COHESANT TECHNOLOGIES INC, 10KSB40, 2000-02-03

COHESANT TECHNOLOGIES INC
10KSB40, 2000-02-03
GENERAL INDUSTRIAL MACHINERY & EQUIPMENT

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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
(Mark One)
[X] Annual Report under Section 13 or 15(d)of the Securities Exchange
Act of 1934

For the fiscal year ended November 30, 1999
--------------------------------------------

[ ] Transition Report under Section 13 or 15(d) of the Securities Exchange
Act of 1934

For the transition period from to
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Commission file number 1-13484
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COHESANT TECHNOLOGIES INC.
----------------------------------------------------
(Exact name of Small Business Issuer in Its charter)

Delaware 34-1775913
--------------------------------- -------------------
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification No.)

5845 West 82nd Street, Ste. 102, Indianapolis, Indiana 46278
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(Address of Principal Executive Offices) (Zip Code)

Issuer's Telephone Number, Including Area Code: (317) 875-5592

Securities registered under to Section 12(b)of the Act: Common Stock, $.001 Par
Value registered on the Boston Stock Exchange

Securities registered under to Section 12(g)of the Act: Common Stock, $.001 Par
Value

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

Check if there is no disclosure of delinquent filers in response to
Item 405 of Regulation S-B contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [X]

State issuer's revenues for its most recent fiscal year. $14,191,450.

State the aggregate market value of the voting stock held by
non-affiliates computed by reference to the average bid and asked prices of such
stock, as of January 26, 2000. $5,623,348.

As of January 26, 2000, the Issuer had 2,336,733 shares of Common
Stock, $.001 par value, outstanding.

Documents incorporated by reference: Registrant intends to file with the
Securities and Exchange Commission a definitive Proxy Statement pursuant to
Regulation 14A of the Securities Exchange Act of 1934 within 120 days of the
close of its fiscal year ended November 30, 1999, portions of which document
shall be deemed to be incorporated by reference in Part III of this Annual
Report on Form 10-K from the date such document is filed.

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ITEM 1. BUSINESS

(a) General Development of Business
-------------------------------

Cohesant Technologies Inc. ("Company" or "Cohesant") is engaged in the
design, development, manufacture and sale of specialized two component spray
finishing and coating application equipment, replacement parts and supplies used
in the operation of this equipment and specialty two component epoxy coating and
grout products.

The Company's spray finishing and coating application equipment systems
are designed specifically for use with multiple component formulations such as
polyesters, polyurethanes, and epoxies. These equipment systems commonly are
employed in the construction, transportation and marine industries to apply
insulation, protective coating, sealant and anti-corrosive products and to
create packaging and to fill molds for diverse products such as recreational
boat hulls and construction products. The Company also maintains an extensive
inventory of replacement parts and supplies.

The Company manufactures the AquataPoxy and Raven lines of epoxy
coating and grout products. These high performance operator and environmentally
safe formulations provide protection from corrosion caused by infiltration,
atmospheric conditions and chemical attack. Although the Company believes there
are many more uses for the AquataPoxy and Raven products, they have most
prevalently been used in the construction, repair, rehabilitation and
maintenance of water and wastewater treatment, distribution and collection
systems, food & beverage, industrial and recreational facilities.

For the years ended November 30, 1999 and 1998, the Company had net
sales of $14,191,000 and $11,736,000, respectively, of which $11,876,000 and
$9,468,000, respectively, were for equipment systems, replacement parts and
supplies and $2,315,000 and $2,268,000, respectively, were for coating and grout
products.

The Company, which was organized in 1994, conducts business through its
subsidiaries, Glas-Craft, Inc. ("GCI"), an Indiana corporation, and Raven Lining
Systems ("Raven"), an Oklahoma corporation. As used herein, the term "Company"
includes the operations of Cohesant, and its wholly-owned subsidiaries GCI and
Raven, unless the context indicates otherwise.

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(b) Narrative Description of Business
---------------------------------

PRODUCTS

Specialized Spray Equipment. The Company designs and manufactures a wide range
of spray and application equipment systems and supplies to spray multi-component
formulations such as fiberglass reinforced plastics and polyurethane foam. Net
sales of spray equipment systems amounted to $6,263,000 and $4,472,000 for the
fiscal years ended November 30, 1999 and 1998, respectively, representing 44.1%
and 38.1%, respectively, of net sales. A significant portion of the Company's
equipment business is the sale of replacement and spare parts and supplies for
its current and discontinued spray equipment systems. The Company maintains an
inventory of approximately 6,100 items to enable it to efficiently fill orders
and service repairs. Net sales of replacement and spare parts and supplies
amounted to $5,613,000 and $4,996,000, representing 39.6% and 42.6% of net sales
for the fiscal years ended November 30, 1999 and 1998, respectively.

Fiberglass reinforced plastic spray equipment. The predecessor to GCI
developed spray and applications equipment systems for the modern method of
fiberglass reinforced plastic product manufacturing known as the `spray up'
method. The spray up manufacturing process is quicker and more cost effective
than the `hand layup' and mass production molding methods of reinforced
fiberglass products manufacturing and can be used to manufacture a wide variety
of products, including such diverse products as boat hulls and construction
components. The spray up method is ideally suited for small quantity and custom
production.

The United States Occupational Safety and Health Administration
("OSHA") and environmental regulatory agencies in the United States and abroad
regulate the use of various volatile organic chemicals ("voc's") such as
styrene, acetone, methylene chloride and organic peroxides. These chemicals are
often used in the process of fiberglass manufacturing. GCI's spray equipment
systems use air assist containment ("AAC") to reduce spray emissions and
overspray and increase transfer efficiency and spray control. Improved
containment limits emissions of environmentally and occupationally hazardous
chemicals. Greater transfer efficiency results in less waste of product. GCI is
developing new products with non-atomized dispense capabilities that further
reduce voc's. These products include a new internal mix gun with Flowcoat or
V-Force nozzles.

Other multi-component spray equipment. The Company also designs and
manufactures spray and applications equipment systems for dispensing
polyurethane and other multi-component materials

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and coatings. Polyurethane is used for insulation, packaging, flotation devices
and many other uses. Foams are used for insulation and protective coatings and
for the manufacture of formed plastic products such as automobile and aircraft
components and marine products. The Company's technology has many applications
in the plastics and coatings industries. Consequently, the Company continuously
seeks and develops new and different uses for its equipment. The Company, when
necessary, will modify existing equipment designs or will design new equipment
to meet the requirements of new plastics and other products as well as changing
regulation and manufacturing methods.

Raven Lining Systems

Raven produces products under the Raven and AquataPoxy brands.
AquataPoxy and Raven product brands utilize proprietary formulations of and
application methods for solvent-free coatings and grouts that contain no
volatile organic compounds ("VOC's"). As with GCI, Raven benefits significantly
from increasing government regulation of VOC's and the resulting trend towards
low VOC products. Additionally, Raven fulfills specifying engineer's desires for
manufactured certified professional applications.

AquataPoxy Products. The AquataPoxy line of solvent-free epoxy coating and
grout products is designed to extend the life of a structure by protecting it
from corrosion. These products are formulated with higher performance
characteristics compared with competitive products, including excellent
resistance to moisture, corrosion and chemical attack. AquataPoxy products are
used in the construction, repair, rehabilitation and maintenance of food
processing and water storage structures, waste water treatment and collection
systems of municipalities, industrial and recreational facilities. AquataPoxy
products are unique with their high moisture tolerant characteristics that allow
them to be applied to underwater and moisture filled concrete surfaces.
AquataPoxy is ideally suited for the rapidly growing market in underground
rehabilitation of infrastructure. AquataPoxy is therefore being specified for
use by many leading consultants, design engineers and governmental agencies in
connection with the rehabilitation of potable and/or wastewater facilities by
trained applicators. The Company is aggressively demonstrating and testing
AquataPoxy to expand awareness of its unique attributes and the application and
marketing benefits of its certified applicator program.

AquataPoxy products contain no solvents or VOC's. Properly applied,
AquataPoxy products are inert once cured and do not release harmful by-products
into air, water or the environment. Conversely, competitive solvent-borne and
isocyanate-based coatings have the potential to release carcinogens and other

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hazardous substances into the environment and generally are not desirable for
applications that involve contact with food, drinking water, animals or people.
The Company maintains certification under the National Sanitation Foundation
Standard 61 and meets qualifications of the United States Department of
Agriculture for agricultural applications, food processing and potable water
facilities and marine environments.

Raven Products. Raven extends the Company's presence in the protective coating
and lining marketplace. Raven's unique high performance line of products and
network of Certified Applicators provide access to specialty coating contractors
and key end-users in the wastewater, pulp and paper, petrochemical, power and
other industries. Raven's sprayable epoxies were formulated for ultra high-build
(20-250 mils per coat) application on concrete, masonry and steel surfaces
providing protection from atmospheric and chemical corrosion. The high physical
strengths of some Raven formulations permit the epoxy to enhance the structural
integrity of damaged structures. Raven products can be quickly applied under
harsh environmental conditions providing quick return to service and substantial
savings for industrial facilities by lessening downtime. The life span of the
infrastructure exposed to these conditions can increase dramatically with the
use of high performance protective coatings and linings such as Raven.

Raven coatings and grouts are also solventless, nontoxic, 100% solids
epoxy products, emitting no VOC's. These products offer safe working
environments while complying with the existing United States Environmental
Protection Agency ("EPA") regulations.

Net sales of AquataPoxy and Raven products amounted to $2,315,000 and
$2,268,000, representing 16.3% and 19.3% of net sales for the fiscal years ended
November 30, 1999 and 1998, respectively.

RTM Systems, Inc.

GCI has a one-third interest in RTM Systems, Inc. ("RTM"), an Indiana
corporation organized in 1989. RTM markets equipment which produces injection
molded fiberglass reinforced plastic products. The RTM equipment is designed for
low-pressure injection molding, thereby allowing injection of catalyzed resin
under low pressure into a closed mold containing a pre-cut fiberglass mat which
strengthens the finished product. This method, like most molding processes,
permits the resin to displace all of the air in the mold, completely saturating
the fiberglass mat which is then allowed to cure. Products manufactured using
this process are characterized by the strength enhancing properties of
fiberglass while being cost effectively produced. RTM also sells products and
equipment used to build molds.

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MARKETING

Distributors and Certified Applicators

The Company's products are sold through a growing network of
independent distributors and Certified Applicators in the United States and
overseas.

Generally, the products of GCI are sold through over 100 independent
domestic and foreign equipment distributors. Most of these distributors are
engaged in the sale of polyester resins and gel coats, fiberglass strand and
mat, polyurethane foams and coatings and similar items. Many of the foreign
distributors sell only industrial equipment. For the fiscal years ended November
30, 1999 and 1998, GCI's ten largest distributors accounted for 44% and 46%,
respectively, of equipment system and replacement and spare parts sales. Of the
foregoing, four of the distributors in fiscal 1999 and 1998 were foreign based.
GCI provides training to the distributors and customers in the use of its
equipment systems and products.

Raven markets its products, application and spray technology through
domestic and foreign independent distributors, manufacture representatives and
Certified Applicators. Raven presently has twenty-nine domestic Certified
Applicators, an increase of 45% over the number of domestic Certified
Applicators last year. These Certified Applicators serve over thirty-five
states.

Brochures, Advertising and Trade Shows

The Company supports its marketing with internally prepared brochures,
sales catalogues, direct mailings and media insertions in various trade
publications. In connection with coating and grout products, the Company also
prepares media promotion kits and product demonstration kits for use by
Certified Applicators and distributors. Company personnel, representatives and
distributors attend trade shows in the United States and overseas. Typically,
these shows are attended by potential customers and distributors. In addition,
these shows afford the Company the opportunity to keep abreast of its
competitors' products and developments in the industry. Company personnel also
participate in various industry organizations and work with complimentary
technologies to present educational and technical seminars. These seminars
assist in industry growth and guides prospective customers to the Company's
products and methods.

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MANUFACTURING AND RAW MATERIALS SUPPLY

The Company assembles its equipment system products from commercially
available components and components manufactured to specification by a variety
of vendors. Minimal fabrication of components is performed by the Company. The
Company is not dependent upon any single vendor for the conduct of its business,
and generally has alternative sources for all necessary components.

Similarly, there are a number of alternative sources of the raw
materials used in the manufacture of the coating and grout products of the
Company. The Company maintains good working relationships with all major resin
suppliers. The Company does not believe that it is dependent on any one vendor
of raw materials for its coating and grout products and the Company does not
believe the loss of any one supplier would have a material adverse impact on the
Company.

COMPETITION

The markets for all of the Company's products are highly competitive.
The Company competes with numerous well-established companies, most of which
possess substantially greater financial, marketing, personnel and other
resources than those of the Company.

There are a number of competitive equipment manufacturers, which
include the Binks division of Illinois Tool Works, Inc. and Venus-Gusmer, Inc.
Competitors of the Company's AquataPoxy and Raven products include Carboline
Company, Tnemec Company, Inc. and International Protective Coatings. The Company
competes by continually broadening awareness of its unique products through
engineering, research and development, by continuing to offer its entire product
line on a price competitive basis, and through product line extensions.

The markets for the Company's products are characterized by changing
technology and industry standards. Accordingly, the ability of the Company to
compete is dependent upon the Company's ability to complete development and
effectively market its state-of-the-art equipment and coating products.

RESEARCH, DEVELOPMENT AND ENGINEERING

The Company has a research and development program to continually
improve all of its existing products, to develop new products and to custom
engineer equipment and products to meet specific customer requests. The Company
has thirteen full-time employees devoted to engineering, research and
development.

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Virtually all of the products marketed by the Company were developed internally,
either by the Company or its predecessor companies. Research, development and
engineering expenses for the fiscal years ended November 30, 1999 and 1998 were
approximately $970,000 and $832,000, respectively, or 6.8% and 7.1%,
respectively, of net sales. The Company expects this level of research,
development and engineering expense to continue or slightly increase in the
future.

GOVERNMENT REGULATION

The Company is subject to regulations administered by the EPA, OSHA,
various state agencies, county and local authorities acting in cooperation with
Federal and state authorities and foreign governmental regulatory agencies.
Among other things, these regulatory bodies impose restrictions to control air,
soil and water pollution, to protect against occupational exposure to chemicals,
including health and safety risks, and to require notification or reporting of
the storage, use and release of certain hazardous chemicals and substances. The
extensive regulatory framework imposes significant compliance burdens and risks
on the Company's operating subsidiaries. Governmental authorities have the power
to enforce compliance with these regulations and to obtain injunctions or impose
civil and criminal fines in the case of violations.

The Company has in place programs to achieve and maintain substantial
compliance with the currently existing environmental and worker exposure laws
and regulations which materially affect the Company's continuing businesses. As
of the date of this Report, based on its experience and consultations with
environmental consultants, management believes that the Company is taking or has
taken all necessary measures to comply with all applicable Federal, state and
local environmental laws and regulations and worker exposure regulations.

As a product exporter, the Company is subject to regulation by foreign
governments. There can be no assurance that the Company will be in compliance
with or achieve compliance with laws and regulations enacted by foreign
government in the future.

PATENTS, TRADEMARKS AND PROPRIETARY INFORMATION

The Company holds eight U.S. patents and three U.S. patent
applications, of which five patents are applicable to AAC(R) methods and
apparatus of the Company. The Company's AAC(R) methods and apparatus use a flow
of compressed air to contain and reduce over spray and vapor emissions and
increase transfer efficiency and spray control.

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The Company believes that product recognition is an important
competitive factor in the equipment and chemical industries. Accordingly, the
Company promotes the "GLAS-CRAFT" and "RAVEN" trademarks in connection with its
marketing activities and holds a United States trademark registration for
AAC(R).

The Company also relies on proprietary know-how and confidential
information and employs various methods to protect the processes, concepts,
ideas and documentation associated with its products.

EMPLOYEES

As of January 17, 2000, the Company employs approximately 68 full time
persons, 15 of whom are in sales, 8 are in engineering, 7 are in research and
development and service, 4 are in quality control, 23 are in manufacturing and
11 are in accounting and administration. The Company believes its relations with
its employees are good.

ITEM 2. PROPERTIES

The Company's executive offices are located in Indianapolis, Indiana,
with its principal manufacturing, warehouse and distribution facilities located
in Indianapolis, Indiana and Tulsa, Oklahoma. GCI leases approximately 51,200
square feet of office, manufacturing and warehouse space in Indianapolis,
Indiana through January, 2004. Raven leases approximately 14,400 square feet of
combined office and manufacturing space in Tulsa, Oklahoma through April, 2002.
The Company believes its facilities are adequate to meet its current and
prospective needs.

ITEM 3. LEGAL PROCEEDINGS

There are no pending legal proceedings to which the Company is subject,
nor to the knowledge of the Company are any legal proceedings threatened, other
than for ordinary, routine proceedings incidental to its business, except as
follows:

A former employee of American Chemical Company ("ACC"), a subsidiary of
the Company, the operations of which were discontinued in 1997, filed a workers'
compensation claim related to injuries incurred in connection with the August
1996 fire at the St. Louis facility. In the claim, the employee requested
additional compensation, claiming ACC violated a Missouri safety statute in
connection with the occurrence of his injury. This matter was settled during
1999 by the insurance company.

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

No matters were submitted to a vote of the Company's stockholders
during the fourth quarter of the fiscal year ended November 30, 1999.

ITEM 4.1 EXECUTIVE OFFICERS OF THE REGISTRANT

This information is included in this Report pursuant to Instruction 3
of Item 401(b) of Regulation S-K. The following is a list of the executive
officers of the Company and a brief description of their business experience.
Each executive officer will hold office until his successor is chosen and
qualified.

MORTON A. COHEN has been Chairman of the Board since the Company's
inception in July 1994, and served as the Company's Chief Executive Officer from
July 1994 to January 1998. Mr. Cohen has been Chairman of the Board of Directors
and Chief Executive Officer of Clarion Capital Corporation ("Clarion"), a
private, small business investment company, for more than five years. He is also
a director of Zemex Corporation, an industrial minerals company and DHB Capital
Group, Inc., a holding company with a diversified portfolio. Mr. Cohen is the
father-in-law of Morris H. Wheeler, a director.

DWIGHT D. GOODMAN has been a Director of the Company since its
inception and has been the Chief Executive Officer of the Company since January
1998 and President of the Company since July 1996. From May 1996 until June
1998, Mr. Goodman had been the Chief Financial Officer; from May 1996 until July
1996, Mr. Goodman had been the Company's Executive Vice President and Chief
Financial Officer. Mr. Goodman had been the President and Chief Executive
Officer of GCI from 1984 to 1996.

RICHARD A. MORDARSKI has been an executive officer of the Company since
June 1998 and has been President of GCI since May 1996. Prior thereto, Mr.
Mordarski served for 15 years as Director of Marketing of GCI.

J. STEWART NANCE has been an executive officer of the Company since
June 1998 and has been President of Raven since December 1995. Mr. Nance was
part owner and President of Raven Management Services Inc., from whom the assets
of Raven were acquired, from 1992 to 1995.

ROBERT W. PAWLAK has been Vice President-Finance and Chief Financial
Officer of the Company since June 1998, Secretary of

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the Company since June 1997 and Controller of the Company since October 1996.
Mr. Pawlak held various accounting positions for GCI since March 1994.

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDERS MATTERS

The Common Stock of the Company is quoted on NASDAQ under the symbols
"COHT". The Company's Common Stock is also listed on the Boston Stock Exchange.

The following table sets forth the high and low closing bid prices of
the Company's Common Stock for each quarter in the two year period ended
November 30, 1999, as reported by NASDAQ. Bid quotations represent high and low
prices quoted between dealers, do not reflect retail mark-up, mark-down or
commission, and do not necessarily represent actual transactions.

<TABLE>
<CAPTION>
COMMON STOCK Bid Price
- ------------ ---------
High Low
---- ---
<S> <C> <C>
Year Ended November 30, 1998
----------------------------
First Quarter $1.75 $1.0312
Second Quarter 2.344 1.406
Third Quarter 2.344 1.75
Fourth Quarter 1.922 1.375

Year Ended November 30, 1999
----------------------------
First Quarter $2.063 $1.50
Second Quarter 2.00 1.25
Third Quarter 2.563 1.50
Fourth Quarter 2.75 1.938
</TABLE>

In October 1998 the Company announced a share repurchase program. The
Company completed purchases under the program in April 1999. The Company
repurchased 413,500 shares for $729,807. In December 1998 the Company sold
61,890 shares out of treasury to the Company sponsored 401(k) plan for $101,351.

On January 17, 2000, the Company had approximately 540 beneficial
holders of its Common Stock.

The Company has not paid any cash dividends on its Common Stock to date
and does not anticipate paying any in the foreseeable future. The Board of
Directors intends to retain earnings, if any, to support the growth of the
Company's business.

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ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

RESULTS OF OPERATIONS

Fiscal Year Ended November 30, 1999 as compared to Fiscal Year Ended
November 30, 1998

Net sales for the fiscal year ended November 30, 1999, were $14,191,000
representing an increase of $2,455,000 or 20.9%, from fiscal 1998 net sales of
$11,736,000. The increase consisted of a $2,408,000 or 25.4% increase in net
sales of equipment systems and parts to $11,876,000 in fiscal 1999. This
increase was attributable to additional sales of polyurethane and private label
equipment. Domestic and foreign equipment and parts net sales were up 37% and
11%, respectively, compared to fiscal 1998. The increase in foreign sales was a
result of higher sales to the Asia/Pacific Region, Europe and Canada, partially
offset by decreased sales to South America. Specialty coating and grout products
net sales increased slightly to $2,315,000, a $47,000 or 2.1% increase from
fiscal 1998 net sales.

For the fiscal years ended November 30, 1999 and 1998,respectively,
gross margins as a percentage of net sales were 44.1% and 43.9%, respectively.
The slight increase in gross margin in fiscal 1999 was due to increased sales of
polyurethane systems and parts, as well as increased sales of private label
systems which tend to have lower margins than standard system sales.

Research, development and engineering expenses were approximately
$970,000 and $832,000 for the fiscal years ended November 30, 1999 and 1998,
respectively. This increase of $138,000, or 16.6% was primarily attributable to
higher personnel costs.

Selling, general and administrative expenses for the fiscal years ended
November 30, 1999 and 1998, were $4,250,000 and $3,695,000, respectively,
representing an increase of approximately 15% or $555,000, but a decrease as a
percentage of net sales from 31.5% in fiscal 1998 to 29.9% in fiscal 1999. The
dollar increase was principally due to additional expenses attributable to the
increased sales volume.

Other income, net of other expenses for the fiscal year ended November
30, 1999 increased approximately $9,000 from the fiscal 1998 period.

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DISCONTINUED OPERATIONS

In January 1998, the Company and its American Chemical Company
subsidiary ("ACC") completed the sale of certain assets (inventory and certain
intangibles) of ACC's adhesive, private label and toll manufacturing business
(the "discontinued operation") for $1,350,000. The purchase price includes
$350,000 allocated to a three-year non-compete agreement, which is being
amortized to income over the three-year term. The Company accounted for ACC's
business as a discontinued operation, in accordance with APB No. 30, as of
November 30, 1997 when the definitive sale agreement was executed.

In November 1999, the Company contributed the ACC land and building to
Marine Learning Institute ("MLI"), a not-for-profit environmental educational
organization operating under section 501(c)(3) of the United States Internal
Revenue Code. In connection with the contribution agreement, MLI has indemnified
the Company and has agreed to assume any environmental costs arising from or out
of the past, present or future condition of the site. Terms of the contribution
agreement require MLI to purchase a $1,000,000 environmental insurance policy
and name the Company in the policy as insured. As a measure of additional
protection, the Company obtained an additional environmental insurance policy.
Management believes the Company is adequately insured in the unlikely event of
being assessed a future liability.

In connection with the contribution of the ACC land and building to
MLI, the carrying value of the real estate and the direct costs associated
therewith were appropriately charged to discontinued operations in 1999. No
related income tax benefit was provided. Management was taking certain actions
to prepare the ACC land and building for sale. Prior to contribution, the ACC
land and building were held for sale.

LIQUIDITY AND CAPITAL RESOURCES

On May 1, 1999, the Company entered into a revolving line of credit
agreement with a bank. This $3,500,000 credit facility is subject to a borrowing
base and accrues interest at the bank's prime lending (8.5% as of November 30,
1999). The credit facility is fully secured by a lien on all assets of the
Company and its operating subsidiaries. The credit facility expires on May 1,
2000. This agreement requires that the Company meets certain covenants including
financial ratios. As of November 30, 1999, the Company is in compliance with the
financial covenants. At November 30, 1999, the outstanding balance under this
agreement was $700,000.

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As of November 30, 1999, the Company's working capital increased to
$3,799,660 from $3,128,005 at November 30, 1998 and includes cash of $352,895.

The Company believes that its cash flow from operating activities,
existing cash resources and working capital coupled with its bank line will be
adequate to meet its capital needs for the foreseeable future.

YEAR 2000

Cohesant has not experienced significant problems related to systems
properly recognizing date sensitive information as a result of the year 2000.
Were Cohesant to experience such problems in the future, it could implement
temporary solutions or processes not involving the malfunctioning equipment.
Contingency plans have been documented in the event Cohesant must implement such
temporary solutions. The costs associated with making its information systems
year 2000 compliant were not material.

NEW ACCOUNTING STANDARD

In June 1998, the FASB issued SFAS No. 133, which establishes
accounting and reporting standards for a comprehensive and consistent standard
for the recognition and measurement of derivatives and hedging activities. The
new statement requires all derivatives to be recorded in the balance sheet as
either an asset or liability measured at its fair value. The Company believes
the adoption of Statement No. 133 will not have a material impact on the
Company's financial position or results of operations. Implementation of this
standard has been delayed by the FASB for a 12-month period. The Company will
adopt SFAS No. 133 during fiscal 2001.

ITEM 7. FINANCIAL STATEMENTS

This information appears in a separate section of this report following
Part III.

ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

None.

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PART III

ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The Company incorporates herein by reference the information appearing
under the caption "Election of Directors" and "Section 16(a) Beneficial
Ownership Reporting Compliance" of the Company's definitive Proxy Statement to
be filed with the Securities and Exchange Commission on or about March 3, 2000.
Information with respect to the Company's executive officers appear at the end
of PART I of this Form 10-KSB.

ITEM 10. EXECUTIVE COMPENSATION

The Company incorporates herein by reference the information appearing
under the caption "Executive Compensation" of the Company's definitive Proxy
Statement to be filed with the Securities and Exchange Commission on or about
March 3, 2000.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The Company incorporates herein by reference the information appearing
under the caption "Ownership of Voting Securities" of the Company's definitive
Proxy Statement to be filed with the Securities and Exchange Commission on or
about March 3, 2000.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The Company incorporates herein by reference the information appearing
under the caption "Certain Relationships and Related Transactions" of the
Company's definitive Proxy Statement to be filed with the Securities and
Exchange Commission on or about March 3, 2000.

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<PAGE> 16

ITEM 13. EXHIBITS, LIST AND REPORTS ON FORM 8-K

(a) Exhibits

*3.1 Certificate of Incorporation of the Company, as corrected.

**3.2 By-Laws of the Company, as amended.

****4.1 Credit and Security Agreement, dated May 1, 1999, by and
between the Company and Union Planters Bank, N.A.

**10.1 The Company's 1994 Employee Stock Option Plan.

*****10.2 Lease Agreement between Glas-Craft, Inc. and ProLogis North
Carolina Limited Partnership.

***10.4 Financial Advisory Agreement between Clarion Management Ltd.
and the Company dated June 1, 1996.

10.5 Amendment to Lease Agreement between Glas-Craft, Inc. and
ProLogis North Carolina Limited Partnership.

21.1 Subsidiaries of the Registrant.

23 Consent of Accountants

27 Financial Data Schedule

* Incorporated herein by reference to the Exhibit to the Company's
Annual Report on Form 10-KSB for the year ended November 30, 1995.

** Incorporated here in by reference to the Exhibit included to the
Company's Registration Statement on Form SB-2 dated November 29, 1994
(No. 33-82732).

*** Incorporated herein by reference to the Exhibit to the Company's
Annual Report on Form 10-KSB for the year ended November 30, 1996.

**** Incorporated herein by reference to Exhibit 4.1 included in the
Company's Quarterly report on Form 10-QSB for the quarter ended May 31,
1999.

***** Incorporated herein by reference to the Exhibit to the Company's
Annual Report on Form 10-KSB for the year ended November 30, 1998.

(b) Reports on Form 8-K. - none

<PAGE> 17

COHESANT TECHNOLOGIES INC.

INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
Page
----

<S> <C>
Report of Independent Public Accountants F-2
Consolidated Balance Sheets as of November 30, 1999 and 1998 F-3
Consolidated Statements of Operations for the Years Ended,
November 30, 1999 and 1998 F-5
Consolidated Statements of Shareholders' Equity for the Years
Ended November 30, 1999 and 1998 F-6
Consolidated Statements of Cash Flows for the Years Ended
November 30, 1999 and 1998 F-7
Notes to Consolidated Financial Statements F-8
</TABLE>

F-1
<PAGE> 18

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Board of Directors and Shareholders of
Cohesant Technologies Inc.:

We have audited the accompanying consolidated balance sheets of COHESANT
TECHNOLOGIES INC. (a Delaware corporation) and subsidiaries as of November 30,
1999 and 1998, and the related consolidated statements of operations,
shareholders' equity and cash flows for the years then ended. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Cohesant Technologies Inc. and
subsidiaries as of November 30, 1999 and 1998, and the results of their
operations and their cash flows for the years then ended in conformity with
generally accepted accounting principles.

ARTHUR ANDERSEN LLP

Indianapolis, Indiana,
December 17, 1999.

F-2
<PAGE> 19

COHESANT TECHNOLOGIES INC.

CONSOLIDATED BALANCE SHEETS

AS OF NOVEMBER 30, 1999 AND 1998

ASSETS

<TABLE>
<CAPTION>
1999 1998
---------- ----------
<S> <C> <C>
ASSETS:
Cash $ 352,895 $ 119,967
Accounts receivable, net of allowance for doubtful accounts of $168,079 and
$85,370 in 1999 and 1998, respectively 2,351,547 1,947,626
Inventories, net 3,367,160 3,421,531
Prepaid expenses and other 145,336 152,371
Deferred tax assets 274,200 165,600
---------- ----------
Total current assets 6,491,138 5,807,095

Restricted, temporary investments -- 215,617
Property, plant and equipment, net of accumulated depreciation
of $796,992 and $588,113 in 1999 and 1998, respectively 582,103 605,740

Investment and advances in unconsolidated affiliate 68,752 83,120
Patents and other intangibles, net of accumulated amortization
of $94,118 and $78,571 in 1999 and 1998, respectively 110,972 123,989
Goodwill, net of accumulated amortization of $161,472 and
$110,628 in 1999 and 1998, respectively 727,004 658,644
Other noncurrent assets 7,102 6,039
Noncurrent assets - discontinued operations, held for sale -- 71,237
---------- ----------
Total assets $7,987,071 $7,571,481
========== ==========
</TABLE>

The accompanying notes are an integral part of these consolidated
balance sheets.

F-3
<PAGE> 20

COHESANT TECHNOLOGIES INC.

CONSOLIDATED BALANCE SHEETS

AS OF NOVEMBER 30, 1999 AND 1998

LIABILITIES AND SHAREHOLDERS' EQUITY

<TABLE>
<CAPTION>
1999 1998
---------- ----------
<S> <C> <C>
LIABILITIES:
Revolving line of credit $ 700,000 $ 868,472
Current maturities of long-term liabilities 138,090 163,335
Accounts payable 917,965 1,057,753
Accrued salaries, benefits and commissions 327,707 238,465
Accrued income taxes 303,105 --
Accrued liabilities related to discontinued operation -- 62,890
Other current liabilities 304,611 288,175
---------- ----------
Total current liabilities 2,691,478 2,679,090

Other noncurrent liabilities 9,727 151,735
---------- ----------
Total liabilities 2,701,205 2,830,825

COMMITMENTS AND CONTINGENCIES (Notes 11 and 12)

SHAREHOLDERS' EQUITY:
Common stock ($.001 par value; 10,000,000 shares authorized and
2,688,343 shares issued) 2,688 2,688
Additional paid-in capital 6,450,360 6,450,360
Accumulated deficit (538,726) 1,206,638)
Treasury stock at cost, (351,610 and 280,600 shares in 1999 and
1998, respectively) (628,456) (505,754)
---------- ----------
Total shareholders' equity 5,285,866 4,740,656
---------- ----------
Total liabilities and shareholders' equity $7,987,071 $7,571,481
========== ==========
</TABLE>

The accompanying notes are an integral part of these consolidated
balance sheets.

F-4
<PAGE> 21

COHESANT TECHNOLOGIES INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE YEARS ENDED NOVEMBER 30, 1999 AND 1998

<TABLE>
<CAPTION>
1999 1998
----------- -----------
<S> <C> <C>
NET SALES $14,191,450 $11,735,872
COST OF SALES 7,930,515 6,577,665
----------- -----------
Gross profit 6,260,935 5,158,207

RESEARCH, DEVELOPMENT AND ENGINEERING EXPENSES 969,958 831,968
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 4,250,152 3,695,061
----------- -----------
TOTAL OPERATING EXPENSES 5,220,110 4,527,029

Income from operations 1,040,825 631,178

OTHER INCOME (EXPENSE):
Interest expense (116,689) (95,407)
Interest income 7,580 9,826
Equity in earnings of unconsolidated affiliate 39,428 32,334
Other income, net 144,106 118,410
----------- -----------

INCOME FROM CONTINUING OPERATIONS BEFORE
INCOME TAXES 1,115,250 696,341

INCOME TAX PROVISION (222,338) --
----------- -----------

INCOME FROM CONTINUING OPERATIONS 892,912 696,341

DISCONTINUED OPERATIONS (Note 13) (225,000) --
----------- -----------

NET INCOME $ 667,912 $ 696,341
=========== ===========

NET INCOME (LOSS) PER SHARE BASIC
CONTINUING OPERATIONS $ 0.38 $ 0.26
DISCONTINUED OPERATIONS (0.10) --
----------- -----------
NET INCOME PER SHARE $ 0.28 $ 0.26
=========== ===========

NET INCOME (LOSS) PER SHARE DILUTED
CONTINUING OPERATIONS $ 0.37 $ 0.26
DISCONTINUED OPERATIONS (0.09) --
----------- -----------
NET INCOME PER SHARE $ 0.28 $ 0.26
=========== ===========

AVERAGE SHARES OF COMMON STOCK OUTSTANDING
Basic 2,354,895 2,655,587
=========== ===========
Diluted 2,388,978 2,697,095
=========== ===========
</TABLE>

The accompanying notes are an integral part of these consolidated
statements.

F-5
<PAGE> 22

COHESANT TECHNOLOGIES INC.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

FOR THE YEARS ENDED NOVEMBER 30, 1999 AND 1998

<TABLE>
<CAPTION>
Additional Total
Common Paid-in Accumulated Treasury Shareholders'
Stock Capital Deficit Stock Equity
---------- ------------ ------------ ---------- ----------
<S> <C> <C> <C> <C> <C>
BALANCE, November 30, 1997 $2,688 $6,450,360 $(1,902,979) $ -- $4,550,069

Repurchase of 280,600 shares
of common stock -- (505,754) (505,754)
Net income -- -- 696,341 -- 696,341
------ ---------- ----------- --------- ----------
BALANCE, November 30, 1998 2,688 6,450,360 (1,206,638) (505,754) 4,740,656

Repurchase of 132,900 shares
of common stock (224,053) (224,053)
Sold 61,890 shares to company
sponsored 401k -- 101,351 101,351
Net income -- -- 667,912 -- 667,912
------ ---------- ----------- --------- ----------
BALANCE, November 30, 1999 $2,688 $6,450,360 $ (538,726) $(628,456) $5,285,866
====== ========== =========== ========= ==========
</TABLE>

The accompanying notes are an integral part of these consolidated
statements.

F-6
<PAGE> 23

COHESANT TECHNOLOGIES INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED NOVEMBER 30, 1999 AND 1998

<TABLE>
<CAPTION>
1999 1998
--------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income - $ 667,912 $ 696,341
Adjustments to reconcile net income
to net cash used in continuing operations-
Loss from discontinued operations 225,000 --
Depreciation and amortization 291,225 266,962
Deferred tax benefit (108,600) --
Provision for doubtful accounts 133,229 51,161
Equity in income of unconsolidated affiliate (39,428) (32,334)
Net change in current assets and current liabilities-
Accounts receivable (537,150) (465,660)
Inventories 31,108 (266,918)
Prepaid expenses and other 7,035 (47,687)
Accounts payable (139,788) (509,679)
Other current liabilities 289,558 (489,049)
Increase in other noncurrent assets (819) (2,792)
Increase (decrease) in other noncurrent liabilities (138,933) 89,062
--------- -----------
Net cash provided by (used in) continuing operations 680,349 (710,593)
Net cash provided by (used in) discontinued operations (216,653) 1,916,097
--------- -----------
Net cash provided by operating activities 463,696 1,205,504
--------- -----------

CASH FLOWS PROVIDED BY (USED IN) INVESTING ACTIVITIES:
Patent additions (8,610) (1,736)
Property and equipment additions (172,098) (164,507)
Insurance proceeds related to discontinued operations -- 177,109
Release of restricted, temporary investment 215,617 --
Payments from unconsolidated affiliate 53,796 54,716
--------- -----------
Net cash provided by investing activities 88,705 65,582
--------- -----------

CASH FLOWS USED IN FINANCING ACTIVITIES:
Payments under revolving line of credit (168,472) (683,808)
Principal payments under capital lease obligations (28,299) (21,420)
Proceeds from sale of treasury stock 101,351 --
Purchase of treasury stock (224,053) (505,754)
--------- -----------
Net cash used in financing activities (319,473) (1,210,982)
--------- -----------

NET INCREASE IN CASH 232,928 60,104
CASH, beginning of period 119,967 59,863
--------- -----------
CASH, end of period $ 352,895 $ 119,967
========= ===========
SUPPLEMENTAL DISCLOSURES:
Cash paid during the year for-
Interest $ 116,689 $ 95,407
========= ===========
Income taxes $ 27,833 $ 0
========= ===========
</TABLE>

The accompanying notes to financial statements are an integral part of
these consolidated statements.

F-7
<PAGE> 24

COHESANT TECHNOLOGIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOVEMBER 30, 1999 AND 1998

1. NATURE OF BUSINESS

Cohesant Technologies Inc. and its subsidiaries (the "Company" or "Cohesant")
are engaged in the design, development, manufacture and sale of specialized
spray finishing and coating application equipment, replacement parts and
supplies used in the operation of the equipment and specialty coating and grout
products.

The Company's direct, wholly owned subsidiaries, Glas-Craft Inc. ("GCI") and
Raven Lining Systems Inc. ("Raven") sell their products through a network of
independent distributors and Certified Applicators in the United States and
overseas. Industries served include construction, transportation and marine.

The Company's executive offices are located in Indianapolis, Indiana with its
principal manufacturing, warehouse and distribution facilities located in
Indianapolis, Indiana and Tulsa, Oklahoma.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a. Principles of Consolidation
---------------------------

The consolidated financial statements include the accounts of the Company and
its direct, wholly owned subsidiaries, GCI and Raven. The former adhesives,
private label and toll manufacturing operations of American Chemical Company
("ACC") also have been included in the accompanying financial statements but are
presented as discontinued operations (Note 13). Intercompany accounts and
transactions have been eliminated. The Company's noncontrolling investment in an
affiliate is accounted for under the equity method.

b. Basic and Diluted Earnings Per Share
------------------------------------

Statement of Financial Accounting Standards (SFAS) No. 128, Earnings per Share,
requires dual presentation of basic and diluted earnings per share on the face
of the statement of operation. Basic earnings per share is computed by dividing
net income available to common shareholders by the weighted-average number of
common shares outstanding for the period. Diluted earnings per share is computed
based upon the weighted average shares that would have been outstanding if all
dilutive potential common shares would have been converted into shares at the
earliest date possible. In determining diluted earnings per share, stock options
were included in the calculation as their effect was dilutive. In determining
diluted earnings per share, the common stock purchase warrants, the
underwriter's purchase option and related warrants (Note 4) were not included in
the calculation as they expired on November 30,1999 or were antidilutive.

F-8
<PAGE> 25

c. Statements of Cash Flows
------------------------

Certain noncash investing activities are described below:

During 1999 and 1998, the Company transferred $23,263 and $27,300 of inventory
to property and equipment, respectively. During 1999 and 1998, the Company
recorded a payable to the former owners of Raven and increased goodwill by
$119,204 and $118,964, respectively under its contingent purchase price
obligations. At November 30, 1999 and 1998 other current liabilities include the
payables of $119,204 and $118,964, respectively.

d. Inventories
-----------

Inventories are stated at the lower of cost or market, with cost determined
using the first-in, first-out method. Inventory costs include raw material,
labor (including material handling) and overhead costs. An inventory reserve is
provided for obsolete and slow-moving inventory to reduce the carrying amount to
its estimated net realizable value.

At November 30, 1999 and 1998, the net carrying value of inventories consisted
of the following:

<TABLE>
<CAPTION>
1999 1998
---------- ----------
<S> <C> <C>
Raw materials $2,872,382 $2,891,938
Work-in-process 215,419 222,547
Finished goods 405,359 395,265
Less: inventory reserve (126,000) (88,219)
---------- ----------
$3,367,160 $3,421,531
========== ==========
</TABLE>

e. Property, Plant and Equipment
-----------------------------

Property, plant and equipment are carried at cost. Depreciation of property,
plant and equipment is provided by use of the straight-line method over the
estimated useful lives of the assets as follows:

Leasehold improvements 3-5 years
Machinery and equipment 3-10 years
Displays, demos and lab equipment 3-5 years

F-9
<PAGE> 26

Property, plant and equipment consist of the following:

<TABLE>
<CAPTION>
1999 1998
---------- ----------
<S> <C> <C>
Leasehold improvements $ 115,690 $ 91,653
Machinery and equipment 1,030,519 884,278
Displays, demos and lab equipment 232,886 217,922
---------- ----------
1,379,095 1,193,853
Less accumulated deprecation (796,992) (588,113)
---------- ----------
$ 582,103 $ 605,740
========== ==========
</TABLE>

f. Intangible Assets
-----------------

The initial purchase price in excess of the fair value of identifiable net
assets acquired of Raven, goodwill, is being amortized on a straight-line basis
over 17 years. Additional goodwill resulting from future contingent purchase
price payments earned will be amortized on a straight-line basis over the
remaining life of the original 17-year period. The earn-out agreement provides
for contingent payments, not to exceed $600,000, payable in cash or the
Company's stock, based on the profitability of Raven over a four year period
from the December 1995, acquisition date. During 1999, the Company extended the
earn-out agreement for a one year period through fiscal 2000.

Legal and related external costs of patents is being amortized using the
straight-line method over their estimated useful lives (approximately 3 to 10
years). Other intangibles consist of the cost of certain product certifications.
Amortization of deferred certification costs is provided by use of the
straight-line method over the estimated future period of benefit (approximately
5 to 8 years).

g. Revenue Recognition
-------------------

The Company recognizes revenue from sales upon shipment of goods.

h. Research and Development
------------------------

The costs associated with research and development programs for new products and
significant improvements, which totaled approximately $969,958 and $831,968 in
1999 and 1998, respectively, are expensed as incurred.

i. Income Taxes
------------

The Company files a consolidated Federal income tax return with its wholly owned
subsidiaries. Income taxes are provided based on the liability method of
accounting pursuant to Statement of Financial Accounting Standards No. 109 (SFAS
109), "Accounting for Income Taxes." The liability method measures the effective
tax impact of future taxable income or deductions resulting from differences in
the tax and financial reporting bases of assets and liabilities reflected in the
consolidated balance sheets and the expected tax impact of carryforwards for tax
purposes.

F-10
<PAGE> 27

j. Impairment of Long-Lived Assets
-------------------------------

The Company evaluates the carrying value of long-lived assets and long-lived
assets to be disposed of in accordance with SFAS No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of".
Under the provisions of the statement, the Company continually evaluates its
long-lived assets in light of events and circumstances that may indicate that
the remaining estimated useful life may warrant revision or that the remaining
value may not be recoverable. When factors indicate that long-lived assets
should be evaluated for possible impairment, the Company uses an estimate of the
related cash flows over the remaining life of the asset in measuring whether
that asset is recoverable. To the extent an impairment has occurred, the excess
of the carrying value of the long-lived assets over their estimated recoverable
value will be charged to operations.

k. Estimates and Reclassifications
-------------------------------

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, disclosure of contingent
assets and liabilities at the date of the financial statements and the reported
amounts of sales and expenses during the reporting period. Actual results could
differ from those estimates.

Certain reclassifications have been made to the prior year financial statements
to conform to the current year presentation. These reclassifications have no
impact on net operating results previously reported.

l. Fair Values of Financial Instruments
------------------------------------

Statement of Financial Accounting Standards No. 107, "Disclosures About Fair
Value of Financial Instruments," requires disclosure of fair value information
for certain financial instruments. The carrying amounts of cash, accounts
receivable, accounts payable and noncurrent liabilities (excluding capital lease
obligations) approximate fair value because of the short maturity of these
instruments.

m. New Accounting Standards
------------------------

In fiscal 1999, the Company adopted SFAS No. 131 "Disclosures About Segments of
an Enterprise and Related Information." SFAS No. 131 establishes a new method by
which companies will report operating segment information. This method is based
on the manner in which management organizes the segments within a company for
making operating decisions and assessing performance. SFAS No. 131 also
establishes standards for related disclosures about products and services,
geographic areas and major customers. The Company's operations are reported on
the basis of segments, as further discussed in Note 10.

F-11
<PAGE> 28

the adoption of Statement No. 133 will not have a material impact in the
Company's financial position or results of operations. Implementation of this
standard has been delayed by the FASB for a 12-month period. The Company will
adopt SFAS No. 133 during fiscal 2001.

3. STOCK OPTION PLAN

The Company has adopted a Stock Option Plan (the "Option Plan") to provide for
the grant of options to purchase shares of common stock to qualified employees
(including officers and directors). The exercise price of any options granted
under the plan shall be 100% of the fair market value of the common stock as of
the date of grant (or 110% of the fair market value of the common stock if the
grant is an "incentive stock option," as defined by the Internal Revenue Code,
to an employee who owns more than 10% of the Company's outstanding common
stock). Options may not be exercised more than ten years after the date of grant
(five years if the grant is an incentive stock option to any employee who owns
more than 10% of the Company's outstanding common stock). However, certain
options may be exercised immediately. The Company has reserved 250,000 shares of
common stock for issuance upon exercise of stock options. At November 30, 1999,
there were 49,000 options available for grant.

Stock option activity under the Option Plan is as follows:

<TABLE>
<CAPTION>
Number of Weighted-Average
Options Shares Exercise Price
- ------- --------- ----------------
<S> <C> <C>
November 30, 1997 185,500 $2.32
Granted 113,000 $1.56
Canceled (61,000) $5.00
Canceled (26,000) $1.25

November 30, 1998 211,500 $1.52
Canceled (6,000) $5.00
Canceled (4,500) $1.25
November 30, 1999 201,000 $1.42

Shares Exercisable at November 30, 1999 122,500 $1.37
Shares Exercisable at November 30, 1998 68,250 $1.49
</TABLE>

The Company has historically accounted for its Option Plan in accordance with
APB Opinion No.25 (APB 25), under which compensation expense is recognized only
to the extent the exercise price of the option is less than the fair market
value of the share of stock at the date of the grant. Accordingly, no
compensation expense has been recorded.

The Company adopted the disclosure requirements of Statement of Financial
Accounting Standards (SFAS) No. 123, "Accounting for Stock Based Compensation",
which considers stock options as compensation expense to the Company based on
their fair value at the date of the grant. The fair value of options granted
during 1998 and 1996 was $.99 and $.60 per share, respectively. The fair value
of the options granted was estimated on the date of the grant using the
Black-Sholes option pricing model with the following assumptions: risk-free
interest rate of 5.5%, expected volatility of 72.1%, no expected dividend yield
and an expected life of 5 years

F-12
<PAGE> 29

for all options granted. Had the compensation expense related to the Option Plan
been determined based on the fair value at date of grant, the Company's net
income and earnings per share would have been reduced to the pro forma amounts
indicated below:

<TABLE>
<CAPTION>
November 30, 1999 November 30, 1998
----------------- -----------------
<S> <C> <C>
Net Income:
As reported $667,912 $696,341
Pro forma $617,989 $663,909

Basic EPS:
As reported $0.28 $0.26
Pro forma $0.26 $0.25

Diluted EPS
As reported $0.28 $0.26
Pro forma $0.26 $0.25
</TABLE>

4. WARRANTS

On December 7, 1994, the Company completed its initial public stock offering
("Offering") of 1,100,000 units ("Units") at $5.00 per Unit. In January 1995,
the underwriter acquired an additional 150,000 Units at $5.00 per Unit under
terms of the Offering's over-allotment option. Each Unit consists of one share
of common stock and one redeemable common stock purchase warrant ("Warrant").
The Warrants and common stock comprising the Units are immediately detachable
and separately transferable. Each Warrant entitles the holder to purchase one
share of common stock for $5.75 during the four-year period commencing one year
after the Offering. The underwriter's purchase option and all warrants issued
expired on November 30, 1999.

5. INVESTMENT AND ADVANCES IN UNCONSOLIDATED AFFILIATE

GCI owns one-third of the common stock of RTM Systems, Inc. (RTM). The Company
is accounting for this investment under the equity method. An additional reserve
is provided when necessary to adjust the Company's investment and advances in
RTM to expected net realizable value.

Certain GCI employees perform services for the benefit of RTM, and GCI pays
certain other general and administrative expenses of RTM. GCI charged RTM fees
totaling $14,195, in fiscal 1999. In fiscal 1998 RTM charged GCI fees, net of
RTM costs paid by GCI totaling $28,297. GCI also sells dispensing systems to
RTM. Sales to RTM totaled $34,361 and $16,558 in fiscal 1999 and 1998,
respectively. Included in these sales are profits to GCI of $5,021 and $1,121 in
fiscal 1999 and 1998, respectively. RTM charges GCI a commission for RTM
dispensing systems sold by GCI. Commissions totaled $34,165 and $44,024 in
fiscal 1999 and 1998, respectively.

F-13
<PAGE> 30

6. LIABILITIES

a. Revolving Line of Credit
------------------------

This agreement requires that the Company meet certain covenants including
financial ratios. As of November 30, 1999, the Company was in compliance with
the financial covenants. As of November 30, 1999, the outstanding balance under
this agreement was $700,000.

b. Capital Leases
--------------

The Company leases certain machinery and equipment under agreements which are
classified as capital leases. Future minimum payments, by year, under these
noncancellable capital leases consist of the following at November 30:

<TABLE>
<CAPTION>
Minimum lease payments:

Year 1999 1998
---- ---- ----
<S> <C> <C>
1999 -- 29,735
2000 22,482 26,535
------- -------
Minimum lease payments 22,482 56,270

Less - Amount
representing interest (1,059) (5,344)
------- -------

Present value of future
minimum lease payments $21,423 $50,926
======= =======
</TABLE>

c. Other Liabilities
-----------------

At November 30, 1999 and 1998, other noncurrent liabilities, including capital
lease obligations, consist of the following:

<TABLE>
<CAPTION>
1999 1998
--------- ---------
<S> <C> <C>
Present value of lease payments $ 21,423 $ 50,926

Noninterest bearing deferred
compensation obligation, collateralized by a
restricted temporary investment (Note 11)
This obligation was settled in September 1999 -- 21,086

Deferred income being amortized over
contractual period not to compete 126,394 243,058
--------- ---------
147,817 315,070
Less- Current portion (138,090) (163,335)
--------- ---------
Long-term portion $ 9,727 $ 151,735
========= =========
</TABLE>

F-14
<PAGE> 31

7. RETIREMENT PLANS

The Company has a defined contribution profit sharing and saving plan for all
employees meeting minimum eligibility requirements. It is the Company's policy
to contribute up to 3% of total wages for each employee who makes certain
minimum contributions. The amounts contributed by the Company during 1999 and
1998 were $82,205 and $77,169, respectively.

In December 1998, the Company changed 401(k) providers. The new provider offered
alternative investments choices including the Company's stock. In accordance
with the transfer of plan assets, the Company sold 61,890 shares out of treasury
to the Company sponsored 401(k) plan for $101,351.

During 1998, the Company converted ACC's defined benefit pension plan to a
401(k) (or defined contribution plan). In connection with this conversion,
substantially all of the plans assets totaling approximately $130,000 were
contributed to the new plan in satisfaction of the initial contribution
requirement. No additional contributions by the Company are required under the
new plan.

8. INCOME TAXES

The provision for income taxes consists of the following components at November
30:

<TABLE>
<CAPTION>
1999 1998
--------- -----
<S> <C> <C>
CURRENT
Federal $ 0 $ 0
State 0 0
Other 330,938 0
--------- ----
Total current 330,938 0

DEFERRED
Deferred (108,600) 0
Discontinued operations 0
0
--------- ----
INCOME TAX PROVISION $ 222,338 $ 0
========= ====
</TABLE>

F-15
<PAGE> 32

No Federal or State income tax liability was provided in 1998 due to the
utilization of net operating loss carryforwards and reversal of temporary
differences which represent a reduction of taxable income for which valuation
allowances had been previously provided. However, the Company utilized certain
net operating losses, which if certain events occur in the future, could subject
the Company to future taxable income. Accordingly, an income tax reserve of
$330,938 was provided in 1999.

Temporary differences, credits and carryforwards which give rise to the net
deferred tax asset at November 30, 1999 and 1998, are as follows:

<TABLE>
<CAPTION>
1999 1998
--------- ----------
<S> <C> <C>
Financial reporting reserves not
yet deductible $ 85,200 $ 180,500
Depreciation and amortization 15,500 35,000
Net operating loss carryforwards
attributable to:
ACC 382,500 611,300
Cohesant 29,400 151,200
General business credits 151,800 145,600
AMT credit carryforward 11,700 3,500
--------- ----------
676,100 1,127,100
Less- valuation allowance (401,900) (961,500)
--------- ----------
NET DEFERRED TAX ASSET $ 274,200 $ 165,600
========= ==========
</TABLE>

At November 30, 1999 and 1998, for Federal income tax purposes, the Company has
net operating loss carryforwards (NOL's) totaling approximately $1,113,200 and
$2,060,800, respectively, which expire through 2012. The NOL amount includes
$911,000 of separate return limitation year (SRYL) NOL's whose annual
utilization is limited to approximately $4,000. The Company also has general
business credits at November 30,1999 and 1998 totaling approximately $151,800
and $145,600, respectively, which expire through fiscal 2009.

At November 30, 1999, management believes that there is risk that substantially
all of the NOL's and credit carryforwards may expire unused and, accordingly,
has established a valuation allowance against them. At November 30, 1998, a
valuation allowance was provided for the Company's NOL's, general business
credits and a certain portion of other deferred tax assets. During 1999, the
Company's valuation allowance was reduced due to increased book and taxable
earnings generated by the Company. Realization of deferred tax assets associated
with the NOL's and general business credit carryforwards is dependent upon
generating sufficient taxable income and other factors prior to their
expiration. Although realization is not assured for the remaining deferred tax
assets for which a valuation allowance has not been provided, management
believes it is more likely than not that they will be realized through the
future taxable earnings or alternative tax strategies.

F-16
<PAGE> 33

9. RELATED PARTY TRANSACTIONS

The majority shareholder and Chairman of the Board of Directors is the owner of
Clarion Management Ltd., which provides management assistance and general
administrative support for the Company. Clarion Management Ltd. was paid $52,000
and $42,000, during the fiscal years ended November 30, 1999 and 1998,
respectively, for management assistance and general administrative support.

10. SEGMENT INFORMATION

The Company monitors its operations in two business segments: Equipment and
Parts and Coatings and Grouts. Certain corporate costs and income taxes are not
allocated to the business segments. Financial information for the Company's
business segments is as follows:

<TABLE>
<CAPTION>
Equipment & Coatings Discontinued
Parts & Grouts Operations Corporate Consolidated
----- -------- ---------- --------- ------------
Revenues:
<S> <C> <C> <C> <C> <C>
1999 $11,875,865 $2,315,585 $ -- $ -- $14,191,450
1998 9,467,643 2,268,229 -- -- 11,735,872

Depreciation and amortization:
1999 206,552 84,609 -- 64 291,225
1998 203,711 62,447 -- 804 266,962

Interest expense:
1999 2,373 -- -- 114,616 116,689
1998 55,180 -- -- 40,227 95,407

Income from continuing
operations before taxes:
1999 1,506,286 91,724 -- (482,760) 1,115,250
1998 907,353 175,064 -- (386,076) 696,341

Discontinued operations:
1999 -- -- (225,000) -- (225,000)
1998 -- -- -- -- --

Identifiable assets:
1999 5,875,510 1,810,381 -- 301,180 7,987,071
1998 5,542,342 1,530,394 71,237 427,508 7,571,481

Capital expenditures:
1999 151,299 20,799 -- -- 172,098
1998 118,151 46,356 -- -- 164,507
</TABLE>

F-17
<PAGE> 34
The following table presents percentage of total revenues by region.

<TABLE>
<CAPTION>
Region 1999 1998
- ------ ---- ----
<S> <C> <C>
United States 68% 65%
Asia/Pacific Rim 11 11
Europe/Middle East 15 16
Other 6 8
--- ---
Total 100% 100%
</TABLE>

11. COMMITMENTS

The Company leases its office, manufacturing and warehouse facilities, a portion
of its office equipment and Company cars under noncancellable operating leases
expiring at various dates through November 2004. Future minimum rental payments
required under these noncancellable operating leases are summarized as follows:

<TABLE>
<CAPTION>
Fiscal Year Amount
----------- ------
<S> <C> <C>
2000 $ 314,962
2001 310,621
2002 244,940
2003 218,479
2004 18,197
Thereafter --
----------
$1,107,199
==========
</TABLE>

Rent expense totaled $284,909 and $321,183 for the years ended November 30, 1999
and 1998, respectively.

The Company had held $200,000 in short-term U.S. government money market funds,
to secure a contractual payment obligation of the Company stemming from its
acquisition of ACC. As a consequence of this agreement, the Company classified
such funds and accrued interest earned thereon as Restricted, Temporary
Investments under noncurrent assets on the accompanying Consolidated Balance
Sheet. The obligation was settled in September 1999. The funds and interest are
no longer restricted and were used by the Company for general working capital
purposes.

12. CONTINGENCIES

A former employee of ACC filed a workers' compensation claim related to injuries
incurred in connection with the August 1996 fire at the St. Louis facility. In
the claim, the employee requested additional compensation, claiming ACC violated
a Missouri safety statute in connection with the occurrence of his injury. This
matter was settled during 1999 by the insurance company.

F-18
<PAGE> 35

The Company is a party to certain legal and environmental matters arising in the
ordinary course of business. Management believes the ultimate disposition of
these matters will not have a material adverse effect on the Company's financial
position or results of operations.

13. DISCONTINUED OPERATIONS

On November 30, 1997, the Company's Board of Directors signed an agreement to
sell certain assets of American Chemical Company's ("ACC") adhesive, private
label and toll manufacturing business and decided to account for such business
as a discontinued operation for all periods presented in accordance with
Accounting Principles Board No. 30, "Reporting the Results of Operations -
Reporting the Effects of a Disposal of a Segment of a Business, and
Extraordinary, Unusual and Infrequently Occurring Events and Transactions."

On January 14, 1998 the Company, ACC and a third party completed the sale of
certain assets (inventory and certain intangibles) of the discontinued business
and executed a three-year non-compete agreement. The consideration received of
approximately $1,350,000 includes a $300,000 promissory note bearing 8% interest
and due in three years and $350,000, for a three-year non-compete agreement with
the buyer. The cash consideration received in connection with the sale of
inventory is reflected in the accompanying Condensed Consolidated Statement of
Cash Flows as Net Cash Provided by (Used in) Discontinued Operations. The
Company negotiated an early payment of the promissory note during 1998. Cash
received of $250,000 approximated the carrying value of the note. The
non-compete agreement is being amortized to income over the three-year contract
period.

In November 1999, the Company contributed the ACC land and building to Marine
Learning Institute ("MLI"), a not-for-profit environmental educational
organization operating under section 501(c)(3) of the United States Internal
Revenue Code. In connection with the contribution agreement, MLI has indemnified
the Company and has agreed to assume any environmental costs arising from or out
of the past, present or future condition of the site. Terms of the contribution
agreement require MLI to purchase a $1,000,000 environmental insurance policy
and name the Company in the policy as insured. As a measure of additional
protection, the Company obtained an additional environmental insurance policy.
Management believes the Company is adequately insured in the unlikely event of
being assessed a future liability.

In connection with the contribution of the ACC land and building to MLI, the
carrying value of the real estate and the direct costs associated therewith were
appropriately charged to discontinued operations in 1999. No related income tax
benefit was provided. Management was taking certain actions to prepare the ACC
land and building for sale. Prior to contribution, the ACC land and building
were held for sale.

F-19
<PAGE> 36

SIGNATURES

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

Dated: February 2, 2000

COHESANT TECHNOLOGIES INC.

BY: /s/ Morton A. Cohen
----------------------------------
Morton A. Cohen
Chairman of the Board of Directors

Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, this Report has been signed by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.

<TABLE>
<CAPTION>
<S> <C> <C>
/s/ Morton A. Cohen Chairman of the Board of Directors February 2, 2000
- -------------------
Morton A. Cohen

/S/ Dwight D. Goodman President and Chief Executive Officer February 2, 2000
- --------------------- (Principal Executive Officer) and
Dwight D. Goodman Director

/s/ Michael L. Boeckman Director February 2, 2000
- -----------------------
Michael L. Boeckman

/s/ Morris H. Wheeler Director February 2, 2000
- ---------------------
Morris H. Wheeler

/s/ Richard L. Immerman Director February 2, 2000
- -----------------------
Richard L. Immerman

/s/ Robert W. Pawlak Chief Financial Officer February 2, 2000
- -------------------- (Principal Financial and
Robert W. Pawlak Accounting Officer)
</TABLE>

<PAGE> 1

Exhibit 10.5

FIRST AMENDMENT TO LEASE

THIS FIRST AMENDMENT TO LEASE is entered into as of the ____ day of
_________, 2000, by and between ProLogis North Carolina Limited Partnership,
(the "Landlord") and Glas-Craft, Inc. (the "Tenant").

WITNESSETH:

WHEREAS, Landlord and Tenant have entered into a Lease, dated as of the 6th
day of October 1998, pursuant to which Landlord leased to Tenant certain
premises (the "Premises" or "Leased Premises") located at 5845 W. 82nd Street,
Suite 102, Indianapolis, IN 46278 (such lease, as heretofore and hereafter
modified, being herein referred to as the "Lease").

WHEREAS, Landlord and Tenant desire to amend the Lease and otherwise modify
its terms and conditions as set forth below.

NOW THEREFORE, in consideration of TEN DOLLARS ($10.00) and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Landlord and Tenant agree as follows:

1. Effective February 1, 2000 (the "Effective Date"), the Premises defined
as 38,400 rentable square feet shall be revised to reflect a total of
51,200 rentable square feet as detailed in Exhibit A-1, due to the
addition of 12,800 rentable square feet (the "Expansion Space") as
detailed in Exhibit B-1.

2. As of the Effective Date, Tenant's Proportionate Share of the Project
shall be revised to reflect 53.33%.

3. As of the Effective Date, Tenant's Proportionate Share of the Building
shall be revised to reflect 53.33%.

4. As of the Effective Date, the Monthly Base Rent shall be revised to
reflect $18,197.33.

5. Landlord shall perform the following improvements to the Expansion
Space, on a "turn-key" basis.

a) Create an opening approximately 10' x 12' to provide contiguous
warehouse access.

b) Repair damaged drywall on the South demising wall.

c) Provide the HVAC, electrical, mechanical and dock equipment
systems in good working order.

d) An allowance of $3,000.00 shall be provided to offset Tenant's cost
to install approximately 6,400 SF of fluorescent task lighting. All
related work to be performed by Tenant.

6. Except as modified herein, the Lease, and all of the terms and
conditions, thereof, shall remain in full force and effect and the same
are hereby ratified and confirmed.

IN WITNESS WHEREOF, the parties hereto have signed this First Amendment to
Lease as of the day and year first above written.

LANDLORD:

ProLogis North Carolina Limited Partnership

By:
----------------------------
Name: David S. Morz
Title: Senior Vice President

TENANT:

Glas-Craft, Inc.

By: /s/ Richard A. Mordarsky
----------------------------
Name: Richard A. Mordarsky
--------------------------
Title: President
-------------------------
<PAGE> 2

Exhibit B-1

[LAYOUT OF BUILDING]

12,800 S.F. Gross Leaseable
0 S.F. Build-Out

PARK 100 INDUSTRIAL CENTER
BUILDING 20
5845 WEST 82ND STREET, SUITE 106 1/99

PROLOGIS LOGO
<PAGE> 3

Exhibit A-1

[EXPANSION SPACE OF FLOORPLAN]

96,000 S.F. Gross Leaseable 1/99

PARK 100 INDUSTRIAL CENTER
BUILDING 20
5845 WEST 82ND STREET

PROLOGIS LOGO

<PAGE> 1
Exhibit 21.1

SUBSIDIARIES OF THE REGISTRANT

Name of Subsidiary State of Incorporation
------------------ ----------------------

1) Glas-Craft, Inc. Indiana
2) Raven Lining Systems, Inc. Oklahoma
3) Cohesant Export, Inc. Barbados
4) Cohesant of Missouri, Inc. Missouri
(F/K/A American Chemical Company)

<PAGE> 1

Exhibit 23

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the incorporation of our
report included in this Form 10-KSB, into the Company's previously filed
Registration Statements on Form S-8 File No. 333-67127 and File No. 333-47043.

ARTHUR ANDERSEN LLP

Indianapolis, Indiana
February 1, 2000.

<ARTICLE> 5
<CIK> 0000928420
<NAME> COHESANT TECHNOLOGIES INC.
<MULTIPLIER> 1

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> NOV-30-1999
<PERIOD-START> DEC-01-1998
<PERIOD-END> NOV-30-1999
<CASH> 1
<SECURITIES> 352,895
<RECEIVABLES> 2,519,626
<ALLOWANCES> 168,079
<INVENTORY> 3,367,160
<CURRENT-ASSETS> 6,491,138
<PP&E> 1,379,095
<DEPRECIATION> 796,992
<TOTAL-ASSETS> 7,987,071
<CURRENT-LIABILITIES> 2,691,478
<BONDS> 0
0
0
<COMMON> 2,688
<OTHER-SE> 5,283,178
<TOTAL-LIABILITY-AND-EQUITY> 7,987,071
<SALES> 14,191,450
<TOTAL-REVENUES> 14,191,450
<CGS> 7,930,515
<TOTAL-COSTS> 7,930,515
<OTHER-EXPENSES> 969,958
<LOSS-PROVISION> 133,229
<INTEREST-EXPENSE> 116,689
<INCOME-PRETAX> 1,115,250
<INCOME-TAX> 222,338
<INCOME-CONTINUING> 892,912
<DISCONTINUED> (225,000)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 667,912
<EPS-BASIC> 0.28
<EPS-DILUTED> 0.28

</TABLE>