONDOR TECHNOLOGY SOLUTIONS, INC.
 
                                BY:  /S/ KENNARD F. HILL
                                     -----------------------------------------
                                     Kennard F. Hill
                                     Chief Executive Officer
 
Date: March 18, 1999
 
                               POWER OF ATTORNEY
 
    Each person whose signature appears below hereby authorizes and constitutes
Kennard F. Hill and Daniel J. Roche, and each of them singly, his true and
lawful attorneys-in-fact with full power of substitution and resubstitution, for
him or her and in his or her name, place and stead, in any and all capacities to
sign and file any and all amendments to this report with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, and he or she hereby ratifies and confirms all that said
attorneys-in-fact or any of them, or their substitutes, may lawfully do or cause
to be done by virtue hereof.
 
    Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the date indicated.
 
          SIGNATURE              CAPACITY IN WHICH SIGNED           DATE
------------------------------  ---------------------------  -------------------
                                Chairman of the Board and
     /s/ KENNARD F. HILL          Chief Executive Officer
------------------------------    (Principal Executive         March 16, 1999
       Kennard F. Hill            Officer)
 
     /s/ DANIEL J. ROCHE        President and Chief
------------------------------    Operating Officer            March 16, 1999
       Daniel J. Roche
 
                                Vice President and Chief
    /s/ WILLIAM J. CARAGOL        Financial Officer
------------------------------    (Principal Financial and     March 16, 1999
      William J. Caragol          Accounting Officer)
 
    /s/ C. LAWRENCE MEADOR      Vice Chairman of the Board
------------------------------                                 March 16, 1999
      C. Lawrence Meador
 
     /s/ PETER T. GARAHAN       Director
------------------------------                                 March 13, 1999
       Peter T. Garahan
 
     /s/ ANN TORRE GRANT        Director
------------------------------                                 March 13, 1999
       Ann Torre Grant
 
    /s/ WILLIAM E. HUMMEL       Director
------------------------------                                 March 13, 1999
      William E. Hummel
 
     /s/ DENNIS E. LOGUE        Director
------------------------------                                 March 13, 1999
        Dennis E.Logue
 
    /s/ EDWARD J. MATHIAS       Director
------------------------------                                 March 13, 1999
      Edward J. Mathias
 
    /s/ WILLIAM M. NEWPORT      Director
------------------------------                                 March 15, 1999
      William M. Newport
 
                                       47
<PAGE>
                                 EXHIBIT INDEX
 
<TABLE>
<CAPTION>
  EXHIBIT
  NUMBER                                                             DESCRIPTION
-----------             -----------------------------------------------------------------------------------------------------
<S>          <C>        <C>
 
       2.1      --      Agreement and Plan of Organization, dated as of October 1, 1997, by and among the Company, MST
                        Acquisition Corp., Management Support Technology Corporation and the Stockholders named therein
                        (Incorporated by reference to Exhibit 2.1 to the Registrant's Registration Statement on Form S-1
                        (Registration No. 333-37179)).
 
       2.2      --      Agreement and Plan of Organization, dated as of October 1, 1997, by and among the Company, CHMC
                        Acquisition Corp., Computer Hardware Maintenance Company, Inc. and the Stockholders named therein
                        (Incorporated by reference to Exhibit 2.2 to the Registrant's Registration Statement on Form S-1
                        (Registration No. 333-37179)).
 
       2.3      --      Agreement and Plan of Organization, dated as of October 1, 1997, by and among the Company, Federal
                        Acquisition Corp., Federal Computer Corporation and the Stockholders named therein (Incorporated by
                        reference to Exhibit 2.3 to the Registrant's Registration Statement on Form S-1 (Registration No.
                        333-37179)).
 
       2.4      --      Agreement and Plan of Organization, dated as of October 1, 1997, by and among the Company, Access
                        Acquisition Corp., Corporate Access, Inc. and the Stockholders named therein (Incorporated by
                        reference to Exhibit 2.4 to the Registrant's Registration Statement on Form S-1 (Registration No.
                        333-37179)).
 
       2.5      --      Agreement and Plan of Organization, dated as of October 1, 1997, by and among the Company,
                        Interactive Acquisition Corp., Interactive Software Systems Incorporated and the Stockholders named
                        therein (Incorporated by reference to Exhibit 2.5 to the Registrant's Registration Statement on Form
                        S-1 (Registration No. 333-37179)).
 
       2.6      --      Agreement and Plan of Organization, dated as of October 1, 1997, by and among the Company, US Comm
                        Acquisition Corp., U.S. Communications, Inc. and the Stockholders named therein (Incorporated by
                        reference to Exhibit 2.6 to the Registrant's Registration Statement on Form S-1 (Registration No.
                        333-37179)).
 
       2.7      --      Agreement and Plan of Organization, dated as of October 1, 1997, by and among the Company, InVenture
                        Acquisition Corp., InVenture Group, Inc. and the Stockholders named therein (Incorporated by
                        reference to Exhibit 2.7 to the Registrant's Registration Statement on Form S-1 (Registration No.
                        333-37179)).
 
       2.8      --      Agreement and Plan of Organization, dated as of October 1, 1997, by and among the Company, MIS
                        Acquisition Corp., MIS Technologies, Inc. and the Stockholders named therein (Incorporated by
                        reference to Exhibit 2.8 to the Registrant's Registration Statement on Form S-1 (Registration No.
                        333-37179)).
 
       3.1      --      Amended and Restated Certificate of Incorporation of the Company (Incorporated by reference to
                        Exhibit 3.1 to the Registrant's Registration Statement on Form S-1 (Registration No. 333-37179)).
 
      3.1A      --      Certificate of Amendment of Amended and Restated Certificate of Incorporation of the Company
                        (Incorporated by reference to Exhibit 3.1A to Amendment No. 4 to the Registrant's Registration
                        Statement on Form S-1 (Registration No. 333-37179)).
 
       3.2      --      By-Laws of the Company as amended (Incorporated by reference to Exhibit 3.2 to the Registrant's
                        Registration Statement on Form S-1 (Registration No. 333-37179)).
</TABLE>
 
                                       48
<PAGE>
<TABLE>
<CAPTION>
  EXHIBIT
  NUMBER                                                             DESCRIPTION
-----------             -----------------------------------------------------------------------------------------------------
<S>          <C>        <C>
         4      --      Form of Certificate Evidencing Ownership of Common Stock of the Company (Incorporated by reference to
                        Exhibit 4 to Amendment No. 1 to the Registrant's Registration Statement on Form S-1 (Registration No.
                        333-37179)).
 
       4.1      --      Condor Technology Solutions, Inc. Employee Stock Purchase Plan (Incorporated by reference to Exhibit
                        4.1 to the Registrant's Registration Statement on Form S-8 (Registration No. 333-64505)).
 
       4.2      --      Condor Technology Solutions, Inc. 401(k) Retirement Saving Plan (Incorporated by reference to Exhibit
                        4.1 to the Registrant's Registration Statement on Form S-8 (Registration No. 333-73055)).
 
     10.1*      --      1997 Long-Term Incentive Plan of the Company (Incorporated by reference to Exhibit 10.1 to Amendment
                        No. 1 to the Registrant's Registration Statement on Form S-1 (Registration No. 333-37179)).
 
    10.1.1      --      1997 Long-Term Incentive Plan of the Company As Amended and Restated
 
     10.2*      --      Employment Agreement between the Company and Kennard F. Hill (Incorporated by reference to Exhibit
                        10.2 to the Registrant's Registration Statement on Form S-1 (Registration No. 333-37179)).
 
     10.3*      --      Employment Agreement between the Company and C. Lawrence Meador (Incorporated by reference to Exhibit
                        10.3 of the Registrant's Report on Form 10-K for the year ended December 31, 1997 (Registration No.
                        0-23635)).
 
     10.4*      --      Employment Agreement between the Company and Daniel J. Roche (Incorporated by reference to Exhibit
                        10.4 to Amendment No. 1 to the Registrant's Registration Statement on Form S-1 (Registration No.
                        333-37179)).
 
     10.5*      --      Employment Agreement between the Company and William J. Caragol, Jr. (Incorporated by reference to
                        Exhibit 10.7 to Amendment No. 1 to the Registrant's Registration Statement on Form S-1 (Registration
                        No. 333-37179)) and Amendment No. 1 to Employment Agreement between the Company and William J.
                        Caragol, Jr. (Incorporated by reference to Exhibit 10.6.2 to the Registrant's Quarterly Report on
                        Form 10-Q for the three months ended June 30, 1998).
 
      10.6      --      Indemnification Agreement by and between SCM LL.C d/b/a The Commonwealth Group and the Company
                        (Incorporated by reference to Exhibit 10.8 to Amendment No. 2 to the Registrant's Registration
                        Statement on Form S-1 (Registration No. 333-37179)).
 
      10.7      --      Business Loan and Security Agreement between the Company and First Union Commercial Corporation and
                        related Stock Purchase Agreement and Revolving Promissory Note (Incorporated by reference to Exhibit
                        10.1 to the Registrant's Quarterly Report on Form 10-Q for the three months ended March 31, 1998) and
                        First Modification to Business Loan and Security Agreement between the Company and First Union
                        Commercial Corporation and related ancillary documents (Incorporated by reference to Exhibit 10.1.1
                        to the Registrant's Form 8-K/A Current Report as of February 22, 1998 (Registration No. 0-23635)).
 
      10.8      --      Agreement for Wholesale Financing between Deutsche Financial Service Corporation and Computer
                        Hardware Maintenance Company, Inc., Corporate Access, Inc., and U.S. Communications, Inc. and related
                        Guaranty and Addendum to Guaranty and Agreement for Wholesale Financing (Incorporated by reference to
                        Exhibit 10.2 to the Registrant's Quarterly Report on Form 10-Q for the three months ended March 31,
                        1998).
</TABLE>
 
                                       49
<PAGE>
<TABLE>
<CAPTION>
  EXHIBIT
  NUMBER                                                             DESCRIPTION
-----------             -----------------------------------------------------------------------------------------------------
<S>          <C>        <C>
     10.9*      --      Employment Agreement between the Company and John F. McCabe (Incorporated by reference to Exhibit
                        10.10 to the Registrant's Quarterly Report on From 10-Q for the three months ended June 30, 1998).
 
     10.10      --      Stock Purchase Agreement, dated as of July 16, 1998, by and among the Company and the stockholders of
                        LINC Systems Corporation (Incorporated by reference to Exhibit 10.11 to the Registrant's Quarterly
                        Report on Form 10-Q for the three months ended June 30, 1998).
 
     10.11      --      Purchase Agreement, among Condor Technology Solutions, Inc., Global Core Strategies, Inc., and Jerry
                        Ward, dated December 10, 1998 (Incorporated by reference to Exhibit 2.2 to the Registrant's Form 8-K
                        Current Report as of December 22, 1998 (Registration No. 0-23635)).
 
    10.12*      --      Employment Agreement between LINC Systems Corporation and Robert F. Hefner
 
    10.13*      --      Employment Agreement between Computer Hardware Maintenance Company and Michael G. Paglaiccetti
 
        21      --      List of Subsidiaries of the Company.
 
        23      --      Consent of PricewaterhouseCoopers LLP
 
        24      --      Power of Attorney (on signature page hereof).
 
        27      --      Financial Data Schedule.
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