ADVANCED PRECISION TECHNOLOGY INC
10SB12G/A, 2000-12-06
DETECTIVE, GUARD & ARMORED CAR SERVICES
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                                UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549

                             AMENDMENT NO. 2 TO

                                  FORM 10-SB

                       GENERAL FORM FOR REGISTRATION OF
                     SECURITIES OF SMALL BUSINESS ISSUERS
      Under Section 12(b) or (g) of The Securities Exchange Act of 1934


                     ADVANCED PRECISION TECHNOLOGY, INC.
     ___________________________________________________________________
                (Name of Small Business Issuer in its charter)

                                    NEVADA
                      _________________________________
        (State or other jurisdiction of incorporation or organization)

                                 87-0455378
                    _______________________________________
                   (I.R.S. Employer Identification Number)

                 2271-D South Vasco Road, Livermore, CA 94550
                ______________________________________________
                   (Address of principal executive offices)

                                (925) 447-6900
              _________________________________________________
               (Issuer's Telephone Number, Including Area Code)


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

                                     None


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


                  Common Stock, par value $0.001 per share
        ______________________________________________________________
                               (Title of Class)

       _______________________________________________________________
                                (Title of Class)

<PAGE>

                                    Part I

Item 1.  Description of Business.

Company Overview
----------------

     Advanced Precision Technology, Inc. (formerly UV Color Corporation), a
Nevada corporation (the "Company"), is a San Francisco area developer of
innovative identity verification systems using biometrics.  "Biometric" is
defined in Webster's Dictionary as "the statistical measurement and analysis
of biological observations and phenomena."  A more technically accurate
definition is: any automated technique of measuring a physical characteristic
or personal trait of an individual and comparing that characteristic to a
database of one or many records in order to recognize the identity of that
individual.  Even more simply stated, biometrics is the use of some part of
the human body (such as a fingerprint) as a unique "password" to achieve
identity verification.

    The Company holds a total of seven United States Patents covering various
aspects of its cutting edge technology and has one United States Patent
application pending.  The Company's business plan calls for the Company to
produce cost-effective, reliable fingerprint identity verification solutions.

Biometric Industry Overview
---------------------------

    The analysis of unique biological characteristics of an individual, also
known as biometrics, is being used increasingly for identification and
verification purposes. Examples of unique biological characteristics that can
be used to identify an individual include fingerprints, retinal blood vessel
or iris patterns of the eye, hand geometry, voice and facial structure.  Among
these, fingerprint analysis has gained the most widespread use for biometric
identification and verification purposes.  Fingerprint analysis is an accurate
and reliable method to distinguish one individual from another, employs
well-developed and proven technology and processes and is viewed as less
intrusive relative to certain other biometric identification methods.  The
process of capturing, storing, retrieving and comparing fingerprints has
become increasingly automated as a result of advances in optics, electronics
and computing.  These advances have enabled fingerprint verification
technology to be used to confirm an individual's identity for a variety of
commercial and governmental applications.

Biometric Security
------------------

     The costs of fraud are estimated to be in the billions of dollars each
year in the United States alone.  In addition, damages resulting from security
breaches, such as unauthorized persons gaining improper access to confidential
information, may not be quantifiable, but can be equally as problematic.
Accordingly, the ability to verify the identity of a specific individual is of
critical importance in reducing acts of fraud and increasing security.  Each
day an individual is required to identify himself numerous times with
something the individual has in his possession or with the knowledge of

<PAGE> 1

certain information, such as: magnetic stripe cards and PINs to transact
business at ATMs or point-of-sale terminals; passwords to log-on to a computer
or a computer network; keys, cards or passwords to enter the workplace; PINs,
passwords and account numbers to complete a commercial transaction on-line;
credit cards to make a credit purchase; time cards to begin work; and a
driver's license to write a check or transact business at a bank.

    However, these common verification methods generally cannot provide
positive identification.  Keys, credit cards, ATM cards and card keys can be
lost or stolen. Passwords, account numbers or other information used for
identity verification can be divulged to or intercepted by unauthorized users
through electronic means and otherwise. In the workplace, time-and-attendance
information can be improperly altered by an employee punching a time card for
a tardy or absent co-worker.

     Over the last decade, technological advances, including significant
advances in two-dimensional imagers, high performance microprocessors and
computer memory, have enabled the commercial development of equipment to read,
record and analyze unique biological data. Potential applications of biometric
identification and verification systems span a broad range and include
computer database and network access and security, computer software, intranet
and Internet security, electronic commerce, communications devices,
point-of-sale terminals, bank transaction authorization, facility access and
security, ATMs, time-and-attendance, home security and automobiles.

    However, implementation of biometric equipment for these diverse
applications may require network management software, customer-specific
applications software and interfaces that allow integration with the
customer's existing computer systems to provide complete biometric solutions.
Biometric Imaging Fingerprint images have emerged as an important means of
identification and verification in both government and civilian markets. In
law enforcement in particular, fingerprint identification is widely utilized
and has been accepted by courts around the world.

     Historically, fingerprints have been collected using the traditional
"ink-and-roll" process.  Typically, this process starts at the local law
enforcement agency where usually three or more complete sets of ink-and-roll
prints are taken, one for the local agency, one for the state and one for the
Federal Bureau of Investigation ("FBI").  The FBI reports that it currently
receives over 34,000 fingerprint cards each work day.  The fingerprint is then
compared at the local agency, state and/or FBI with a database of fingerprints
by means of an Automated Fingerprint Identification Systems("AFIS"), a
computer system developed in the 1970s which uses minutiae-based recognition
algorithms which detect fingerprint characteristics to accomplish fingerprint
matching.  Before the AFIS can make the comparison, an ink-and-roll card is
run through a scanner that creates a digital image of the fingerprint.  The
AFIS then compares the digital image with an existing database of fingerprints
to identify an individual if that individual's fingerprint is in the database
and, at the same time, updates the database with that fingerprint image.

<PAGE> 2

     While the advent of computerized AFIS systems significantly improved the
ability to compare fingerprints against large databases of fingerprints, the
manual process of collecting and mailing ink-and-roll cards to the agency that
maintains the AFIS and scanning the fingerprint image into the AFIS has led to
significant bottlenecks.  In addition, the fingerprinting process can be
complicated by a lack of cooperation of the person being fingerprinted, the
need to take multiple sets of prints and operator error. Cards can also be
rejected because prints are smudged or applied incorrectly.  If the FBI or
state agency rejects the card, the local agency is often required to locate
the individual, if possible, and have another set of fingerprints taken.  As a
result, the time between taking a set of fingerprints and receiving the
results of the search may take several days, several weeks or longer.

     Live-scan biometric imaging systems, which electronically capture and
digitize an image of the fingerprint directly from a person's finger, were
developed to replace the manual ink-and-roll process.  The digitized
fingerprint image captured by the live-scan system can then be compared with a
database of stored fingerprint images by an AFIS. If a state or federal agency
can receive electronic fingerprint cards, then the image can be electronically
relayed to that agency for comparison and the results can be returned to the
local agency within minutes or hours.  In addition, because the fingerprint
images are captured electronically, multiple cards can be printed from one set
of images, eliminating the need to roll the fingerprint numerous times.
Live-scan systems also generally have quality assurance features that help
reduce the chance of operator error during the fingerprinting process.

     A number of domestic and certain international law enforcement
communities are in the process of converting from manual ink-and-roll
fingerprint capture to live-scan fingerprint capture.  In the United States,
the FBI has undertaken a major program to upgrade its Identification Division
and in July 1999 announced that it has officially activated its new
identification facility in West Virginia to receive a majority of fingerprint
submissions electronically.  This announcement by the FBI, coupled with
increased automation at the federal and state levels, has prompted other
federal, state and local agencies to adopt live-scan systems as their primary
method for conducting background and identification checks.  Other federal
agencies, including Immigration and Naturalization Service ("INS"), Internal
Revenue Service, U.S. Drug Enforcement Agency, U.S. Marshals Service and the
U.S. Secret Service use live-scan systems to perform identification and
background checks.

     The ability to capture a forensic quality fingerprint image
electronically and compare that fingerprint with a database of fingerprint
images also has important civilian (non-law enforcement) applications, such as
conducting employee background checks (for jobs in federal or state
government, banking, airport, child care, stock brokers and other securities
professionals or gaming) or screening potential foster parents.  Millions of
fingerprint cards are taken each year in the United States for civilian
purposes. Traditionally, local police stations have performed this service,
with completed fingerprint cards submitted to state authorities or the FBI to
perform a background investigation. This process usually takes several weeks
to complete.  In addition, if an

<PAGE> 3

ink-and-roll fingerprint card is rejected, an applicant must go through the
process again, which can delay further an applicant's start date.  In some
cases, employers or agencies find themselves with such a backlog of applicants
awaiting fingerprinting or results of the background check that they allow
applicants to start the job without the background check being complete,
placing the employer at risk if an applicant has a criminal record. The need
for reliable and convenient fingerprint capture in a non-law enforcement
environment and the need to streamline the background checking process have
created a demand for live-scan products and fingerprinting services.

The Company's Position
----------------------

     In the mid-1990's, the Company worked with San Jose State University
Foundation and researchers at San Jose State University ("SJSU"), Department
of Modern Optics, to establish proof of concept (to prove that the Company's
theories could work) for its holographic fingerprint identity verification
technology.  This "work for hire" contract was to build working systems of the
Company's holographic verification technology and in doing so, the researchers
discovered and developed innovative fingerprint capture technology.

     The holographic verification technology refers to work on an optical
pattern recognition and correlation system employing "matched filters".  This
system utilizes laser beams to compare information or a pattern (i.e.
fingerprint image) stored in holographic film as a "filter" to information
obtained real time (i.e. a second scanned fingerprint image) and placed into
the laser beam to be "matched" with that filter. The Company believes this to
be the worlds' best-known recognition algorithm and the only one that produces
a yes or no answer.

     After building working systems on optical tables at San Jose State
University, researchers then built a compact "briefcase" size device to
perform continued testing.  During this testing it was discovered that the
device had a major flaw, namely that capturing "live-scan" fingerprint images
through a prism (common in most optical devices) created a distorted image
when compared to a filter captured using a flat plane impression similar to
ink-based print.

     The Company and SJSU researchers solved this by using a hologram or more
precisely a Holographic Optical Element (HOE) and placing this "grating" on
top of the prism to redirect the light and image in a flat plane or
undistorted manner directly onto the camera. This became the basis of the
company's live-scan fingerprint capture technology.  This discovery allowed
the capture of undistorted fingerprints optically and electronically that
could be compared directly to existing ink-based fingerprint records.

     This discovery was reported by SJSU researchers to the Optical Society of
America, and was featured on the cover of Applied Optics in September 1996.
The Company aggressively filed patent applications on this and other
discoveries resulting from the researchers' work.  Under the contract with
SJSU Foundation, the Company was assigned all discovery and patent rights,
with shares of the Company's stock being

<PAGE> 4

provided to SJSU Foundation upon the granting of any US Patent.  (See "Certain
Relationships and Related Transactions".)

     In January 1997, the Company licensed its patent pending fingerprint
capture technology to Hi-Key Technologies, Inc. ("Hi-Key") of Eden Prarie, MN,
for the manufacture of fingerprint capture units.  The Company delivered to
Hi-Key over 300 prisms containing Holographic Optical Elements for inclusion
in Hi-Key's access control product and HK-7 fingerprint scanner.  The Company
and Hi-Key delivered over 200 of these fingerprint capture products for use in
immigration, access control, and ID-card applications.  Hi-Key went out of
business in early 1998, and retained no rights or licenses to the Company's
technology.

     In 1997, the Company established its own facility for design,
pre-production and replication of holographic optical elements (HOEs) and for
long-term holographic technology research and development by acquiring the
equipment assets of Point Source Productions for $15,000 and assuming monthly
lease payments of $500 per month for approximately 900 square feet.  The
Company continued to prepare holograms at that facility with the help of Bob
Hess, its founder.  Mr. Hess was paid as a subcontractor and waived patent
rights in return for stock incentives.  Mr. Hess received approximately
400,000 shares of restricted common stock for waiver of those patent rights.
No additional patents have yet been filed from this work.

     In 1997 and 1998, the Company worked with SRI International (formerly
known as Stanford Research Institute) of Menlo Park, CA, for advanced
development of the Company's proprietary holographic fingerprint verification
and capture devices.  The initial project was further development of the
holographic verification technology, but this project was suspended to focus
on reducing to practice and developing a design-for-manufacture of the
Company's fingerprint capture product.

     The Company believed it could make a compact live-scan device using its
HOE-based technology for the capture of a single-digit (one finger or thumb)
fingerprint image that was compatible to images captured by ink and by those
of existing competitive optical prism-based live-scan single-digit fingerprint
capture devices made by Identix, Identicator, and Cross Match.

     SRI International assembled a highly qualified team of product design,
mechanical, electrical, and optical engineers who collaborated with the
Company's technical team.  In 1998 and 1999 the Company completed development
of engineering prototypes for sub-contractor manufacture of the Company's
initial APrinT  HoloPass .  Under this work-for-hire contract the Company was
to retain all patent rights in exchange for stock warrants.  No additional
patents have been filed from this work and the stock warrants have expired
without exercise.  (See "Certain Relationships and Related Transactions".)

     The Company built and delivered 40 of these devices to immigration, child
ID, and access control markets and contracted with Lex Solutions, Inc. of
Fairfax, VA, to

<PAGE> 5

develop complementary software which included search and match algorithms for
use in integration.  The Company was to have worldwide exclusive commercial
rights to the software, excluding the search and match software, which was to
be licensed through Cogent Systems.  The agreements expired in July 1998, with
the Company retaining no rights, due to lack of funds to exercise its option.
During these installations, it was determined that further enhancement of the
design was needed to meet the needs of the market, compete directly with
existing vendors and meet FBI Image Quality Standards for the electronic
transmittal of fingerprint images, something the Company believes the
competitors do not.

     In early 1998, the Company combined the initial HoloPass with a "smart
card" reader and related software to demonstrate the ability to secure a smart
card (a card containing a computer chip for storage of information) by placing
fingerprint information in the smart card about the enrolled user.  This
prototype also was intended to show how the initial HoloPass could be easily
integrated with OEM products.  The Company demonstrated this successful
implementation of fingerprints as unique "PIN" codes to protect smart cards to
prospective customers, channel partners, OEMs, and system integrators in
person and at major trade conferences such as CardTech/SecureTech (CTST) 98 in
Washington, D.C., and CTST 99 in Chicago, IL and CTST 2000 in Miami Beach, FL.

     In late 1998 and early 1999, the Company contracted with Newport
Corporation ("Newport") of Irvine, CA for enhancement and completion of
engineering blueprints and proposals for sub-contract manufacturing.  The
Company worked with Newport to develop additional prototypes demonstrating the
enhanced design.  The Company retained all intellectual property rights but
failed to reach a long-term manufacturing arrangement with Newport.

     The Company has successfully used these blueprints to subcontract key
components through multiple outside vendors and to build a refined HoloPass to
begin shipping to key vendors, system integrators, and end users in test
markets in law enforcement, access control and Photo-ID.

     In December 1999, the Company was selected as a test participant in the
Wireless Application Testing Program ("WATP") as part of the National Crime
Information Center ("NCIC-2000") program with the FBI located in Clarksburg,
WV.  The Company is to provide fingerprint capture devices for testing in
office, and in squad car (wireless) environments.  The FBI's goal is to make
this program available to state and local law enforcement agencies within the
next few years for instantaneous lookup of single-digit fingerprint images to
an ink-based database of most wanted felons.

     The Company is currently bringing to market this refined AprinT HoloPass
as its flagship product.  This device looks similar to a 35 millimeter camera
and produces high quality, single digit "plain" impression fingerprint capture
images.  This device is designed to electronically capture high resolution
(500 dots per inch) single-digit fingerprint images that can be compared
directly to ink-based prints for one-to-many

<PAGE> 6

"identification" or for enrollment of the user into a database for later
one-to-one verification against the database or to the image stored in a card.

     This device is designed to comply or exceed existing standards and
provide a standard video (RS-170) output consistent with existing installed
vendors.  By complying with standards and providing consistent high quality
images, the Company believes it will be plug compatible to Identix's Touchview
II, Identicator's DFR-90, and CrossMatch's Verifier 200, which combined
constitute a majority of existing installed high-end fingerprint capture
devices.  This compatibility allows any current or new user of a competing
system to "unplug" a competitive device in their system and transparently
replace it with the Company's device.

     The Company believes its philosophy of consistent high quality imaging of
the "full" single-digit fingerprint impression, ability to cost effectively
meet or exceed existing standards and "plug and play" capability for current
and emerging programs and applications, will create significant market share
in the rapidly emerging identity verification marketplace.

     The Company raised $2,365,000 of investment capital in the second quarter
of 2000.  This capital will allow the Company the opportunity to execute its
business plan, which includes the establishment of the Company's own
manufacturing facility for the mass production of this fingerprint capture
product by the end of the first quarter of 2001.  The Company believes that
these funds are sufficient to insure at least 12 months of operations and to
allow future revenue generation to finance further operations.

     The identity verification marketplace is rapidly emerging.  After six
years of developing innovative biometric identity verification solutions, the
Company believes that its solutions will be more reliable due to superior
image quality. See "Risk Factors- Competition".

     In the past, the Company has subcontracted all of its work to independent
contractors.  However, the Company now has a total of seven employees, five of
whom are full-time employees of the Company, and is not dependent on
subcontractors.

Patents and Trademarks
----------------------

     The Company holds one United States registered trademark, seven United
States Patents, and has one United States Patent Application Pending.  The
Company has received U.S. Registered Trademark Serial No. 75/044280 for the
label "AprinT" and has secured the Internet domain name "aprint.com".  Five of
the Company's seven United States Patents are effective for 20 years from
their respective filing dates, with two patents that were granted before 1995
effective for 17 years from their date of issuance, and are described below.

     U.S. Patent No. 6,111,671 filed November 18, 1999 and granted August 29,
2000, for Matched Filters for a Real Time Fingerprint Sensor and Verification
System.  The

<PAGE> 7
systems use innovative holographic optics to capture an undistorted
fingerprint image that can be compared directly to a previously loaded
ink-based print or "filter" that is stored as a hologram.

     U.S. Patent No. 6,002,499 filed May 9, 1997 and granted December 14, 1999
for Realtime Fingerprint Sensor and Verification System.  This patent offers a
laser-based optical correlation technology to verify fingerprints with those
stored as a hologram within the "matched filter" system.  The Company also has
a divisional patent application pending for "Jitter" system.

     U.S. Patent No. 6,038,043 filed March 10, 1997 and granted March 14, 2000
for Method for Recording a Holographic Optical Element.  This process patent
covers the method for making the holographic optical element ("HOE").

     U.S. Patent No. 5,892,599 filed August 9, 1996 and granted April 6, 1999
for Miniature Fingerprint Sensor Using a Trapezoidal Prism and a Holographic
Optical Element.  This patent uses an HOE to converge the output, thereby
shortening the focal length and allowing significant dimensional
miniaturization of the fingerprint capture device.

     U.S. Patent No. 5,629,764 filed July 7, 1995 and granted May 13, 1997 for
Prism Fingerprint Sensor Using a Holographic Optical Element.  This patent
uses a HOE to eliminate optical distortion in "live" fingerprint capture
technology.

     U.S. Patent No. 5,138,468 filed February 2, 1990 and granted August 11,
1992 for Keyless Holographic Lock.  This patent offers a laser-based
technology to verify fingerprints with those stored as a hologram in a
computer mouse or comparable device.

     U.S. Patent No. 5,095,194 filed October 12, 1989 and granted March 10,
1992 for Holographic Credit Card with Automatical Authentication and Approval.
This patent offers a laser-based technology to verify fingerprints with those
stored as a hologram on a credit card.

Risk Factors
------------

     Lack of Operating History
     -------------------------

     The Company has no history of operations, making it difficult to assess
the Company's future operating performance or future financial results or
condition.

     Unpredictability of Biometric Identity Verification Industry
     ------------------------------------------------------------

     The Company's success will depend on the growth of the Biometric Identity
Verification Industry.  Without the acceptance of the public and vendors, the
Company may be unable to achieve and sustain profitability.  The Biometric
Identity Verification Industry is a new and rapidly evolving industry whose
demand and market acceptance

<PAGE> 8

has yet come to full fruition.  Biometric products have not gained widespread
commercial acceptance.  The Company's business will most likely not grow
unless the market for biometric products expands both domestically and
internationally.

     Key Personnel
     -------------

     The Company has no employment contracts with any of its officers or
directors.  The Company's success depends on its executive officers and their
staying with the Company or, in the event they do not, retaining replacement
personnel with the commensurate experience and acumen.  The loss of services
of the Company's executive officers could adversely affect the Company.  In
addition, as the Company grows, it will need to attract additional key
personnel to sustain growth.  There is no assurance that the Company will be
able to attract sufficiently qualified personnel to fulfill the Company's plan
of operation.  The inability of the Company to attract qualified personnel
could adversely affect the Company.

      Competition
      -----------

      There are currently four major competing firms in the post research and
development manufacturing stage that offer "open system", single digit
scanners in the market.  One of these four firms, Identix, Inc., controls
approximately 85% of the market.  There can therefor also be no assurance that
the Company will be able to capture any significant portion of such market
share.  In addition, the biometrics market is in its very early stages and
growing rapidly.  There can therefor also be no assurance that new competitors
will not enter the market or that such new competitors will not have superior
technology to that of the Company.  Biometric security products also compete
with non-biometric technologies such as traditional key, card, surveillance
systems and passwords.

     Uncertainty Over the Company's Ability to Guard its Proprietary Rights
     ----------------------------------------------------------------------

     Although the key components and systems of the Company's devices are
protected by patents, there can be no assurance that others will not infringe
on those rights. The Company currently has limited resources and, therefore,
may not be able to adequately protect its intellectual property rights from
commercial piracy, both in the United States and internationally.

     Technological Changes
     ---------------------

      The Biometric Identity Verification Industry is a highly technical field
with numerous and frequent changes taking place at a rapid pace. The Company
is attempting to keep in step with such changes.  However, the Company's
business may be adversely affected by its competitors' development of enhanced
or improved technology.  The Company may lack sufficient financial resources
to undertake the revamping of its existing technology and equipment to stay in
competition with others.

<PAGE> 9

     Privacy Issues
     --------------

     Certain groups have publicly objected to the use of biometric products
for some applications on civil liberties grounds.  Legislation has been
proposed to regulate the use of biometric security products, which could limit
certain applications of biometrics including limitation of their use by
certain groups.  In the event that legislation is passed prohibiting or
restricting certain uses of biometrics, such legislation could have a material
adverse effect on the Company's business.

     Timing of Orders
     ----------------

     The Company's revenues and operating results may vary significantly from
quarter to quarter.  Because biometric identity verification devices tend to
be sold to organizations under contracts calling for the delivery of a
relatively large number of devices rather than on a unit by unit basis, most
of the Company's revenues will most likely be derived from a relatively small
number of large orders.  Accordingly, revenues in a particular quarter will
depend on the timing and size of major orders.

     Sales Cycle
     -----------

     Products in the biometric industry often have a lengthy sales cycle while
potential customers evaluate and receive approvals for purchase.  The Company
could suffer a severe negative impact if the Company fails to receive an order
for a product after expending significant funds and effort in an attempt to
secure an order.  If the Company fails to ship one or more large orders as
forecasted for a fiscal quarter, the Company's total revenues and operating
results for that quarter could be materially and adversely affected.

     Lead - Time
     -----------

     The lead-time for ordering parts and materials and building the Company's
products can be several months.  If demand for the Company's products lags
significantly behind what the Company has anticipated or forecasted, the
Company may produce more products than it can sell, which could result in cash
flow problems and write-offs or write-downs of obsolete inventory.

     Sufficient Cash to Sustain Operations
     -------------------------------------

     Although the Company recently raised over $2.3 million in equity
financing which the Company believes will be sufficient to fund operations for
at least the next 12 months, there can be no assurance that the Company will
have sufficient cash to sustain operations without obtaining additional
financing.  The Company's auditors expressed doubts as to the Company's
ability to continue as a going concern in their audit of the year ended
December 1999, prior to the Company's raising of over $2.3 million in equity
financing.  With this equity financing, the Company does not believe that the
Company's auditors will express such concerns in their audit for the year
ended December 2000.  If

<PAGE> 10

the Company is unable to fund operations from its own operations at the
conclusion of such 12 month period and the Company is unable to obtain
additional financing, the Company would be adversely affected materially and
significantly, to the point that the Company may not be able to  continue as a
going concern.

     Government and Public Agency Contracts
     -------------------------------------

     The Company anticipates deriving substantial revenue from government
contracts, which are often non-standard, involve competitive bidding and may
be subject to cancellation without penalty.  Government contracts frequently
include provisions that are not standard in private commercial transactions,
including bonding requirements.  Public agency contracts are frequently
awarded only after formal competitive bidding processes, which have been and
may continue to be protracted, and typically impose provisions that permit
cancellation in the event that funds are unavailable to the public agency.  In
addition, local government agency contracts may be contingent upon
availability of matching funds from state or federal entities.  Revenues
generated from government contracts are subject to audit and subsequent
adjustment by negotiation with representatives of the government agencies.

     Suppliers
     ----------

     The Company obtains certain components and complete products from a
variety of suppliers.  The Company does not have long-term agreements with any
suppliers.  Any delays resulting from suppliers failing to deliver components
on a timely basis in sufficient quantities and of sufficient quality or any
significant increase in the price of components from existing or alternative
suppliers could have a material adverse effect on the Company's business.

     International
     -------------

     The Company's growth may become dependent to some extent on the Company's
ability to make international sales.  There are certain risks inherent in
international commerce including regional economic conditions; export
restrictions; fluctuations in foreign currencies and the United States dollar;
loss of revenue, property and equipment from expropriation, nationalization,
war, insurrection, terrorism and other political risks; the overlap of
different tax structures; seasonal reductions in business activity; risks of
increases in taxes and other government fees; involuntary renegotiation of
contracts with foreign governments.

     Performance Failure
     -------------------

     The Company's products are complex and may contain undetected or
unresolved defects when sold or may not meet customer's performance criteria.
Performance failure may cause loss of market share, delay in or loss of market
acceptance, additional warranty expense or product recall.  The negative
effects of any failure could result in a material adverse effect on the
Company's business.

<PAGE> 11

     History of the Company
     ----------------------

     The Company was organized as a Nevada corporation as "Global Technology,
Ltd." in 1985.  In 1988 the Company changed its name to "Advanced Precision
Technology, Ltd." and merged with "Ximberley Corp.", a Utah corporation.
Neither the Company nor Ximberley Corp. had engaged in any business prior to
this merger.  In 1989 and 1990, the Company was engaged in the business of
environmental underground testing, which it abandoned after 1990.

      In November 1992 the Company acquired UV Color Corporation, a Minnesota
corporation, as a wholly owned subsidiary.  Pursuant to this acquisition, the
Company issued 2,200,000 shares of its common stock in exchange for all of the
issued and outstanding shares of UV Color Corporation.  The Company then
changed its name to "UV Color Corporation."

      In January 1993 the acquisition of UV Color Corporation was rescinded by
mutual agreement.  In June 1994 the Company filed a Certificate of Amendment
to its Amended and Restated Articles of Incorporation changing the Company's
name back to Advanced Precision Technology, Inc.

      The origins of the Company's fingerprint identity verification business
began in June 1993, when Bruce A. Pastorius and Dr. Joseph Barbanell founded
Holographics, Inc., a Nevada corporation.  On June 17, 1994, the Company
effected a one-for-four reverse split of its Common Stock and subsequently
issued 16,000,000 shares of Common Stock to acquire all of the issued and
outstanding shares of Holographics, Inc.

Item 2.  Plan of Operation.

     Over the next 12 months, the Company plans to enter the identity
verification market through manufacturing and directly distributing the
Company's high quality fingerprint capture product to established vendors
selling fingerprint capture to major government agencies and other large-scale
identification programs.  In support of this strategic plan, the Company has
developed ongoing relationships by demonstrating in person and providing
product to test, with leading industry experts, integrators, end users and
consultants.  Over the past 24 months, the Company has expended approximately
$500,000 on research and development.

     The Company has established new corporate offices and is in the process
of establishing production capabilities in a 9,686 square foot facility it has
leased in Livermore, California.  The Company believes that its location,
access to trained scientific and manufacturing personnel, and proximity to
affordable housing will assist in achieving the Company's business plan.

     The Company has and will continue to invest significant capital
expenditures in equipment, internal systems, and personnel to meet these
anticipated demands.  The

<PAGE> 12

Company is setting up clean room facilities with extensive optical equipment
including lasers, optical tables, and film processing workstations for the
manufacture of the HOE's.  The Company is installing computer networks, desks,
phone systems, and workstations for the internal operations.  The Company is
setting up manufacturing cells with fixtures, tools and related equipment and
ordering parts for an initial 2000 unit build.  The Company has hired a Chief
Financial Officer, Office Manager, Production Manager, Holographers, Quality
Control Specialists and Assemblers to build the team to assist in achieving
the Company's business plan.

      Major Markets of Interest
      -------------------------

      The Company is currently seeking or intends to seek sales contracts to
the following general categories of potential customers and applications: (1)
Law Enforcement Agencies, including the FBI, state, county and municipal
jurisdictions; (2) Civil Markets, including United States Immigration,
passport, military, state driver licenses, welfare fraud deterrence and
benefit entitlement; (3) Commercial Markets, including access control of
physical sites, access control of computers and databases, and security in
support of card based financial systems; and (4) International Markets,
including countries with national ID programs, border control, voter
registration, social benefits, and national health.

      Market Entry Strategy
      ---------------------

      Over the next 12 months, the Company's plan includes establishing
strategic partnerships with established vendors including Value Added
Resellers/Distributors (VARs), Original Equipment Manufacturers (OEMs), and
System Integrators (SIs).  Relationships with VARs would include nonexclusive
arrangements for target markets of interest wherein selected channel partners
have established relationships with large potential segments or higher margin
"niche" markets.  Relationships with OEMs would involve ATMs, point of sale,
time clocks, transit turnstiles, access control, and healthcare information
system vendors.  SIs would include large scale system providers such as IBM,
EDS, NEC, Unisys and similar companies.

      The Company developed its APrinT HoloPass  fingerprint capture devices,
which utilize high image quality by design and multi-channel distribution
system based upon the marketing experience and insights gained from over five
years of industry participation and internal market research.  The Company's
products have been engineered to provide high quality, consistent images, and
to achieve compliance with the strictest government and industry standards at
relatively low cost.  Government standards include "FBI IQS EFTS" and
"ANSI/NIST", each of which is described below.

       American National Standards Institute/National Institute of Standards
and Technology (ANSI/NIST) and Federal Bureau of Investigation Image Quality
Standards for the Electronic Fingerprint Transmission Standards, are standards
set forth by the respective agencies and include Geometric accuracy,
resolution, modulation transfer functions and grayscale as some of their
requirements.  Some government bids require

<PAGE> 13

them, and the Company plans to meet those standards.  Currently there is no
government agency providing certification for single-digit devices claiming to
meet those standards.

       By licensing and/or marketing under non-exclusive strategic agreements
with major corporations that are serving diverse target market segments, the
Company expects to reduce the higher business risks associated with
over-dependence on a single industry, or a single large customer, or a
specific geographic region.  In addition, the Company plans to work with
established security vendors in the access control/physical security
application markets in an effort to better access major corporations,
colleges, airports, hospitals, laboratories, government facilities, and
computer networks.

       These strategic relationships will not only provide the Company with
distribution outlets and generate demand for the Company's product, but will
also allow the Company to integrate software, hardware, and services provided
by the Company into its offerings to others, possibly creating additional
opportunities for revenues and profits.

       The Company is continuing to ship no charge test units to major
fingerprint software algorithm vendors, integrators, and vendors with existing
government contracts.  The Company is doing extensive travel to meet with
major federal agencies, participate in major trade events and standards
committees, and discuss potential distribution arrangements for the soon to be
built units.  The Company is seeking purchase orders for delivery starting in
the first quarter of 2001.

       The Company believes this strategy will complement the Company's
product marketing efforts with end users and system integrators for large
scale fingerprint capture/verification applications such as law enforcement,
military ID, driver licenses, passports, voter registration programs, computer
security/commerce and proposed electronic benefits transfer programs by state
and federal agencies.

        The Company has integrated its proprietary fingerprint capture devices
with complementary software for enrollment and verification.  Separately, it
also developed proprietary technology for transfer of captured fingerprints
into "smart" cards, for subsequent verification of the user's fingerprint at
the time the "smart" card is used. By meeting high government standards and by
initially focusing on market segments that are currently purchasing
fingerprint identity verification products, the Company expects to
conclusively establish its technology as one of the standards for the
industry.

      The Company's primary focus is existing government, industrial, and
commercial market segments requiring rapid, high-quality fingerprint
enrollment and identity verification in one-to-one and one-to-many
applications.  One-to-one applications include security access systems that
use an individual's unique fingerprint pattern to enter restricted access
locations, to access a specific computer or data, or "smart cards".
One-to-many applications include fingerprint identity verification database
comparisons for corporate employees, military personnel, suspected criminals,
prospective handgun purchasers, recipients of government welfare or
entitlement benefits, state licensed drivers, and foreign countries'
fingerprint identification programs.

<PAGE> 14

      The Company's marketing strategy consists of market penetration through
price performance leadership.  The Company anticipates that it will be selling
direct or through current market suppliers, system integrators, value-added
resellers, and international agents.  The Company intends to support its
marketing strategy with quality collateral material, targeted advertising, and
publicity campaigns.

       The Company is establishing its corporate office and production
facility to meet the anticipated demands of these marketing efforts.  The
Company is investing over $250,000 in capital equipment and facilities to
enable this effort.  The Company intends to significantly increase the number
of its employees by adding quality personnel in the areas of operations,
assembly, testing, engineering, and administration.

      The Company plans to do additional research and development into
improving and reducing the cost of all key components in the HoloPass device.
Additional projects are planned to add digital output, internal logic, and
wireless operations to the HoloPass product.

      The Company anticipates that its current funding will last for 12
months, and hopes to be operating profitably by the end of such 12 month
period.  The Company has placed funds into relative term certificates of
deposit and secured lines of credit.

Item 3.  Description of Property.

      The Company occupies approximately 9,686 square feet of office and
industrial space located at 2271-D South Vasco Road, Livermore, California
94550.  The Company pays rent of $6,180 per month.  The Company's lease
expires on May 31, 2003.

Item 4.  Security Ownership of Certain Beneficial Owners.

       The following table sets forth information relating to the beneficial
ownership of the Company's Common Stock by all persons beneficially holding
more than 5% of the Company's Common Stock, by each of the Company's executive
officers and directors, and by all of the Company's executive officers and
directors as a group.  None of the Company's officers or directors has any
rights to acquire any additional stock through any options, warrants, rights,
conversion privileges or similar obligations.  The addresses of each of the
executive officers and directors are in care of the Company.  All of the
persons listed below have sole investment and voting power unless otherwise
noted.

                                                 Percentage
Name of                    Number of             of Outstanding
Stockholder                Shares Owned          Common Stock
----------------------     ----------------      ---------------
Bruce A. Pastorius            13,100,000 (1)         24.2%
Chairman, Chief Executive
Officer and President

<PAGE> 15

James D. Homer                   485,000              0.9%
Secretary and Director

B. Eugene Waite                   10,000 (2)          0.1%
Director

Glenn Fishbine                    75,000              0.1%
Director

James P. Roake                 1,524,288 (3)          2.8%
Director

Diane M. Aldrich                       0              0.0%


All Executive Officers and    15,194,288             28.1%
Directors as a Group
___________________________________________________________________________
(1)   Includes 5,285,000 shares held by BAP Technologies, a dba of Mr.
      Pastorius, and 100,000 shares held by Holographics, Inc., each of which
      is controlled by Mr. Pastorius.  See "Certain Relationships and Related
      Transactions".  Also includes 1,050,000, the certificates for which
      state the owner to be Mr. Pastorius as custodian for shares in the names
      of Mr. Pastorius' children.  As custodian, Mr. Pastorius maintains
      voting control over such shares.

(2)   Mr. Waite owns these shares jointly with his wife Dolly.

(3)   Mr. Roake owns these shares jointly with his wife Ruth.

Item 5.  Directors, Executive Officers, Promoters and Control Persons.

     The members of the Board of Directors of the Company serve until the next
annual meeting of stockholders, or until their successors have been duly
elected.  The executive officers serve at the pleasure of the Board of
Directors.  Information as to the executive officers and directors of the
Company is set forth below.

Name                    Title
---------------------   -------------
Bruce A. Pastorius      Chairman, Chief Executive Officer and
                        President

James D. Homer          Secretary and Director

B. Eugene Waite         Director

Glenn Fishbine          Director


<PAGE> 16


James P. Roake          Director

Diane M. Aldrich        Director

     Bruce A. Pastorius.  Mr. Pastorius has been the Chairman of the Company's
Board of Directors, the Chief Executive Officer and President of the Company
since 1994.  Mr. Pastorius has approximately 20 years experience in direct
sales, sales management, product management, and marketing to commercial and
government agencies.  From 1993 to 1994, he was the President of Holographic
Credit Card, the assets of which were acquired by the Company in 1994.  From
1980 to 1993, he worked for SDI USA, Inc. of San Mateo, California, a producer
of system software for IBM Mainframes in various management positions with
responsibilities for marketing, sales, training, regional and national
accounts.  Mr. Pastorius received his Bachelor of Science degree in Business
Administration from the University of Minnesota.  Mr. Pastorius is 44 years of
age.

     James D. Homer.  Mr. Homer has been the Secretary and a Director of the
Company since 1995.  Mr. Homer has worked at the Western Area Channel
Operations of IBM since 1993, where he is responsible for developing the
area's Channel Business Unit, and leading the development, recognition, and
quality assurance functions for value-added resellers.  Mr. Homer received his
Masters of Business Administration degree with emphasis in Finance from the
University of Minnesota.  Mr. Homer is 43 years of age.

     B. Eugene Waite.  Mr. Waite has been a Director of the Company since
1995.  Mr. Waite has served as the Director of Finance for the City of Rio
Rancho, New Mexico since 1992.  From 1990 to 1992 Mr. Waite worked as a
Management Consultant.  From 1980 to 1989 he worked for Honeywell Avionics
Systems Division as Director of Contract Management and Director of Finance
and Controller.  Mr. Waite received his Bachelor of Science degree in Business
Administration from Duquesne University.  Mr. Waite is 69 years of age.

     Glenn Fishbine.  Mr. Fishbine has been a Director of the Company since
June 2000.  Mr. Fishbine has served as the Director of Information Systems for
Lake Region Manufacturing, Inc. since 1998.  From 1997 to 1998 he was a Senior
Consultant for Biometric Design, LLC where he developed a manufacturing plan
for holographic camera systems.  From 1985 to 1997 he was Senior Vice
President for Digital Biometrics, Inc., a company for which he was a
Co-Founder.  Mr. Fishbine received his Bachelor of Arts degree in Political
Science and Economics from the University of New Mexico, and his Masters of
Arts degree in Political Science from the University of Minnesota.  Mr.
Fishbine is 48 years of age.

      James P. Roake.  Mr. Roake has been a Director of the Company since June
2000.  Mr. Roake founded Roake Development in 1994, a construction and
development company.  In 1976, he founded Roake International, Inc., a small
fast food chain.  Mr.


<PAGE> 17

Roake remains the active head of both companies.  Mr. Roake received his
Bachelor of Science degree in Business Administration from Portland State
University.  Mr. Roake is 54 years of age.

      Diane M. Aldrich.  Ms. Aldrich has been a Director of the Company since
September 2000.  Ms. Aldrich has been a board member and managing partner of
four Internet companies, helping them achieve significant sales growth and
profitable operations.  Prior to that she was Vice President of a merchant
bank where she was responsible for capital financing, due diligence,
acquisitions and providing financial consulting and operation methodology with
respect to acquisition targets.  Prior to that she was Vice President of
Information Systems and Gaming Division at Digital Biometrics, Inc.  In 1986
she found Design Data, Inc., which developed state of the art imaging and
relational database software for governmental bodies nationwide for use in the
tracking of gangs and gang related activities.  The software was installed in
over 250 cities and agencies before being sold to Digital Biometrics, Inc.
Ms. Aldrich is 43 years of age.

Item 6.  Executive Compensation.

      The Company paid a salary to Bruce A. Pastorius, the Company's Chairman,
Chief Executive Officer and President, of $120,000 per year for each of 1998,
1999 and through May 2000.  In June 2000, Mr. Pastorius' salary was increased
to $150,000 per year.  Mr. Pastorius also has the beneficial use of a Company
owned automobile.  No officers of the Company other than Mr. Pastorius receive
annual compensation from the Company of $100,000 or more.  The Company's
directors receive no compensation for serving as directors of the Company.
The Company currently has seven employees.

Item 7.  Certain Relationships and Related Transactions.

      In March 1995, Bruce A. Pastorius (dba BAP Technologies) acquired all
rights, titles, and interests in U.S. Letters Patent Serial No. 5,095,194,
Holograhic Credit Card with Automatical Authentication and Verification, filed
October 12, 1989, and U.S. Letters Patent Serial No. 5,138,468, Keyless
Holographic Lock, filed February 2, 1990,  from Dr. Joseph Barbanell, the
inventor, and Gary Zellerbach and Dan Cifelli, assignees, for 2,140,000 shares
of the Company's common stock and other valuable consideration., including an
employment contract for Mr. Barbanell and $1 for all contracts.  This
acquisition was made by  Mr. Pastorius, using his personal stock and money, to
secure entire rights to these patents to insure the previous rights acquired
by Mr. Pastorius and assigned to the Company would not be diluted or sold to
any of the Company's competitors, to add the "Lock" patent to the intellectual
properties, and to insulate the development company from liability.

     In May 1996, Mr. Pastorius assigned these rights to the Company in return
for a promissory note of $250,000 and rights to 2,140,000 shares of the
Company to cover costs incurred by Mr. Pastorius in his acquisition of these
patents.  Proceeds to pay Mr. Pastorius were to be raised in a private
placement of preferred stock.  When such

<PAGE> 18

placement failed to generate sufficient funds to pay Mr. Pastorius, the note
was converted to a non-interest bearing long-term note, to be paid when ever
the Company raised sufficient funds to repay such note.  On September 30,
1998, the Board of Directors authorized the issuance of 2,140,000 shares of
the Company's Common Stock to BAP Technologies and extension of the note to
June 30, 1999.  On December 15, 1999, the Board of Directors authorized the
issuance of 3,125,000 shares of the Company's Common Stock to BAP Technologies
as repayment in full of the promissory note (an amount equal to the internal
value of the Company's common stock at that time divided by $250,000).  Mr.
Pastorius then completed all assignments of such patent rights to the Company.


      The Company did research and development work at San Jose State
University, Department of Modern Optics, through contracts with San Jose State
University Foundation.  While these contracts were work-for-hire contracts
wherein SJSU waived all intellectual property rights, the contract was amended
in 1996 to provide stock to San Jose State University Foundation for this
waiver.  A total of 650,000 shares of the Company's Common Stock were issued
for continuation of the work.  An additional 250,000 shares were to be issued
for each Letters Patent granted to the researchers and assigned to the
Company, of which the Company has issued 1,000,000 shares for four U. S.
Letters Patents.

       To date five United States Patents have been granted from this work at
SJSU.  Three such patents related to the fingerprint capture technology,
(United States Patent numbers 5,629,764, 5,892,599, and 6,002,499).  The
Company entered into another contract in May 2000 for further development work
on a miniaturized optical chip fingerprint device, for which the Company pays
$9,000 per month, and to which the Company receives patent rights for the
contracted work, at 250,000 shares per patent, except that of researcher
previous efforts while not under contract, to which the Company has exclusive
licensing rights.

       The Company did research and development work at SRI International.
Under the terms of the agreement, SRI was granted options to purchase 375,000
shares of the Company's common stock at an exercise price of $0.50 per share
until September 23, 1998, for waiver of all rights with the exception of
internal "shop" rights.  No patents were filed from that work.

Item 8.  Description of Securities

     The Company's Articles of Incorporation, as amended, authorize the
issuance of  one hundred million shares of Common Stock, par value $0.001 per
share, of which 54,071,077 were issued and outstanding as of June 30, 2000.
Holders of shares of the Company's Common Stock are entitled to one vote for
each share on all matters to be voted on by the stockholders of the Company.
Holders of shares of the Company's Common Stock have no cumulative voting
rights.  Holders of shares of the Company's Common Stock are entitled to share
ratably in dividends, if any, as may be declared, from time to time by the
Board of Directors in its discretion, from funds legally available therefor.
In the event of a liquidation, dissolution or winding up of the Company, the

<PAGE> 19

holders of shares of the Company's Common Stock are entitled to share pro rata
all assets remaining after payment in full of all liabilities.  Holders of
shares of the Company's Common Stock have no preemptive rights to purchase the
Company's Common Stock.  There are no conversion rights or redemption or
sinking fund provisions with respect to the Common Stock.  All of the
outstanding shares of the Company's Common Stock are fully paid and
non-assessable.

      The Company's Articles of Incorporation, as amended, authorize the
issuance of 25,000,000 shares of Preferred Class A Capital Stock, no par
value.  The Company has 1,250 shares of Preferred Stock outstanding, all of
which are fully paid and non-assessable.  The outstanding preferred stock is
non-voting and pays a 12% cumulative dividend payable in additional shares of
preferred stock.  The Company has the right, in its sole discretion, to redeem
the shares of preferred stock at any time at 110% of its face value ($110 per
share).  Each share of preferred stock is convertible, at the sole discretion
of the holders thereof, into 200 shares of the Company's Common Stock.  The
shares of preferred stock have a liquidation preference over the shares of the
Company's Common stock.  Holders of the preferred shares have no preemptive
rights.

                                   Part II

Item 1.  Market Price of and Dividends on the Registrant's Common Equity and
Related Stockholder Matters.

      The Company's Common Stock has been traded over-the-counter and quoted
on the OTC NASDAQ Electronic Bulletin Board under the symbol "APRE".  The
Company's Common Stock currently trades in the "pink sheets" because the
Company is not a full reporting company under the Securities Exchange Act of
1934, as amended.   The following table represents the range of the high and
low bid prices of the Company's Common Stock each calendar quarter of 1998 and
1999 and the first, second, third and fourth calendar quarters of 2000,
through November 28, 2000.  The source of the information below is the
National Association of Securities Dealers, Historical Quotes Department.
Such quotations represent prices between dealers and may not include retail
markups, markdowns, or commissions and may not necessarily represent actual
transactions.


                               High         Low
                               --------     --------
1998
----
  First Quarter                $1.875       $1.125
  Second Quarter               $1.75        $0.625
  Third Quarter                $0.6875      $0.34375
  Fourth Quarter               $0.50        $0.25

1999
----
  First Quarter                $0.50        $0.19
  Second Quarter               $0.27        $0.18
  Third Quarter                $0.51        $0.05
  Fourth Quarter               $0.40        $0.15

<PAGE> 20

2000
----
  First Quarter                $1.06        $0.25
  Second Quarter               $1.05        $0.59
  Third Quarter                $0.65        $0.25
  Fourth Quarter (through
     Nov. 28, 2000)            $0.40        $0.22

     As of November 22, 2000, there were 684 record holders of the Company's
Common Stock.

     The Company has not paid any dividends on its Common Stock and does not
intend to do so for the foreseeable future.

Item 2.  Legal Proceedings.

     The Company is not currently involved in any legal proceedings, the
outcome of which, in the view of the Company's management, would materially
affect the Company's operations.

Item 3.  Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.

      None.

Item 4.  Recent Sales of Unregistered Securities.

1997
----

     During the calendar year ending December 31, 1997, the Company issued
shares of Common Stock and Series A 12% Convertible Callable Preferred Stock
(the "Preferred Stock") as described below.  No issuance involved a public
offering or any general solicitation.  Each issuance was pursuant to exemption
from registration provided by Section 4(2) of the Securities Act of 1933, as
amended (the "Securities Act").

     In July, October, and December 1997, the Company issued a total of
499,000 shares of Common Stock for services rendered on behalf of the Company.
These shares were issued pursuant to the terms of the Company's relationships
with its subcontractors, calling for each of them to receive payment in stock
in lieu of cash for any over budget work at $0.25 per share, the same price as
in the private placement.  Services performed on behalf of the Company
included research and development, investor relations, camera development,
waiver of patent rights and legal fees.  Since these issuances did not involve
any public offering, they were exempt from registration under Section 4(2) of
the Securities Act.  None of the recipients of such stock were or are
affiliates of the Company.

     In October and December 1997, the Company issued a total of 2,450,000
shares of Common Stock as fees and repayment of collateral for loans to the
Company in the

<PAGE> 21

amount of $230,000.  None of the recipients of such stock were or are
affiliates of the Company.

     In February 1997, the Company issued 400,000 shares of Common Stock at a
price of $0.25 per share to two accredited investors, neither of which had any
other affiliation with or relation to the Company, with warrants attached
thereto to purchase 600,000 shares of Common Stock at $0.25 per share expiring
on June 30, 1997, all of which were exercised.  The shares were sold in a
private placement under Section 4(2) of the Securities Act with the price
being negotiated between the Company and the purchasers and was based on the
fact that the stock was restricted subject to Rule 144 of the Securities Act,
the Company's stock was thinly traded, and the Company was still a development
stage company.

     From April  to November 1997, the Company issued 2,250 shares of
Preferred Stock at $100 per share to accredited investors, with warrants
attached thereto.  None of these warrants were ever exercised and all have no
expired.  Each share was convertible into common stock at a ratio of 200
shares of common stock per share of Preferred Stock.  The terms of this
offering represented an approximate 50% discount to the price at which the
Company's Common Stock was trading.  This discount was due to the fact that
the shares of Preferred Stock were convertible into shares of restricted
common stock that, at that time, required a minimum holding period of two
years, as well as the risk inherent in a development stage company and the
fact that the Company's stock was thinly traded.  The shares were sold in a
private placement under Section 4(2) of the Securities Act.  None of the
purchasers of such stock were or are affiliates of the Company.

1998
----

     During the calendar year ending December 31, 1998, the Company issued
shares of Common Stock and Preferred Stock as described below. Each issuance
was pursuant to exemption from registration provided by Section 4(2) of the
Securities Act.

     In January 1998, the Company issued 100 shares of Preferred Stock at $100
per share to an accredited investor, with warrants attached thereto, none of
which were  ever exercised under the same terms and in the same offering as
the offering of Preferred Stock in 1997.  The purchaser was not and is not an
affiliate of the Company.

     In May, August, and December 1998, the Company issued a total of
4,024,000 shares of Common Stock for services rendered on behalf of the
Company. These shares were issued pursuant to the terms of the Company's
relationships with its subcontractors, calling for each of them to receive
payment in stock in lieu of cash for any over budget work at $0.25 per share,
the same price as in the private placement. Services performed on behalf of
the Company included research and development, investor relations, camera
development, waiver of patent rights and legal fees.  Included in these shares
are 2,140,000 shares issued to BAP Technologies.  See "Certain Relationships
and Related Transactions".  No other recipient of such stock was or is an
affiliate of the Company.

<PAGE> 22


     In February, March, May, June, August and December 1998, the Company
issued a total of 5,280,000 shares of Common Stock as fees and repayment of
collateral for loans to the Company in the amount of $542,560.  These loans
were negotiated between the Company and private parties and typically called
for the Company to repay the loans in stock at between $0.10 and $0.25 per
share plus interest usually at about 10% per annum if the Company did not
repay the loans within a specified period of time.  The price negotiated
included such factors as the fact that the stock was restricted subject to
Rule 144 of the Securities Act, the Company's stock was thinly traded, and the
Company was still a development stage company. None of the recipients of such
stock were or are affiliates of the Company.

1999
----

     During the calendar year ending December 31, 1999, the Company issued
shares of Common Stock as described below. Each issuance was pursuant to
exemption from registration provided by Section 4(2) of the Securities Act.

     In May, June, September and November of 1999, the Company issued a total
of 1,990,000 shares of Common Stock for services rendered on behalf of the
Company. These shares were issued pursuant to the terms of the Company's
relationships with its subcontractors, calling for each of them to receive
payment in stock in lieu of cash for any over budget work at $0.08 to $0.10
per share, the same price as in the private placement.  Services performed on
behalf of the Company included research and development, investor relations,
camera development, waiver of patent rights and legal fees.  Included in these
shares are shares issued to SJSU for waiver of certain patent rights as
described in "Certain Relationships and Related Transactions". None of the
recipients of such stock were or are affiliates of the Company.

     In February, June, September, November and December of 1999, the Company
issued a total of 5,477,000 shares of Common Stock as fees and repayment of
collateral for loans to the Company in the amount of $443,023. These loans
were negotiated between the Company and private parties and typically called
for the Company to repay the loans in stock at between $0.10 and $0.25 per
share plus interest usually at about 10% per annum if the Company did not
repay the loans within a specified period of time. Also included in these
shares are 3,125,000 shares issued to BAP Technologies.  See "Certain
Relationships and Related Transactions".  No other recipient of such stock was
or is an affiliate of the Company.

2000
----

     From January 1, 2000 to November 30, 2000, the Company issued shares of
Common Stock as described below.  Each issuance was pursuant to exemption from
registration provided by Section 4(2) of the Securities Act.

<PAGE> 23

     In May, June and July 2000, the Company issued a total of 7,166,666
shares of Common Stock sold to accredited investors only in a private
placement at $0.33 per share, raising total gross proceeds of $2,365,000.  The
price was negotiated between the Company and the purchasers and represented a
discount to the price at which the Company's Common Stock was trading during
that period.  The shares were sold pursuant to exemption from registration
under Section 4(2) of the Securities Act, in that the offering did not involve
a public offering.

     In March, May and June 2000, the Company issued a total of 1,224,000
shares of Common Stock for services rendered on behalf of the Company. These
shares were issued pursuant to the terms of the Company's relationships with
its subcontractors, calling for each of them to receive payment in stock in
lieu of cash for any over budget work at $0.10 per share, which price was
based on the fact that the stock was restricted subject to Rule 144 of the
Securities Act, the Company's stock was thinly traded, and the Company was
still a development stage company.  Services performed on behalf of the
Company included research and development, investor relations, camera
development, waiver of patent rights and legal fees.  None of the recipients
of such stock were or are affiliates of the Company.

     In March and June of 2000, the Company issued a total of 3,852,000 shares
of Common Stock as fees and repayment of collateral for loans to the Company.
These loans were negotiated between the Company and private parties and called
for the Company to repay the loans in stock at between $0.10 and $0.25 per
share plus interest usually at about 10% per annum if the Company did not
repay the loans within a specified period of time.  Loans were booked as such
on the Company's financial statements.  The stock price was based on the fact
that the stock was restricted subject to Rule 144 of the Securities Act, the
Company's stock was thinly traded, and the Company was still a development
stage company.  None of the recipients of such stock were or are affiliates of
the Company.

Item 5.  Indemnification of Directors and Officers.

     The Company indemnifies its officers and directors to the fullest extent
accorded under Nevada law, as set forth in the Nevada Revised Statutes
("NRS"), Sections 78.7502, 78.751 and 78.752, as amended.  In accordance with
NRS Section 78.7502, the Company may indemnify its officers and directors
against expenses they incur in connection with any threatened, pending or
completed legal action or proceeding involving Company, whether civil,
criminal, administrative or otherwise, involving such persons in their
capacities as officers and/or directors, so long as they acted in good faith
and in a manner which they reasonably believed to be in the Company's best
interests.  In accordance with NRS Section 78-7502(2), the Company does not
indemnify its officers or directors against expenses resulting from suits or
proceedings brought by or to assert a right of the Company in which the
officer and/or director is adjudged liable to the Company, unless a court
determines otherwise.

<PAGE> 24

     NRS Section 78.752 allows corporations to purchase and maintain insurance
policies or to make other financial arrangements on behalf of any current or
past officer and/or director for any liability asserted against him, and any
liability or expense incurred, arising out of his status as an officer and/or
director.  These financial arrangements may include trust funds,
self-insurance programs, guarantees and insurance policies.

<PAGE> 25
                                   Part F/S

     The following financial statements are included herein:

The Company's unaudited financial statements for the nine months ended
September 30, 2000 and September 30, 1999

            Unaudited balance sheet for the nine months ended September 30,
            2000 and 1999

            Unaudited statement of operations for the nine months ended
            September 30, 2000 and 1999, and cumulative during development
            stage

            Unaudited statement of cash flows for the nine months ended
            September 30, 2000 and 1999, and cumulative during development
            stage

            Notes to unaudited financial statements for September 30, 2000

The Company's audited financial statements as of December 31, 1999 and 1998

            Balance sheet for December 31, 1999 and 1998 (audited)

            Statement of operations for the years ended December 31, 1999,
            1998 and 1997, and cumulative during development stage (audited)

            Statement of changes in stockholders' equity (audited)

            Statement of cash flows for the years ended December 31, 1999,
            1998 and 1997, and cumulative during development stage (audited)

            Notes to financial statements for December 31, 1999 and 1998

<PAGE> 26
                     ADVANCED PRECISION TECHNOLOGY, INC.
                        (A DEVELOPMENT STAGE COMPANY)
                           UNAUDITED BALANCE SHEET
                              SEPTEMBER 30, 2000

               ASSETS
               ------

CURRENT ASSETS:
  Cash                                                    $     1,681,101
  Inventory (lower of cost or market)                              28,627
  Prepaid expenses                                                  6,125
                                                          ----------------
      Total Current Assets                                      1,715,853
                                                          ----------------
FIXED ASSETS, AT COST:
  Equipment                                                       240,668
  Furniture and fixtures                                           70,134
  Leasehold improvements                                           36,635
                                                          ----------------
                                                                  347,437
  Accumulated depreciation and amortization                       125,367
                                                          ----------------
                                                                  222,070
                                                          ----------------
OTHER ASSETS:
  Patents, at cost - net of accumulated
    amortization of $284,836                                    1,074,177
  Deposits                                                          3,685
                                                          ----------------

                                                                1,077,862
                                                          ----------------

                                                          $     3,015,785
                                                          ================

     LIABILITIES AND STOCKHOLDERS' EQUITY
     ------------------------------------

CURRENT LIABILITIES:
  Accounts payable                                        $        63,645
  Notes payable                                                    10,000
  Loans payable - stockholder                                      10,762
                                                          ----------------
      Total Current Liabilities                                    84,407
                                                          ----------------
STOCKHOLDERS' EQUITY:
  Preferred stock, $100 par value; authorized 25,000,000
    shares; 1,250 shares issued and outstanding                   125,000
  Common stock, $.001 par value; authorized 100,000,000
    shares, 54,071,077 issued and outstanding                      54,071
  Additional paid-in capital                                    6,541,649
  Accumulated deficit - December 31, 1992                        (258,205)
  Deficit accumulated during development stage                 (3,531,137)
                                                          ----------------
                                                                2,931,278
                                                          ----------------

                                                          $     3,015,785
                                                          ================
                                     F-2
<PAGE> 27

                     ADVANCED PRECISION TECHNOLOGY, INC.
                        (A DEVELOPMENT STAGE COMPANY)
                      UNAUDITED STATEMENT OF OPERATIONS

                                                               Cumulative
                                                               During
                                  9 Months Ended September 30, Development
                                        2000        1999       Stage
                                  ------------- -------------- -------------

REVENUES                                                       $     82,478
                                                               -------------
EXPENSES:
  Cost of goods sold                                                 28,049
  Research and development        $    193,700  $       8,420     1,350,999
  Marketing                             98,375         41,586       572,219
  Administrative                       222,444         82,490       909,718
  Officer salaries                     114,500         90,000       354,500
  Depreciation and amortization         67,855         76,886       398,130
                                  ------------- -------------- -------------

      Total Expenses                   696,874        299,382     3,613,615

NET LOSS                          $   (696,874) $     299,382  $ (3,613,615)
                                  ============= ============== =============

BASIC AND DILUTED LOSS PER SHARE  $       (.01) $        (.01)
                                  ============= ==============
WEIGHTED AVERAGE COMMON SHARES
 OUTSTANDING                        53,910,660     35,974,000
                                  ============= ==============


                                     F-3

<PAGE> 28

                     ADVANCED PRECISION TECHNOLOGY, INC.
                        (A DEVELOPMENT STAGE COMPANY)
                      UNAUDITED STATEMENT OF CASH FLOWS

                                                                Cumulative
                                                                 During
                                    9 Months Ended September 30, Development
                                         2000          1999      Stage
                                    ------------- -------------- ------------
CASH USED IN OPERATIONS:
  Net Loss                          $   (696,874) $    (299,382) $(3,531,137)
  Accumulated deficit of
    acquired company                                                (258,205)
  Depreciation and amortization           85,525         76,886
  Increase in inventory                  (16,289)        (4,000)     (28,627)
  Increase in prepaid expenses            (3,525)                     (6,125)
  Increase (decrease) in accounts
    payable                             (105,030)       (77,253)      63,645
  Increase (decrease) in accrued
    expenses                             (11,932)         7,406
  Increase (decrease) in due
    stockholder                          (87,993)        67,705       10,762
                                    ------------- -------------- ------------

      Net cash used in operations       (836,118)      (228,638)  (3,339,484)

CASH USED IN INVESTING ACTIVITIES:
  Investment in patents                 (111,611)       (37,000)  (1,359,013)
  Investment in fixed assets            (218,322)          (208)    (347,437)
  Deposit                                 (3,605)                     (3,685)
                                    ------------- -------------- ------------
      Net cash used in investing
       activities                       (333,618)       (37,208)  (1,710,135)

CASH PROVIDED BY FINANCING ACTIVITIES:
  Sale of preferred and common stock   2,965,466        205,002    6,720,720
  Contributed capital
  Notes payable                         (185,000)        76,000       10,000
                                    ------------- -------------- ------------
      Net cash provided by financial
       activities                      2,780,466        281,002    6,720,720
                                    ------------- -------------- ------------

INCREASE IN CASH AND EQUIVALENTS       1,610,730         15,156    1,681,101

CASH AND EQUIVALENTS BEGINNING
 OF PERIOD                               70,371           3,254

CASH AND EQUIVALENTS END OF PERIOD  $  1,681,101  $      18,410  $ 1,681,101
                                    ============= ============== ============



                                     F-4

<PAGE> 29

                     ADVANCED PRECISION TECHNOLOGY, INC.
                           (A DEVELOPMENT COMPANY)
                         NOTE TO FINANCIAL STATEMENTS



Note 1.   In the opinion of the management of Advanced Precision Technology,
Inc., the unaudited financial statements of Advanced Precision Technology,
Inc., for the interim periods shown include all adjustments, consisting only
of normal recurring accruals, necessary for a fair presentation of the
financial position at September 30, 2000, and the results of operations and
cash flows for the periods then ended.  The results of operations for the
interim periods shown may not be indicative of the results that may be
expected for the fiscal year.

Note 2.   During the year 2000, the Company issued 12,568,930 shares of its
common stock for $2,371,666 of cash, to pay off loans of $379,000 and loan
fees of $50,400, the cost of patents of $109,500 and consulting services of
$54,900.

                                     F-6
<PAGE> 30

                     ADVANCED PRECISION TECHNOLOGY, INC.

                             FINANCIAL STATEMENTS

                          DECEMBER 31, 1999 AND 1998


                                  (Revised)

                                 ARTHUR KORN
                         Certified Public Accountant


<PAGE> 31
                               <Letterhead of:
                               ARTHUR KORN, CPA
                            402 Hummingbird Place
                              Clayton, CA 94517
                              TEL (925)672-5200
                             FAX (925) 672-5201>


                        REPORT OF INDEPENDENT AUDITOR

Board of Directors
Advanced Precision Technology, Inc.

I have audited the accompanying balance sheet of Advanced Precision
Technology, Inc. (a development stage company) as of December 31, 1999 and
1998 and the related statements of operations, changes in stockholders' equity
and cash flows for each of the three years in the period ended December 31,
1999 and for the period January 1, 1993 (inception of development stage
activities) to December 31, 1999.  These financial statements are the
responsibility of the Company's management.  My responsibility is to express
an opinion on these financial statements based on my audit.

I conducted my audits in accordance with generally accepted auditing
standards.  Those standards require that I 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 amount and disclosures in the financial statements.  An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation.  I believe that my audit provides a reasonable basis
for my opinion.

In my opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Advanced Precision
Technology, Inc. at December 31, 1999 and 1998 and the results of operation,
and cash flows for each of the three years in the period ended December 31,
1999 and for the period January 1, 1993 (inception of development stage
activities) to December 31, 1999, in conformity with generally accepted
accounting principles.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern.  As discussed in Note 2, the Company
has been in the development stage since its inception and has sustained
recurring losses, has negative working capital and has not as yet commenced
operations.  These conditions raise substantial doubt about the Company's
ability to continue as a going concern.  Continuation as a going concern is
dependent upon the Company's ability to meet future financing requirements and
the success of its future operations, the outcome of which cannot be
determined at this time.  The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
Management's plan regarding future operations is also described in Note 2.


/s/ Arthur Korn CPA

Clayton, California
June 6, 2000

<PAGE> 32
                     ADVANCED PRECISION TECHNOLOGY, INC.
                        (A DEVELOPMENT STAGE COMPANY)
                                BALANCE SHEET

                                                      December 31,
                                                   1999         1998
                                              ------------- -------------
               ASSETS
               ------
CURRENT ASSETS:
  Cash                                        $     70,371  $      3,254
  Inventory                                         12,338         7,458
  Prepaid expenses                                   2,600             -
                                              ------------- -------------
      Total Current Assets                          85,309        10,712
                                              ------------- -------------
FIXED ASSETS:
  Equipment                                        129,115       126,827
  Accumulated depreciation                          97,447        62,301
                                              ------------- -------------
                                                    31,668        64,526
                                              ------------- -------------
OTHER ASSETS:
  Patents                                        1,247,402     1,169,469
  Accumulated amortization                         227,231       159,863
                                              ------------- -------------
                                                 1,020,171     1,009,606
                                              ------------- -------------

                                              $  1,137,148  $  1,084,844
                                              ============= =============
      LIABILITIES AND
      STOCKHOLDERS' EQUITY
      --------------------

CURRENT LIABILITIES:
  Accounts payable                            $    168,675  $    241,966
  Notes payable                                    195,000        45,000
  Accrued expenses                                  11,932         2,324
  Loans payable - stockholder                       98,755       283,627
                                              ------------- -------------
       Total Current Liabilities                   474,362       572,917
                                              ------------- -------------
STOCKHOLDERS' EQUITY:
  Preferred stock, $100 par value;
    authorized 25,000,000 shares;
    1,250 shares issued and outstanding            125,000       125,000
  Common stock, $.001 par value;
    authorized 100,000,000 shares,
    issued and outstanding:
    1999 - 41,502,147 shares
    1998 - 34,035,125 shares                        41,502        34,035
  Additional paid-in capital                     3,588,752     2,947,716
  Deficit accumulated during
    development stage                           (3,092,468)   (2,594,824)
                                              ------------- -------------
                                                   662,786       511,927
                                              ------------- -------------

                                              $  1,137,148  $  1,084,844
                                              ============= =============
See accompanying notes.
                                     -2-

<PAGE> 33

                     ADVANCED PRECISION TECHNOLOGY, INC.
                        (A DEVELOPMENT STAGE COMPANY)
                           STATEMENT OF OPERATIONS

                           Cumulative
                             During
                           Development
                             Stage
                           (Inception        Year Ended December 31,
                              1985)        1999         1998        1997
                          ------------ ------------ ------------ ------------

REVENUES                  $    82,478  $         -  $         -  $    82,478
                          ------------ ------------ ------------ ------------
EXPENSES:
  Cost of goods sold           28,049            -            -       28,049
  Research and development  1,157,299       68,179      352,801      507,884
  Marketing                   473,844       78,037      135,594      153,980
  Administrative              687,274      128,914      274,651      216,111
  President's salary          240,000      120,000      120,000            -
  Depreciation and
   amortization               330,275      102,514      101,838       84,916
  Losses from previous
   business incurred in
   1990, prior to
   development stage
   operations                 258,205            -            -            -
                          ------------ ------------ ------------ ------------
                            3,174,946      497,644      984,884      990,940
                          ------------ ------------ ------------ ------------

NET LOSS                  $(3,092,468) $  (497,644) $  (984,844) $  (908,462)
                          ============ ============ ============ ============

LOSS PER SHARE                         $      (.01) $      (.04) $      (.04)
                                       ============ ============ ============

WEIGHTED AVERAGE COMMON
  SHARES OUTSTANDING                    34,759,821   27,144,821   22,786,625
                                       ============ ============ ============


See accompanying notes.

                                     -3-

<PAGE> 34

                      ADVANCED PRECISION TECHNOLOGY, INC.
                        (A DEVELOPMENT STAGE COMPANY)
                 STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                                                     Deficit
                                                                     Accumulated
                                                        Additional   During
                                  Preferred   Common    Paid-In      Development
                                  Stock       Stock     Capital      Stage
                                  ----------- --------- ------------ ------------
<S>                               <C>         <C>       <C>          <C>
Issuance of 17,994,625 shares of
 common stock in 1985                      -  $ 17,995  $   240,210  $         -

No activity 1985 to 1989                   -         -            -            -
                                  ----------- --------- ------------ ------------
BALANCE DECEMBER 31, 1989                  -    17,995      240,210            -

Net loss from previous activity,
 prior to development stage
 operations                                -         -            -     (258,205)
                                  ----------- --------- ------------ ------------
BALANCE DECEMBER 31, 1990                       17,995      240,210     (258,205)

No activity 1990 to 1992                   -         -            -            -
                                  ----------- --------- ------------ ------------
BALANCE DECEMBER 31, 1992                  -    17,995      240,210     (258,205)

Contributions to capital                   -         -       36,579            -

Net Loss                                   -         -            -      (14,242)
                                  ----------- --------- ------------ ------------
BALANCE DECEMBER 31, 1993                  -    17,995      276,789     (272,447)

Contributions to capital                   -         -      108,828            -

Net loss                                   -         -            -      (93,495)
                                  ----------- --------- ------------ ------------
BALANCE DECEMBER 31,1994                   -    17,995      385,617     (365,942)

Proceeds from sale of 2,000,000
 shares of common stock                    -     2,000      199,536            -

Contributions to capital                   -         -       30,773            -

Net loss                                   -         -            -     (125,267)
                                  ----------- --------- ------------ ------------
BALANCE DECEMBER 31, 1995                  -    19,995      615,926     (491,209)

Proceeds from sale of 167,500
 shares of common stock                    -       167       36,113            -

650,000 shares issued in
 connection with patent rights             -       650      161,850            -

50,000 shares issued in
 connection with patent work               -        50       12,230            -

Net loss                                   -         -            -     (210,269)
                                  ----------- --------- ------------ ------------
BALANCE DECEMBER 31, 1996                  -    20,862      826,139     (701,479)

Proceeds from sale of stock          245,000     1,500      373,500            -

Shares issued as prepaid
 compensation                              -       285       70,965            -

Shares issued in payment of
 expenses, equipment and patents           -       584      151,416            -

Shares issued in payment
  of notes payable                         -     1,200      118,800            -

Preferred shares converted
  to common                         (140,000)      280      139,720            -

Net loss                                   -         -            -     (908,462)
                                  ----------- --------- ------------ ------------

BALANCE DECEMBER 31, 1997            105,000    24,711    1,680,540   (1,609,940)

Proceeds from sale of stock           20,000        20        9,980            -

Shares issued in payment of
 expenses, equipment and patents           -     1,864      179,636            -

Shares issued in payment
 of notes payable                          -     7,440    1,077,560            -

Net loss                                   -         -            -     (984,884)
                                  ----------- --------- ------------ ------------

BALANCE DECEMBER 31, 1998            125,000    34,035    2,947,716   (2,594,824)

Shares issued in payment of
  expenses, equipment and patents          -     1,990      198,013            -

Shares issued in payment of
  notes payable                            -     5,477      443,023            -

Net loss                                   -         -           -      (497,644)
                                  ----------- --------- ------------ ------------

BALANCE DECEMBER 31, 1999         $  125,000  $ 41,502  $ 3,558,752  $(3,092,468)
                                  =========== ========= ============ ============

See accompanying notes.


                                    -4-
</TABLE>
<PAGE> 35
<TABLE>
<CAPTION>

                    ADVANCED PRECISION TECHNOLOGY, INC.
                       (A DEVELOPMENT STAGE COMPANY)
                          STATEMENT OF CASH FLOWS

                                        CUMULATIVE
                                        DURING
                                        DEVELOPMENT
                                        STAGE
                                        (INCEPTION             Year Ended December 31,
                                        1985)            1999           1998         1997
                                        ------------ ------------- ------------- -------------
<S>                                     <C>          <C>           <C>           <C>
CASH USED IN OPERATIONS
  Net loss                              $(2,834,263) $   (497,644) $   (984,884) $   (904,462)
  Adjustments to reconcile net loss
   to cash used in operations:
     Depreciation and amortization          324,678       102,514       101,838        84,916
     Expenses paid with common stock        667,751        82,379       441,872       143,500
       Increase (decrease) in:
       Accounts receivable                        -             -        31,536       (31,536)
       Inventory                             12,338        18,266           765        (6,693)
       Prepaid expenses                       2,600       (68,650)       71,250             -
       Accounts payable                     168,675       (73,291)       98,824        72,180
       Accrued expenses                       2,324        (9,608)       (2,324)            -
       Due stockholder                      283,627       184,872       283,627             -
                                        ------------ ------------- ------------- -------------
NET CASH USED IN OPERATIONS              (1,768,908)     (261,162)     (524,750)     (642,095)
                                        ------------ ------------- ------------- -------------
CASH USED IN INVESTING ACTIVITIES
  Investments in patents                   (167,621)      (17,932)       (3,207)      (28,270)
  Equipment                                (120,615)       (2,288)      (31,602)      (66,960)
                                        ------------ ------------- ------------- -------------

NET CASH USED IN INVESTING ACTIVITIES      (288,236)      (20,220)      (34,809)      (95,230)
                                        ------------ ------------- ------------- -------------

CASH PROVIDED BY FINANCING ACTIVITIES
  Proceeds from issuance of common
    and preferred stock                     887,836             -        30,000       620,000
  Contributions to capital                  176,180             -             -             -
  Short term notes payable                1,063,499       348,499       495,000       138,000
                                        ------------ ------------- ------------- -------------
NET CASH PROVIDED BY FINANCING
  ACTIVITIES                              2,127,515       348,499       525,000       758,000
                                        ------------ ------------- ------------- -------------
NET INCREASE (DECREASE) IN CASH
  AND EQUIVALENTS                            70,371        67,117       (34,559)       16,675

CASH AND EQUIVALENTS,
  BEGINNING OF PERIOD                             -         3,254        37,813        21,138
                                        ------------ ------------- ------------- -------------

CASH AND EQUIVALENTS, END OF PERIOD     $    70,371  $     70,371  $      3,254  $     37,813
                                        ============ ============= ============= =============


See accompanying notes.
                                    -5-
</TABLE>
<PAGE> 36


                 ADVANCED PRECISION TECHNOLOGY, INC.
                    NOTES TO FINANCIAL STATEMENTS
                      DECEMBER 31, 1999 AND 1998


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

DEVELOPMENT STAGE COMPANY:

The Company is in the development stage since 1993 and is engaged in
developing the business of producing and marketing its patented fingerprint
capture device and its patented personalized identification cards, optical
approval devices and optical enrollment device for real time fingerprint
verification and authentication.

Prior to development stage operations, the Company was engaged in the business
of environmental underground testing, which it abandoned after 1990. In 1992,
the Company incurred administrative costs to reactivate the Company.

BUSINESS COMBINATIONS:

On June 17, 1994, the Company issued 16,000,000 shares of common stock, after
a 1 for 4 reverse split, for all of the common stock of Holographics, Inc.
This transaction was accounted for as a recapitalization, and, accordingly,
the financial statements include the accounts and operations of Holographics,
Inc. for all periods prior to the merger.

INVENTORY:

Inventory, which is all work-in-progress, is stated at the lower of cost,
determined on a first-in, first-out method, or market.

EQUIPMENT:

Equipment is stated at cost.  Depreciation is computed on a straight-line
basis over the estimated useful lives of three years. Depreciation expense of
$35,146 in 1999, $34,829 in 1998, $18,432 in 1997 and $97,447 cumulative
during development stage has been charged to operations.

PATENTS:

The cost to acquire patents is capitalized and amortized on a straight-line
basis over 17 years.  Amortization expense of $67,368 in 1999, $67,009 in
1998, $64,244 in 1997 and $227,231 cumulative during development stage has
been charged to operations.  The Company reviews patent costs for impairment
whenever events or changes indicate that the carrying amount may not be
recoverable.

RESEARCH AND DEVELOPMENT:

Research and development costs are expensed as incurred.

CASH FLOWS STATEMENT:

The Company considers investments purchased with a maturity of three months or
less to be cash equivalents.


                                 -6-
<PAGE> 37


                 ADVANCED PRECISION TECHNOLOGY, INC.
                    NOTES TO FINANCIAL STATEMENTS
                      DECEMBER 31, 1999 AND 1998


STOCK-BASED COMPENSATION:

Stock issued in exchange for goods or services is recognized at the fair value
of the consideration received.

Stock-based compensation issued to employees is recognized using the intrinsic
value method where the cost of compensation is measured by the excess of the
quoted market price of the stock over the option price on the date the number
of shares an employee is entitled to receive is known and the option or
purchase price is known.

USE OF ESTIMATES:

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

LOSS PER SHARE:

As of December 31, 1997, the Company adopted the provisions of Statement of
Financial Accounting Standards No. 128, Earnings Per Share (SFAS 128).  SFAS
128 provides for the calculation of basic and diluted earnings per share.
Basic earnings per share includes no dilution and is computed by dividing
income available to common stockholders by the weighted average number of
common shares outstanding for the period.  Diluted earnings per share reflects
the potential dilution of securities, including stock option and warrants,
that could share in the earnings of an entity.  Because the Company has a net
loss, dilutive earnings per share are the same as basic earnings per share.
As required by SFAS 128, all prior earnings have been restated to reflect the
retroactive application of this accounting pronouncement.  Adoption of SFAS
128 had no effect on previously reported earnings per share.

FAIR VALUE OF FINANCIAL INSTRUMENTS:

Statement of Financial Accounting Standards No. 107, Disclosures about Fair
Value of Financial Instruments, requires that the Company disclose the
estimated fair value for its financial instruments for which it is practicable
to estimate their values.  The Company's financial instruments include cash,
stockholder advances, notes payable and accounts payable.  The carrying value
of cash approximates fair value due to the short maturities of these
instruments.  The fair value of other financial instruments is not practical
to estimate because of the current financial condition of the Company.


NOTE 2 - FINANCIAL STATEMENT PRESENTATION

The financial statements have been prepared assuming the Company will continue
as a going concern.  Although the Company is still in the development stage,
management is currently negotiating to raise adequate financing to begin
production of its products.


                                 -7-
<PAGE> 38

                 ADVANCED PRECISION TECHNOLOGY, INC.
                    NOTES TO FINANCIAL STATEMENTS
                      DECEMBER 31, 1999 AND 1998


The Company's ability to continue as a going concern is dependent on
management's success in obtaining financing and the commencement of
operations.  See Note 8 for subsequent financing.

The Company's recurring losses and negative working capital raise substantial
doubt about the ability of the Company to continue as a going concern.  The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.

NOTE 3 - PATENTS

          Patent costs include the following:

Payments to a stockholder, principally with
stock, to purchase his patents, at the cost which
he paid to purchase them from a third party                   $  886,347

650,000 shares of Company stock issued to San
Jose State University Foundation in consideration
for patent work and a waiver of patent rights
developed under a work for hire contract                         162,500

Legal fees, Patent Office costs and payments of
cash and stock to consultants and subcontractors
for waiver of any patent claims                                  198,555
                                                             ------------
                                                             $ 1,247,402

NOTE 4 - NOTES PAYABLE

Notes payable at December 31, 1999 and 1998 represent three month promissory
notes with interest of 20%.  The notes are due through February 17, 2000.

NOTE 5 - LOANS PAYABLE-STOCKHOLDER

Loans payable-stockholder represent advances to and payment of expenses on
behalf of the Company made by the Company's president.  The loans are due on
demand and do not bear interest.


NOTE 6 - INCOME TAX

The Company has approximately $3,083,000 of Federal operating loss
carryforwards with expiration dates through the year 2014.

Since the Company is in the development stage and management cannot determine
that it is more likely than not the asset will be recovered, it has provided a
100% valuation allowance against the deferred tax asset resulting from its net
operating loss carryforwards.  Accordingly, no deferred tax asset is reflected

                                 -8-
<PAGE> 39

                 ADVANCED PRECISION TECHNOLOGY, INC.
                    NOTES TO FINANCIAL STATEMENTS
                      DECEMBER 31, 1999 AND 1998


in the accompanying financial statements.  There are no deferred tax
liabilities.

The deferred tax assets and valuation allowances are $1,048,000 at December
31, 1999 and $880,000 at December 31, 1998.

NOTE 7 - CASH FLOW STATEMENT

There were no cash payments for interest or taxes during the periods
presented.

NOTE 8 - LEASE COMMITMENT

The Company leases its office under a lease of less than one year.

Rent expense was $21,382 in 1999, $26,162 in 1998, and $2,394 in 1997.

NOTE 9 - PREFERRED STOCK

The Company's preferred stock is non-voting and pays a 12% cumulative dividend
payable in additional preferred stock.  The Company has the right to redeem
the preferred stock at 110% of the face value. In addition, each preferred
share is convertible into 200 shares of the Company's common stock.

NOTE 10 - STOCK WARRANTS

Each shareholder of preferred stock received Class A and Class B Common Stock
Purchase Warrants, 200 Class A and 200 Class B for each preferred share.  Each
A Warrant entitles the holder to purchase one share of common stock at $1.00
per share to February 28, 1998.  Each B Warrant entitles the holder to
purchase one share of common stock at $2.00 per share until August 31, 1998.
The options expired and none were exercised.

NOTE 11 - SUBSEQUENT EVENT

On May 16, 2000 completed a private placement to accredited individuals for
$2,365,000.

<PAGE> 40


                         PART III

Item 1.  Index to Exhibits.

     Exhibits 6.3, 6.4, 6.5, 6.6, and 27.1 are filed herewith.  Exhibit 6.1
was previously filed with Amendment No. 1 to the registration statement.  All
other exhibits required by Item 601 of Regulation S-B were previously filed
with the original registration statement:

Exhibit No.  Document Description
----------   ---------------------

2.1.1        Articles of Incorporation of Global Technology, Ltd., dated
             February 6, 1985

2.1.2        Articles of Amendment of Global Technology, Ltd., changing the
             name to "Advanced Precision Technology, Inc." dated April 11,
             1988

2.1.3        Amendment and Revised Articles of Incorporation of Advanced
             Precision Technology, Inc. changing the name to "UV Color
             Corporation" dated December 1, 1992

2.1.4        Certificate of Amendment of UV Color Corporation changing the
             name to "Advanced Precision Technology, Inc." dated June 9, 1994

2.2          Bylaws

6.1          Agreement and Assignment of Patents

6.2          Lease for 2271-D South Vasco Road, Livermore, CA 94550 dated May
             8, 2000

6.3          Software Development/License Agreement

6.4          San Jose State University Foundation Contracts, as amended

6.5          San Jose State University Foundation Sponsored Collaborative
             Research Documents

6.6          Independent Contractors Contract as between Advanced Precision
             Technology, Inc. and Robert Hess (including selected attachments
             and modifications)

<PAGE> 41

8.1          Agreement and Plan of Reorganization by and between Ximberley
             Corporation, Advanced Precision Technology, Inc. and Precision
             Tank Testing, dated March 21, 1988

8.2          Agreement and Plan of Reorganization by and between Advanced
             Precision Technology, Inc. and Holographics, Inc., dated May 27,
             1994, as amended

27.1         Financial Data Schedule

<PAGE> 42

                              Signatures

        Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the Registrant caused this Registration Statement to be signed on
its behalf by the undersigned thereunto duly authorized.

Dated:  December 4, 2000      ADVANCED PRECISION TECHNOLOGY, INC.


                                  /S/ BRUCE A. PASTORIUS
                              By:________________________________
                                      BRUCE A. PASTORIUS
                                      Chairman, Chief Executive Officer
                                      and President

                                  /S/ JAMES D. HOMER
                              By:________________________________
                                      JAMES D. HOMER
                                      Secretary and Director




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