SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                   FORM 10-KSB

                               (Amendment No. 1)

[X]      Annual Report Pursuant to Section 13 or 15(d) of the Securities
         Exchange Act of 1934.

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

                  For the fiscal year ended November 30, 1998.

                         Commission File Number 33-36198

                          NET/TECH INTERNATIONAL, INC.
                 ----------------------------------------------
                 (Name of Small Business Issuer in its charter)

              DELAWARE                                22-3038309
   -------------------------------            -------------------
   (State or other jurisdiction of            (I.R.S. Employer
   incorporation or organization).            Identification No.)

            1 WEST FRONT STREET, SUITE 30, RED BANK, NEW JERSEY 07701
               (Address of principal executive offices) (Zip Code)

                    Issuer's telephone number: (732) 345-1100

        Securities registered pursuant to Section 12 (b) of the Act: None

        Securities registered pursuant to Section 12 (g) of the Act: None

Check whether Issuer:  (1) has filed all reports required to be filed by section
13 or 15 (d) of the  Securities and Exchange Act of 1934 during the preceding 12
months and (2) has been  subject  to such  filing  requirements  for the past 90
days. Yes [X] No [ ]

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

Issuer's Revenues for its most recent fiscal year:  $36,022.

As of January 29, 1999,  the aggregate  market value of the voting stock held by
non-affiliates of the Issuer was $3,315,286. The market value of Common Stock of
the Issuer,  par value $.01 per share,  was computed by reference to the average
of the closing bid and asked prices of one share on such date which was 3.

The number of shares  outstanding of the Issuer's  Common Stock,  par value $.01
per share, as of January 29, 1999: 9,389,096.
<PAGE>

                       DOCUMENTS INCORPORATED BY REFERENCE

         Documents  incorporated by reference:  The information required by Part
III of Form 10-KSB is incorporated by reference to the Issuer's definitive proxy
statement  relating to the 1999 Annual Meeting of Shareholders which is expected
to be filed with the  Securities  and Exchange  Commission on or about March 30,
1999.

                                       2

<PAGE>
                                     PART 1

Item 1. Description of Business
        -----------------------

OVERVIEW OF BUSINESS

         Net/Tech  International,   Inc.  is  a  Delaware  Corporation,  is  the
developer  of the  patented  Hygiene  Guard Hand Wash  Reminder  and  Monitoring
technology  which prompt and verifies  employee hand washing in any  environment
where hygiene is a priority.

         Net/Tech  International  was founded in 1990.  Prior to April 1996, the
Company  was  focused  on  commercializing  its  patented  technology  for water
dispersible products. The Company developed a prototype of the water dispersible
product,  which was  successfully  tested by the US  Military.  At that time the
product could not be produced cost  effectively  enough to be  competitive  with
styrofoam.  The Company retains ownership to its water  dispersible  patents and
may determine to investigate the potential to commercialize this technology.

         During  fiscal 1996 the Company  made a  determination  to focus on its
patented Hygiene Guard Hand Wash Reminder and Monitoring technology. The Company
strategy  was to  capitalize  on the  growing  demand for health and food safety
products  as a result  of  serious  food  borne  illness  outbreaks  which  have
substantially increased in frequency in the United States and abroad.

         Between  1996 and  until  October  1998 the  Company  raised  funds and
focused its efforts in order to accomplish the  following:  1) Completion of the
design and  development  of the Hygiene Guard Hand Wash Reminder and  Monitoring
System Series 4000/5000 2) Field testing and  manufacturing of the Hygiene Guard
product line 3) Introduction of the product line to the food service and medical
industries  4) Hired  executives  to develop a complete  food safety  catalog in
order to position the Company as a food safety solution provider.

         Net/Tech's  initial product  development focus was to produce a Hygiene
Guard product capable of identifying  employees who did not wash after using the
restroom  facilities and to create a reporting  system for overall employee hand
washing.  As a result of this design  criteria  the  Company  designed a Hygiene
Guard Series 4000 product, which required a hard wire installation and a Windows
95' computer in order to run the system.

         The  Company  received   tremendous   media  exposure   (including  CNN
Worldwide) and was successful in its initial marketing  efforts,  receiving test
purchase orders from many  well-known fast food chains  including KFC, Big Boys,
WhatABurger, Arbys, Chilis and other well known companies.

         After extensive testing and evaluation,  the Hygiene Guard product line
was deemed to have important  benefits and be of  substantial  value to endusers
hand washing activity.  However,  endusers noted the following drawbacks,  which
made them reluctant to commit to substantial purchases. 1) Necessity of a costly
hard wire installation.  2) Cost of the system  (approximately $2500 per store).
3) Complexity of operating a computer in order to run the system. As a result of
these  drawbacks these  companies were unwilling to place  substantial  purchase
orders.  All the fast food chains involved  however,  did indicate a significant
interest in a simple  Hygiene  Guard type system that would remind the employees
to wash and make sure  they get to the  sink.  In  addition,  specific  endusers
indicated  a strong  interest  in  monitoring  hand  washes  upon entry into the
kitchen.

         As  a  result  of  the  Company's   inability  to  achieve  substantial
commitments  from  endusers  the  Company  was  unable to secure  the  necessary
financing  to  execute  its  business  plan to  become a  complete  food  safety
solutions  provider.  Additionally,  the Company was forced to abandon its plans
for  completing  a  health  and  food  safety  catalog  and for  development  of
distribution channels for its existing systems.

         In October  1998 the Company made a decision to focus its efforts on 1)
developing a less  expensive,  less  sophisticated  version of the Hygiene Guard
product  line.  2)  Establish  a  strategic  partnership  or  agreement  with an
international  food safety related company in order to market the Company's hand
washing systems throughout the world. The Company determined it was necessary to
pursue a strategic alliance in order to effectively market its systems since the
Company did not have the resources to manufacture cost effectively or create its
own distribution channels.

                                       3
<PAGE>

GOJO INDUSTRIES AGREEMENT

         In July 1998 the Company  initiated  discussions  with industry leading
international  hygiene  related  companies in an effort to establish a strategic
relationship to market the next generation of the Hygiene Guard product line.

         After a market  analysis  and  multiple  negotiations  the  Company has
chosen to enter into a worldwide exclusive agreement with GOJO Industries,  Inc.
GOJO,  developer of the Purrell hand sanitizer,  is an industry leading provider
of soap and hand  hygiene  products to the  worldwide  food  service and medical
markets.  GOJO is a  privately  held  company  located in their state of the art
500,000 square feet facility near Akron,  Ohio. GOJO employs over 800 people and
is an industry  leader in food service,  institutional  and health care markets.
GOJO products are sold in 46 countries worldwide.

         Under the March 15,  1999  agreement,  Net/Tech  has agreed to sell its
entire hand washing technology patent estate and product  development to date to
GOJO in return for 10% of GOJO US net sales of the patented  hand wash  reminder
and  monitoring  equipment  for a period of 10 years and 5% of sales for 2 years
and 2 1/2% for 3 years.  Also  Net/Tech  will receive 7% on foreign net sales of
the  patented  equipment  for a period of 10 years.  The  agreement  also states
GOJO's intention to fund product development, patent prosecution, protection and
worldwide marketing.  In addition, GOJO will make a substantial down payment and
monthly payments to Net/Tech for a total of 20 months totaling $290,000.

         The Company  believes this Agreement with GOJO is the best  alternative
available to successfully  commercialize  the Hygiene Guard Hand Wash Reminder &
Monitoring technology worldwide.

PATENTS

         On April 30, 1990,  the Company  filed for US patent  protection on the
water-dispersible  technology (No.  5,110,525,  granted May 5, 1992),  useful in
manufacturing  rigid containers for use in the medical and food industries.  The
inventors,  William H. Hale and Roger E. Kolsky, have assigned the patent rights
to the Company. Agricultural and process patent applications have been filed.

         On January 18, 1991, the Company filed for US patent  protection on the
Hygiene  Guard(TM)  invention.  A patent  was  granted  on April  13,  1993 (No.
5,202,666).  All  patent  rights  have  been  assigned  to  the  Company  by the
inventors, Daniel D. Richard and Herman Knippscheer. The Company intends to file
additional  US and  International  patents  for  the  different  variations  and
applications of the Hygiene Guard systems it intends to manufacture.

         The  Company  has  made a  provisional  patent  application  and  three
corresponding  applications  to the US  patent  office  on  April  29,  1998 and
November 20, 1998 respectively relating to its Hygiene Guard systems.  These new
applications  and the entire  Hygiene  Guard patent estate is being sold to GOJO
Industries as part of the GOJO agreement. All inventors have assigned the patent
rights to the Company.

         The Company was issued a patent (Patent No.  5,135,721,  granted August
4, 1992) for a sterilization apparatus called Steril-Eze. All patent rights have
been assigned by the inventor to the Company.

         The  Company  was  issued  a  usage  patent  on  the  water-dispersible
technology  (Patent No.  5,335,449,  granted August 9, 1994) for the agriculture
market. All patent rights have been assigned by the inventor to the Company.

         Net/Tech  was  issued  a  process   patent  on  the   water-dispersible
technology  (Patent No.  5,346,449,  granted  September 13,  1994).  This patent
covers the  process  required to produce  the  material  and the ability to vary
dispersal  times.  All patent  rights have been assigned by the inventors to the
Company.

                                       4
<PAGE>

COMPETITION

         The Company has identified at least one other manufacturer of hand wash
monitoring  systems,  and believes that the proposed Hygiene Guard series 1000 -
3000 product line offers features and cost savings currently  unavailable in the
marketplace.

RESEARCH AND DEVELOPMENT

         On November  9, 1998 the  Company  entered  into an  agreement  with XL
Research,  Inc. for the hardware,  software  design and  development  of the new
Hygiene Guard Series  2000/3000.  The Company has spent  approximately  $419,013
during the fiscal year ended November 30, 1998 on total research and development
costs.  These  funds were  spent in order to both  refine  and  manufacture  the
Hygiene Guard Series 4000 and development of the Hygiene Guard Series 2000/3000.
Approximately $66,046 of these expenses were unpaid as of November 30, 1998.

EMPLOYEES

         As of November 30, 1998 the Company had 3 full time employees.

Item 2. Description of Property
        -----------------------

         The Company  leases  approximately  4700  square feet in Red Bank,  New
Jersey, with an annual rent of $63,150.24. The current lease expires March 2001.

         On August 14, 1998 the Company subleased  approximately 700 square feet
with an annual rent of $9,600.  Subsequent to November 30, 1998 the Company also
subleased  an  additional  2500 square feet with an annual rent of $36,000.  The
Company's total space  subleased is +/- 3200 square feet which provide  sublease
income of $45,600 annually.

Item 3. Legal Proceedings
        -----------------

        NONE

Item 4. Submission of Matter to Vote of Security Holders
        ------------------------------------------------

         The Company held a special  meeting of shareholders on October 29, 1998
for the following purposes:

         1)       To  consider  and act  upon a  proposal  to  issue  and sell a
                  minimum of 2,000,000  shares and a maximum of 2,666,667 shares
                  of the  Company's  Common  Stock,  $.01 par value (the "Common
                  Stock"),  at a price of $.15 per share,  pursuant to a private
                  offering of Common Stock to be conducted by the Company  which
                  will  result in  aggregate  gross  proceeds  of  approximately
                  $300,000 if the minimum number of shares are sold and $400,000
                  if the maximum number of shares are sold.

         2)       To  consider  and act upon a proposal to grant Glenn E. Cohen,
                  Chairman,   President  and  Chief  Executive  Officer  of  the
                  Company,  an  option  to  purchase  1,000,000  shares  of  the
                  Company's  Common Stock for $.15 per share (the "Option").  If
                  approved  by  stockholders,  the  Option  will be  immediately
                  exercisable  with respect to 250,000 shares.  The Option shall
                  become  exercisable  with  respect  to the  remaining  750,000
                  shares only if (i) the Company achieves revenues of $1 million
                  or more from and after the date of grant (October 15, 1998) of
                  the  Option,  (ii) there is a change in control of the Company
                  or (ii) the termination,  under certain circumstances,  of Mr.
                  Cohen's employment with the Company.

Both  proposals were approved by the  shareholders.  The following is a tally of
votes:

         (1)      For:  3,816,911     Against:  69,000           Abstain:  0
         (2)      For:  3,743,311     Against:  142,500          Abstain:  100

                                        5
<PAGE>

Item 5. Market for the Registrants Common equity and Related Stockholder Matters
        ------------------------------------------------------------------------

         (a) The Company's Common Stock has been trading on the Over-the-Counter
market  since  January  10,  1992,  the  date of the  Company's  initial  public
offering.  The following table shows for the calendar periods indicated the high
and low closing bid quotation for the Company's  Common Stock.  The  quotations,
from Dow Jones Retrieval Service,  represent  inter-dealer prices without retail
mark-up, mark-down or commission and may not represent actual transactions.

<TABLE>
<CAPTION>
                                                       High Bid         Low Bid
                                                       --------         -------
                                    1998
                                    ----
<S>                                                    <C>              <C>
                  First Quarter                        4 1/16           2 1/12
                  Second Quarter                       3 3/8            2 9/16
                  Third Quarter                        2 7/8            1 5/16
                  Fourth Quarter                       7/16             3/8
                                    1997
                                    ----
                  First Quarter                        2 3/4            2
                  Second Quarter                       3 3/8            1 7/16
                  Third Quarter                        3 3/16           1 3/4
                  Fourth Quarter                       4                2 1/4

</TABLE>

         (b) As of January 29, 1999, there were approximately 214 record holders
of the Company's Common Stock. In addition, there are 410 shareholders in street
name whose shares are held in the name of other nominees.

         (c) There have been no dividends declared or paid by the Company on its
Common Stock during the past three years.


Item 6.  Management's Discussion and Analysis of Financial Condition and Results
         of Operations
         -----------------------------------------------------------------------

         The information  included in this discussion  contains  forward looking
statements  that are based on  current  expectations  and  beliefs  and  involve
numerous  risks and  uncertainties  that could  cause  actual  results to differ
materially.  Readers are cautioned not to place undue  reliance on these forward
looking statements, which speak only as of the date hereof.

RESULTS OF OPERATIONS

         Net/Tech International Inc. is a development stage company, which is in
the process of  commercializing  its patented hand wash reminder and  monitoring
technology.  The  Company's  primary  products  are its patented  Hygiene  Guard
series,  which  prompts and monitors  employee  hand washing in any  environment
where hygiene is a priority. In the current year, the management team has made a
concerted  effort to utilize its financial  resources to develop and promote the
Hygiene Guard products. The Company made significant  expenditures for research,
development  and related  engineering  costs  during  fiscal 1998 as compared to
fiscal 1997. In 1997 this reflected the Company's  contract with the supplier of
its  printed  circuit  assembly  components.  These  expenditures  were paid for
working  engineering  model  systems  with  a  personal  computer  based  system
controller  capable  of remote  access,  field  testing  of the  model  systems,
productions  of beta test and field  testing  units.  The Company also  incurred
engineering  costs with the company  assembling the Hygiene Guard to develop the
Badge to be worn by  employees,  the Soap and  Employee  Monitoring  Units,  the
system interface, and the tooling charges to manufacture these products. In 1998
these costs continued and additional funds were expended to initiate development
of a less  expensive  and  less  sophisticated  series  of hand  washing  system
technology. These costs totaled $419,013 in fiscal 1998.

                                       6

<PAGE>
         The research  and  development  expense  consisted of $391,939 in 1997.
After  marketing the original  Hygiene Guard product line and obtaining  limited
sales and market  acceptance the Company made a  determination  to develop a new
generation  of product  line and seek a strategic  partner to perfect and market
its systems.

         The Company  abandoned  the  original  Series  4000/5000  version as to
complex and expensive for the  marketplace  and have initiated  development of a
less  expensive  less  complicated  product  line.  During  the year,  after the
abandonment of marketing of the original  Hygiene Guard,  the Company  abandoned
the inventory and prototype of the original Hygiene Guard systems.

         The Company has entered into a contract with GOJO  Industries.  The key
terms of the contract are as follows:

1.       Net/Tech  to sell  the  entire  Hygiene  Guard  patent  estate  to GOJO
         Industries.
2.       GOJO to control product  development,  patent  protection and marketing
         costs. Net/Tech to receive $290,000 over 20 months and 10% US net sales
         of the patented equipment for 10 years, 5% for 2 years and 2 1/2% for 3
         years.  In addition,  Net/Tech  will receive 7% of foreign net sales of
         the patented  equipment for 10 years.  No minimum sales  guarantees are
         required by GOJO.

         Since  they are in the  business  of  supplying  soap and hand  hygiene
products to the worldwide  foodservice and healthcare  markets,  they can market
the Hygiene Guard as an additional product for existing customers. Net/Tech does
not have to provide  any  capital  for buying and  assembly of units nor selling
expenses  thereon.  As previously noted Net/Tech is to receive a $50,000 deposit
plus a minimum of $12,000 per month for 20 months.  In addition,  Net/Tech  will
receive net sales percentages of the patented equipment, previously noted. Their
main source of income will be these  payments and fees  generated by the sale of
units by GOJO.

         In  connection  the Company has written off in 1998 all  inventory  and
prototype  that  is  not  useable.  These  amounted  to  $251,288  and  $119,795
respectively. They are currently developing a new version of product, which will
be sold to GOJO along with the patent estate.

         In fiscal 1997,  the Company  incurred  costs for printing  promotional
brochures,  travel to tradeshows and memberships in numerous food processing and
food  sanitation  associations,  and costs  related  to  establishing  strategic
alliances or licensing  agreements  with selected  distributors  in an effort to
position the Company as a health and food safety solutions provider. In 1998 the
Company raised a total of $1,407,905 by sale of its stock, conversion of some of
the  options  and  payment of  creditors  and  employees  in stock.  The Company
continued  research and  development  for a newer model of the Hygiene Guard and
abandoned  efforts to market the original  Hygiene  Guard Series 4000 as well as
its plans to become a complete health and food safety solutions  provider.  As a
consequence  the Company wrote of $371,083 in inventory parts and in abandonment
of the prototype.

LIQUIDITY AND CAPITAL RESOURCES

         The Company sustained a loss of $2,071,877 and has had no revenue other
than from the sale of $41,000 of Hygiene Guard Series 4000 product. In order for
the Company to attract capital it issued  2,099,997 shares at 15(cent) per share
during the year in a private offering,  as well as 535,430 shares at prices from
$1.25 to $2.00  during  the year and from  conversions  of options  and  payment
creditors in stock.  The Company's  working  capital as of November 30, 1998 was
approximately $33,548 with its assets consisting mostly of cash.

RISK FACTORS

         The Company's  business,  results of operations and financial condition
are subject to the following risk factors:

LIMITED  OPERATING  HISTORY:  SIGNIFICANT  AND CONTINUING  LOSSES.  Although the
Company was formed in 1990, as far as the  development,  manufacture and sale of
the Hygiene  Guard  product  series is  concerned,  it has  limited  operational
history upon which  investors may base an evaluation of its  performance  or any
assumption  as to the  likelihood  that  the  Company  will be  profitable.  The
Company's  prospects must be considered in light of the risks,  expenses delays,
problems and difficulties  frequently  encountered in the establishment of a new
business and the

                                       7
<PAGE>

development   and   commercialization   of  new  products  based  on  innovative
technology.  There can be no assurance that the Company will be able to generate
significant revenues or achieve profitability.

Although the Company is now  dependent  upon GOJO as its main source of revenue.
There are no assurances as to the level of GOJO's Hygiene Guard product sales or
its success in marketing.

TECHNOLOGICAL  FACTORS.  The  Company's  development  of the  Hygiene  Guard has
changed direction to develop a less sophisticated,  less expensive product line.
It is continuing  to seek means as to refining and  improving  its product.  The
Company's  effort remains subject to risk inherent with new product  development
including delays  incorporating  technologies  into the products.  The Company's
contract with GOJO in effect transfers these undertaking to GOJO.

MARKET  ACCEPTANCE.  The original line of Hygiene  Guard did not achieve  market
acceptance and as a result the Company is developing a less sophisticated,  less
expensive product line in order to fill the needs of the marketplace. Demand and
market acceptance for new products is subject to a high level of uncertainty.

DEPENDENCE  ON  MANAGEMENT  AND GOJO  CONTRACT.  The Company is dependent on the
expertise and experience of Glenn Cohen, Chief Executive Officer operations. The
loss of any of the Company's key management  personnel could  seriously  inhibit
the Company's operations.  Presently, the Company main source of revenue will be
from payment  from GOJO  Industries  including a payment as a percentage  of net
sales of the patented  hand washing  equipment.  No guarantee can be made, as to
the levels of sales which can be achieved by GOJO.

NEED FOR ADDITIONAL FINANCING. As of the fiscal year the Company shows a working
capital of  $33,548.  The  Company is  dependent  upon the initial and net sales
payments from GOJO as well as obtaining  additional  financing.  The Company may
not have enough cash to pay-off its current  payables and  operate.  There is no
assurance  that  additional  financing  will be  available.  The  Company has no
established borrowing arrangements or available line of credit.

                                       8
<PAGE>

ITEM 7  FINANCIAL STATEMENTS

         The  financial   statement  and   supplementary   data  listed  in  the
accompanying Index to Financial Statements are attached as part of this report.

NET/TECH INTERNATIONAL, INC.

LIST OF FINANCIAL STATEMENTS

The following financial statements of Net/Tech International,  Inc. are included
in Item 7:

Report of Independent Public Auditors                                        10

Balance Sheets                                                              F 1

Statements of Loss                                                          F 3

Statements of Cash Flows                                                    F 4

Statements of Shareholders' Equity - Inception Through November 30, 1998    F 7

Notes to Financial Statements                                               F11



All other  schedules for which  provision is made in the  applicable  accounting
regulation of the Securities and Exchange  Commission are not required under the
related instructions or are inapplicable, and therefore have been omitted.

                                       9

<PAGE>

                        REPORT OF INDEPENDENT ACCOUNTANTS


To the Board of Directors and Stockholders of
Net/Tech International, Inc.

We have  audited  the  accompanying  consolidated  balance  sheets  of  Net/Tech
International, Inc.
(a development  stage company) as of November 30, 1998 and 1997, and the related
consolidated  statements of loss and cash flows for the years ended November 30,
1998 and 1997 and for the period from  September  11, 1989  (inception)  through
November  30, 1998 and  consolidated  statements  of  stockholders'  equity from
inception through November 30, 1998. These consolidated financial statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audit.

We  conducted  our  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 consolidated  financial statements referred to above present
fairly,  in all  material  respects,  the  consolidated  financial  position  of
Net/Tech  International,  Inc.  as  of  November  30,  1998  and  1997  and  the
consolidated  results of operations,  cash flows and statements of stockholders'
equity and  deficit  accumulated  during the  development  stage from  inception
through  November 30, 1998 in  conformity  with  generally  accepted  accounting
principles.


                                      MIRSKY, FURST & ASSOCIATES, P.A.

Fort Lee, New Jersey
March 5, 1999

Except for Note 3 which is
March 15, 1999
<PAGE>

                          NET/TECH INTERNATIONAL, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                                 BALANCE SHEETS

                                     ASSETS


                                                     November 30,   November 30,
                                                        1998            1997
                                                    -------------   ------------
Current Assets
  Cash                                                   $160,334     $  832,502
   Accounts receivable                                      9,437             --
   Inventory                                                   --         41,479
   Prepaid expenses                                        12,419             --
                                                      -----------    -----------
             Total Current Assets                         182,189        873,981
                                                      -----------    -----------

Fixed Assets
------------

    Leasehold improvements                                 10,126         10,126
    Furniture and fixtures                                 44,023         35,494
    Machinery and equipment                                18,898         73,146
                                                      -----------    -----------
                                                           73,048        118,766
    Less:  Accumulated Depreciation                        26,474         20,096
                                                      -----------    -----------
                                                           46,574         98,670
                                                      -----------    -----------

Intangible Assets
   Patent application costs (net of accumulated
    amortization of $21,144 and $13,834 respectively)      52,633         59,942

Other Assets
   Security deposits                                       10,850          4,044
                                                      -----------    -----------

             TOTAL ASSETS                                $292,247     $1,036,637
                                                      ===========    ===========

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

                                       F1

<PAGE>

                          NET/TECH INTERNATIONAL, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                                 BALANCE SHEETS

                      LIABILITIES AND STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>

                                                             November 30,      November 30,
                                                                1998              1997
                                                          ---------------    ---------------
CURRENT LIABILITIES
<S>                                                       <C>                <C>            
   Accounts payable and accrued expenses and interest     $       146,883    $       102,397
     Obligations under capital lease-current portion                1,759              1,505
                                                          ---------------    ---------------
              Total Current Liabilities                           148,642            103,902

OTHER LIABILITIES
  Accrued compensation                                                 --            125,000
  Obligations under capital lease                                      --              1,759
  Deposits                                                          1,600                 --
                                                          ---------------    ---------------
             Total Other Liabilities                                1,600            126,759
                                                          ---------------    ---------------
             Total Liabilities                                    150,242            230,661

STOCKHOLDERS' EQUITY (DEFICIT)
   Common stock, $.01 par value; 20,000,000
      authorized; 9,324,637 and
      6,689,210 shares issued and outstanding,
      respectively                                                 93,246             66,892
   Additional paid-in capital                                   5,920,140          4,538,589
   Deficit accumulated during the development stage            (5,871,382)        (3,799,505)
                                                          ---------------    ---------------
             Total Stockholders' Equity                           142,004            805,976
                                                          ---------------    ---------------
             TOTAL LIABILITIES AND
                STOCKHOLDERS' EQUITY                      $       292,247    $     1,036,637
                                                          ===============    ===============
</TABLE>

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

                                       F2

<PAGE>

                          NET/TECH INTERNATIONAL, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                               STATEMENT OF LOSSES

<TABLE>
<CAPTION>
                                                                                                    January 10,
                                                                                                       1990
                                                        For the year          For the year          (inception)
                                                           ended                 ended                through
                                                        November 30,          November 30,          November 30,
                                                           1998                  1997                  1998
                                                        -----------           -----------           -----------
<S>                                                         <C>             <C>             <C>      
Revenue                                                 $    36,022           $        --           $    36,022
COSTS AND EXPENSES:
  Cost of sales                                              14,674                    --                14,674
  Marketing, general & administrative expenses            1,298,821               814,604             3,964,984
  Research, development and related expenses                419,013               391,939             1,381,794
  Depreciation and amortization                              20,266                18,974                90,681
                                                        -----------           -----------           -----------

OPERATING  LOSS                                         $(1,716,752)          $(1,225,517)          $(5,416,111)

OTHER (INCOME) AND EXPENSE:
   Interest income                                          (16,366)                   --               (40,528)
   Interest expense                                             409                   627                60,471
   Loss on abandonment of assets                            371,082                    --               371,653
   Loss on abandonment of patents                                --                    --                33,675
   Write-off of investment                                       --                    --                30,000
                                                        -----------           -----------           -----------
                                                            355,125                   627               455,271

NET INCOME (LOSS)                                       $(2,071,877)          $(1,226,144)          $(5,871,382)

NET INCOME (LOSS) PER SHARE                             $     (0.29)          $     (0.20)
                                                        ===========           ===========

Number of Shares Used In Computation                      7,085,086             6,024,262
                                                        ===========           ===========
</TABLE>

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

                                       F3

<PAGE>

                          NET/TECH INTERNATIONAL, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                            STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                                             January 10, 1990
                                                                                                                (inception)
                                                                                                                  through
                                                                     November 30,      November 30,            November 30,
FISCAL YEAR ENDED                                                       1998              1997                     1998
                                                                    ---------------   ---------------        ----------------
CASH FLOW FROM OPERATING ACTIVITIES:
<S>                                                                  <C>               <C>                     <C>           
   Net Profit (Loss)                                                  $(2,071,877)          $(1,226,144)          $(5,871,382)

   ADJUSTMENTS TO RECONCILE NET LOSS TO NET CASH
      USED IN OPERATING ACTIVITIES
             Depreciation                                                  12,873                14,564                66,284
             Amortization of intangible assets                              7,394                 4,410                22,145
             Write-off of patents and trademarks                               --                    --                35,927
             Loss on disposal of assets                                   119,795                    --               121,398
             Decrease in accrued expenses from Initial
                 public offering                                               --                    --                30,500
             Compensation and services paid in Common Stock               182,905               219,000               402,155
             Investment                                                        --                30,000
             Interest to affiliate paid in Common Stock                        --                    --                 6,856
             Accounts receivable                                           (9,437)                   --                (9,437)
             Inventory                                                     41,479               (41,479)                   --
             Prepaid expenses                                             (12,419)                   --               (12,419)
             Security deposits                                             (6,806)               17,990               (10,766)
             Accounts payable, accrued expenses and interest               44,486                74,833               200,414
             Accrued compensation                                         (12,500)                   --              (125,000)
             Deposits                                                       1,600                    --                 1,600
             Other                                                            (84)                   --                   (84)
                                                                      -----------           -----------           -----------
            Total Adjustments                                             256,786               289,318               759,573
                                                                      -----------           -----------           -----------
NET CASH (USED IN) OPERATING ACTIVITIES                                (1,815,091)             (936,826)           (5,111,809)
                                                                      -----------           -----------           -----------
CASH FLOW FROM INVESTING ACTIVITIES:
             Purchase of property and equipment-net                       (80,572)              (99,695)             (234,256)
             Patent and trademark acquisitions                                 --                    --               (82,704)
                                                                      -----------           -----------           -----------
NET CASH (USED IN) INVESTING ACTIVITIES                               $   (80,572)          $   (99,695)          $  (316,960)
                                                                      -----------           -----------           -----------
</TABLE>

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

                                       F4

<PAGE>

                          NET/TECH INTERNATIONAL, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                            STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>

                                                                                                            January 10,
                                                                                                               1990
                                                                                                            (inception)
                                                                                                              through
                                                                    November 30,      November 30,          November 30,
FISCAL YEAR ENDED                                                       1998              1997                 1998
                                                                   -------------   ---------------      --------------
CASH FLOW FROM FINANCING ACTIVITIES:
<S>                                                                    <C>                 <C>               <C>      
             Issuance of common stock                                  1,225,000         1,312,750           2,993,985
             Loan proceeds from affiliate                                      -                 -             634,182
             Repayment of debt to affiliate                                    -                 -            (169,357)
             Financing via capital leases                                      -                 -               4,551
             Other                                                             -                 -                 (16)
             Proceeds from debt                                                -                 -             130,000
             Deferred public offering costs                                    -                 -             (84,496)
             Issuance of common stock net of offering costs                    -                 -           1,054,078
             Proceeds from options sold                                        -           480,000             480,000
             Principal payments under capital lease                       (1,505)           (1,287)             (2,792)
             Proceeds of warrants exercised                                    -                 -             548,968
                                                                   -------------   ---------------      --------------
NET CASH PROVIDED BY FINANCING ACTIVITIES                              1,223,495         1,791,463           5,589,103
                                                                   -------------   ---------------      --------------

Net Increase (Decrease) in Cash and Cash Equivalents                    (672,168)          754,942             160,334
                                                                   -------------   ---------------      --------------
   CASH AND CASH EQUIVALENTS BEGINNING OF YEAR                           832,502            77,560                   -
                                                                   -------------   ---------------      --------------

   CASH AND CASH EQUIVALENTS END OF YEAR                           $     160,334   $       832,502      $      160,334
                                                                   =============   ===============      ==============

</TABLE>

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

                                       F5

<PAGE>

                          NET/TECH INTERNATIONAL, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                            STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>

                                                                                              January 10, 1990
                                                        November 30,      November 30,      (inception) through
FISCAL YEAR ENDED                                           1998             1997            November 30, 1998
                                                      -----------------  ----------------  ----------------------
<S>                                                              <C>               <C>                   <C>    
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:

Cash Paid During the Period For:
   Interest                                                      $ 409             $ 627                 $ 1,036
   Income Taxes                                                  $  --             $  --                 $    --
</TABLE>

Supplemental schedule of noncash activities:

   The Company recognized consulting expense of $12,605 for common stock in
   connection with contracts to vendors. The Company recognized $170,300 in
   compensation expense on options granted an employee. The expense was
   calculated on the difference between the fair market value of the options
   less the exercise price on the date of grant. The Company abandoned its
   original prototype and sustained a loss of $119,795 which was net of
   accumulated depreciation of $6,495.

   The Company abandoned all of its inventory in relation to the original
   prototypes and sustained a loss in the amount of $251,288.


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

                                       F6


<PAGE>


<TABLE>
<CAPTION>

                          NET/TECH INTERNATIONAL, INC.
                          (A DEVELOPMENT STAGE COMPANY)
            CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
                       INCEPTION THROUGH NOVEMBER 30, 1998

                                                                                     Deficit        Total
                                                                                   Accumulated      Share-
                                                                                   During the       holders'
                                           Common        Stock    Additional Paid  Development      Equity
                                           Shares        Amount      in Capital       Stage        (Deficit)
                                        -----------   ----------- ---------------  -----------    -----------
<S>                                       <C>         <C>           <C>            <C>            <C>        
JANUARY 10, 1990 (INCEPTION)

Shares issued at $.01 per unit
   For cash-private placement             3,162,500   $    31,625            --             --    $    31,625
   For promotional service provided          25,000           250            --             --            250
   For subscription receivable              750,000         7,500            --             --          7,500
   For organizational costs provided        100,000         1,000            --             --          1,000
   For patent assignment                    200,000         2,000            --             --          2,000

Shares issued at $1.00 per unit
   For cash-private placement               130,000         1,300       128,700             --        130,000
   Exercise of options                       30,000           300        29,700             --         30,000

                  Net (Loss)                                                          (154,151)      (154,151)
                                        -----------   -----------   -----------    -----------    -----------

          BALANCE NOVEMBER 30, 1990       4,397,500   $    43,975   $   158,400    ($  154,151)   $    48,224

DECEMBER 1, 1990 TO NOVEMBER 30, 1991

                  Net (Loss)                                                          (144,403)      (144,403)
                                        -----------   -----------   -----------    -----------    -----------

          BALANCE NOVEMBER 30, 1991       4,397,500   $    43,975   $   158,400    ($  298,554)   ($   96,179)

DECEMBER 1, 1991 TO NOVEMBER 30, 1992

Shares issued at $7.00 per share
   For cash - IPO                           149,110         1,491     1,042,279             --      1,043,770

Shares issued at $2.33 per share
   For Convertible Note                      55,787           558       129,426             --        129,984

Shares issued at $2.00 per share
   For Inside A Warrants                     10,000           100        19,900             --         20,000

Shares issued at $2.67 per share
   For Inside B Warrants                     10,000           100        26,600             --         26,700

Reduction of deferred offering costs             --            --      (212,813)            --       (212,813)

                  Net (Loss)                                                          (662,629)      (662,629)
                                        -----------   -----------   -----------    -----------    -----------
          BALANCE NOVEMBER 30, 1992       4,622,397   $    46,224   $ 1,163,792    ($  961,183)   $   248,833
                                        ===========   ===========   ===========    ===========    ===========
</TABLE>

                                       F7

<PAGE>
<TABLE>
<CAPTION>

                           NET/TECH INTERNATIONAL, INC
                          (A DEVELOPMENT STAGE COMPANY)
             CONSOLIDATED STOCKHOLDERS' EQUITY (DEFICIT) (CONTINUED)
                       INCEPTION THROUGH NOVEMBER 30, 1998

                                                                                     Deficit        Total
                                                                                     Accumulated    Share-
                                                                       Additional    During the     holders'
                                             Common       Stock         Paid-In      Development    Equity
                                             Shares       Amount        Capital        Stage        (Deficit)
                                          -----------   -----------   -----------   -----------    -----------
<S>                                         <C>         <C>           <C>           <C>            <C>        
DECEMBER 1, 1992 TO NOVEMBER 30, 1993

Shares issued at $7.50 per share
        For - IPO A Warrants                   33,230           332       248,893            --        249,225

Shares issued at $4.66 per share
       For Convertible Note A Warrants            500             5         2,325            --          2,330

Shares issued at $2.00 per share
        For Inside A Warrants                  25,000           250        49,750            --         50,000

Shares issued at $2.67 per share
            For Inside B Warrants               5,000            50        13,320            --         13,370

Proceeds from private placement:
       Shares issued at $2.50 per share        60,000           600       148,386            --        148,986

       Shares issued at $6.00 per share         3,000            30        17,870            --         17,900

       Shares issued at $2.42 per share        92,000           920       222,080            --        223,000

       Shares issued at $2.33 per share        10,000           100        23,250            --         23,350

Shares issued at $4.00 per share
          For Professional Services             2,000            20         7,980            --          8,000

                  Net (Loss)                                                           (656,814)      (656,814)
                                          -----------   -----------   -----------   -----------    -----------
          BALANCE NOVEMBER 30, 1993         4,853,127   $    48,531   $ 1,897,646   ($1,617,997)   $   328,180
                                          ===========   ===========   ===========   ===========    ===========

December 1, 1993 to November 30, 1994

Proceeds from private placement:
       Shares issued at $2.75 per share         2,000            20         5,480            --          5,500

                  Net (Loss)                                                           (521,615)      (521,615)
                                          -----------   -----------   -----------   -----------    -----------
          BALANCE NOVEMBER 30, 1994         4,855,127   $    48,551   $ 1,903,126   ($2,139,612)   ($  187,935)
                                          ===========   ===========   ===========   ===========    ===========
</TABLE>

                                       F8

<PAGE>
<TABLE>
<CAPTION>

                          NET/TECH INTERNATIONAL, INC.
                          (A DEVELOPMENT STAGE COMPANY)
             CONSOLIDATED STOCKHOLDERS' EQUITY (DEFICIT) (CONTINUED)
                       INCEPTION THROUGH NOVEMBER 30, 1998

                                                                                      Deficit         Total
                                                                                      Accumulated     Share-
                                                                        Additional    During the      holders'
                                             Common       Stock         Paid-In       Development     Equity
                                             Shares       Amount        Capital         Stage        (Deficit)
                                           ---------    -----------    -----------   -----------    -----------
<S>                                       <C>          <C>            <C>           <C>            <C>         
DECEMBER 1, 1994 TO NOVEMBER 30, 1995

                  Net (Loss)                                                           (235,508)      (235,508)
                                          ---------    -----------    -----------   -----------    -----------

          BALANCE NOVEMBER 30, 1995       4,855,127    $    48,551    $ 1,903,126   ($2,375,120)   ($  423,443)
                                          ---------    -----------    -----------   -----------    -----------

DECEMBER 1, 1995 TO NOVEMBER 30, 1996

Shares issued at $1.25 per share for        149,874          1,499        185,844            --        187,343
    Inside A & B Warrants

Proceeds from private placement:
Shares issued at $0.25 per share            150,000          1,500         36,000            --         37,500

Shares issued at $1.00 per share
       to acquire Pressure Point Tech        25,000            250         24,750            --         25,000

Shares issued at $1.00 per share
             for Convertible Loan           517,211          5,172        512,039            --        517,211

                  Net (Loss)                                                           (198,241)      (198,241)
                                          ---------    -----------    -----------   -----------    -----------
          BALANCE NOVEMBER 30, 1996       5,697,212    $    56,972    $ 2,661,759   ($2,573,361)   $   145,370
                                          ---------    -----------    -----------   -----------    -----------

DECEMBER 1, 1996 TO NOVEMBER 30, 1997

Proceeds from private placement:
Shares issued at $1.25 per share            626,000          6,260        776,240            --        782,500

Sale of options for $1.00 per option
    with an exercise price of $2.50              --             --        200,000            --        200,000

Sale of options for $.25 per option 
    with an exercise price of $2.50              --             --        270,000            --        270,000

Shares issued at $1.50 per share upon
    exercise of stock options               349,998          3,500        521,500            --        525,000
</TABLE>

                                       F9
<PAGE>
<TABLE>
<CAPTION>

                          NET/TECH INTERNATIONAL, INC.
                          (A DEVELOPMENT STAGE COMPANY)
             CONSOLIDATED STOCKHOLDERS' EQUITY (DEFICIT) (CONTINUED)
                       INCEPTION THROUGH NOVEMBER 30, 1998

                                                                                      Deficit       Total
                                                                                     Accumulated    Share-
                                                                       Additional     During the    holders'
                                            Common        Stock         Paid-In      Development    Equity
                                            Shares        Amount        Capital         Stage       (Deficit)
                                          ---------    -----------    -----------   -----------    -----------
<S>                                                   <C>                <C>          <C>           <C>   

Shares issued upon exercise of
    stock options                            16,000            160         15,090            --         15,250

Compensation expense for issuance                --             --         94,000            --         94,000
    of stock options
                  Net (Loss)                                                         (1,226,144)    (1,226,144)
                                          ---------    -----------    -----------   -----------    -----------
          BALANCE NOVEMBER 30, 1997       6,689,210    $    66,892    $ 4,538,589   $(3,799,505)   $   805,976
                                          ---------    -----------    -----------   -----------    -----------

DECEMBER 1, 1997 TO NOVEMBER 30, 1998

Shares issued at $2.00 per share            245,000           2450        487,550            --        490,000

Shares issued upon exercise of
    stock options                            20,000            200         24,800            --         25,000

Shares issued at $1.25 per share            100,000          1,000        124,000            --        125,000

Shares issued for consulting services        11,858            119         27,486            --         27,605

Shares issued as compensation expense         1,429             14          4,986            --          5,000

Shares issued at $1.75 per share             57,143            571         99,429            --        100,000

Shares issued at $1.50 per share            100,000          1,000        149,000            --        150,000

Proceeds from private placement
Shares issued at $.15 per share           2,099,997         21,000        294,000            --        315,000

Compensation expense for issuance
    of stock options                             --             --        170,300            --        170,300

                  Net (Loss)                                                         (2,071,877)    (2,071,877)
                                          ---------    -----------    -----------   -----------    -----------
          BALANCE NOVEMBER 30, 1998       9,324,637    $    93,246    $ 5,920,140   $(5,871,382)   $   142,004
                                          =========    ===========    ===========   ===========    ===========
</TABLE>

Share prices are rounded to the nearest penny.

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

                                       F10
<PAGE>

                          NET TECH INTERNATIONAL, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIALS STATEMENTS
                                NOVEMBER 30, 1998

NOTE 1 - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The Company was incorporated in Delaware on January 10, 1990. The Company is the
developer  of the  patented  Hygiene  Guard Hand Wash  Reminder  and  Monitoring
technology  which prompt and verifies  employee hand washing in any  environment
where hygiene is a priority. See Note 2 and Note 2a.

In  1993,  the  Company  formed  Multi-Monitoring   Systems,  Inc.,  a  Delaware
Corporation. As of November 30, 1995, no shares have been issued and the company
has no financial activity,  therefore,  it is not consolidated with Net/Tech. In
October 1995, the Company acquired Pressure Point Technologies (see Note 3). The
financial  statements  include the accounts for this subsidiary from the date of
acquisition.

CASH EQUIVALENTS

Cash and equivalents  consist of highly liquid interest bearing investments with
a maturity date at acquisition of three months or less.

ACCOUNTS RECEIVABLE

The Company  examines its accounts  receivable for their  collectibility.  As of
November 30, 1998, the Company  believes that all accounts  receivable are fully
collectible.

INVENTORY

The inventory is stated at the lower of cost or market in the year 1997. For the
fiscal year ended  November 30, 1998 the  inventory was written down to zero and
abandoned.

PROPERTY AND EQUIPMENT:

Property and Equipment are recorded at cost.  Depreciation is computed using the
straight-line  method over the  estimated  useful  life of the asset.  Leasehold
Improvements  are amortized over the shorter of the respective life of the lease
or the useful life of the improvements.

The  capitalized  prototype  costs and  related  accumulated  depreciation  were
written off in 1998.

Upon  the sale or  retirement  of  depreciable  assets,  the  cost  and  related
accumulated  depreciation  will be removed and the resulting profit or loss will
be reflected in income.  Expenditures  for  maintenance  and repairs are charged
against income as incurred.

Estimated useful lives are as follows:

          Machinery and Equipment                   5 - 10 years
          Furniture and Fixtures                    5 - 7 years

INTANGIBLE ASSETS:

Costs incurred in connection with filing patent and trademark  applications  are
capitalized.  Patents and  trademarks  granted are  amortized on a straight line
basis over a lifetime of 10 and 3 years, respectively.
Abandoned patents are expensed in the year of abandonment.

                                      F11
<PAGE>

                          NET TECH INTERNATIONAL, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIALS STATEMENTS
                                NOVEMBER 30, 1998


NOTE 1 - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT 
         ACCOUNTING POLICIES (CONTINUED)

LONG-LIVED ASSETS

In fiscal 1997, the Company adopted Statement of Financial  Accounting Standards
No. 121,  "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to be  Disposed  of" ("SFAS  121").  Long lived  assets and  identifiable
intangibles to be held and used are reviewed for impairment  whenever  events or
changes  in  circumstances   indicate  that  the  carrying  amount  may  not  be
recoverable.  Impairment  is measured by  comparing  the  carrying  value of the
long-lived  asset to the estimated  undiscounted  future cash flows  expected to
result from uses of the assets and their eventual  disposition.  The adoption of
SFAS No. 121 did not have a material  impact on the  results  of  operations  or
financial position of the Company.  During the year ended November 30, 1998, the
Company  continued its policy of accounting  for impairment of long lived assets
resulting in the write off of the prototype.

ORGANIZATION COSTS

Organization  costs were  capitalized  and are being  amortized over a five year
period.

RESEARCH AND DEVELOPMENT COSTS

Research, development and related engineering costs are expensed as incurred.

LOSS PER COMMON AND COMMON EQUIVALENT SHARE

The loss per common  share for the fiscal  years 1998 and 1997 was  computed  by
dividing  the  net  loss  by  the  weighted  average  number  of  common  shares
outstanding  during such periods.  Common stock equivalents were not included in
the computation of weighted average shares  outstanding  because their inclusion
would be anti-dilutive.

In February 1997, the Financial  Accounting Standards Board issued SFAS No. 128,
"Earnings Per Share",  which replaces current Earnings Per Share (EPS) reporting
for interim and annual  periods  ending  after  December 15, 1997 and requires a
dual  presentation  of basic and  diluted  EPS.  Adoption of SFAS No. 128 is not
expected to have a material impact on the Company's per share data.

USE OF ESTIMATES

The preparation of financial  statements in conformity  with generally  accepted
accounting principles requires management to make estimates and assumptions that
affect certain  reported  amounts and  disclosures.  Actual results could differ
from those estimates.

EMPLOYEES STOCK PLANS

The Company  accounts for its stock options in accordance with the provisions of
the  Accounting  Principles  Board (APB) Opinion No. 25,  "Accounting  for Stock
Issued  to  Employees."  In  accordance  with  SFAS  No.  123,  "Accounting  for
Stock-Based  Compensation," the Company continues to apply the provisions of APB
No. 25 for  purposes  of  determining  net income and has  adopted the pro forma
disclosure requirement of SFAS No. 123 effective December 1, 1996. (See Note 8).

                                      F12
<PAGE>

                          NET TECH INTERNATIONAL, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIALS STATEMENTS
                                NOVEMBER 30, 1998


RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In June 1997,  the  Financial  Accounting  Standards  Board issued SFAS No. 130,
"Reporting  Comprehensive Income," which establishes standards for reporting and
display of comprehensive  income and its components in a complete set of general
purpose financial statements; and SFAS No. 131, "Disclosure About Segments of an
Enterprise  and  Related  Information,"  which  establishes  annual and  interim
reporting  standards for a Company's  business segments and related  disclosures
about it's products,  services,  geographic areas and major customers. Both SFAS
No. 130 and SFAS No. 131 are effective for fiscal years beginning after December
15, 1997.  The Company  believes that the adoption of the new standards will not
have a material effect on the financial statements.

In June 1998,  the  Financial  Accounting  Standards  Board issued  Statement of
Financial  Accounting  Standards No. 133, Accounting for Derivative  Instruments
and Hedging  Activities.  This  statement  establishes  accounting and reporting
standards for derivative  instruments,  including certain derivative instruments
embedded in other contracts  (collectively referred to as derivatives),  and for
hedging   activities.   The  statement   requires  companies  to  recognize  all
derivatives as either assets or liabilities,  with the  instruments  measured at
fair value. The accounting for changes in fair value,  gains or losses,  depends
on the  intended  use of the  derivative  and  its  resulting  designation.  The
statement is effective for all fiscal  quarters of fiscal years  beginning after
June 15, 1999.  Adoption of this standard will not impact the financial  results
of the Company.

In February 1998, the Financial  Accounting  Standards Board issued SFAS No. 132
Employers  Disclosures About Pensions and Other Post Retirement Benefits,  which
revises  employers'  disclosures about pension and other post retirement benefit
plans, requires additional information on changes in the benefit obligations and
fair  values  of plan  assets  that  will  facilitate  financial  analysis,  and
eliminates  certain  disclosures that are no longer deemed useful. The statement
is effective for fiscal years  beginning  after  December 15, 1997.  The Company
believes that the adoptions of this standard will not have a material  effect on
the financial results of the Company.

NOTE 2 - LIQUIDITY AND BUSINESS RISKS

The Company had sales of $36,000 in the current  year ended  November  30, 1998.
The Company had an  accumulated  deficit of  $5,871,382 as of November 30, 1998.
The  accumulated  deficit was $3,799,505 on November 30, 1997.  Such losses have
resulted principally from research and development  expenditures and engineering
costs,  as  well  as the  expansion  of the  company's  staff  including  sales,
marketing and technical  support.  After the introduction of the product in 1998
the company  decided to abandon the  original  model and engineer a smaller less
complex  model.  As a result the company wrote off its inventory and  prototype.
The Company  also  decided to cut its sales,  marketing  and  technical  support
payroll at the end of fiscal 1998.

During the year the company raised  capital by the issuance of 2,635,427  shares
of common  stock for  $1,237,605.  Substantially  all the shares were subject to
Rule 144 of the Securities Exchange Commission.

NOTE 2A) MATERIAL SUBSEQUENT EVENTS

In March 1999, the Company sold its patent estate and product development. Under
the terms of the  agreement,  the Company  will  receive 10% percent of net U.S.
sales of the patented hand wash reminder and monitoring  technology for a period
of 10 years. The Company will also receive 5% of net U.S. sales for the next two
years,  2 1/2% of net U.S.  sales for the  following  three  years and 7% of all
foreign  net sales for a period of ten years.  In  addition,  the  Company  will
receive a down payment of $50,000 and minimum guaranteed payments of $12,000 per
month  for a period of  twenty  months.  The  purchaser  will also fund  product
development, patent prosecution protection and worldwide marketing.

                                      F13
<PAGE>

                          NET TECH INTERNATIONAL, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIALS STATEMENTS
                                NOVEMBER 30, 1998

Prior to the signing of this  contract,  the Company  could not meet its present
working capital  obligations.  The Company has been extremely slow in paying its
accounts payable. Certain vendors have contacted the Company and made demand for
payment. The Company believes that the signing of this contract will put it in a
position to meet its present and future working  capital  obligations.  However,
even though there are minimum guaranteed payments to the Company, there is still
a risk  factor to be assumed  by  investors.  While the  contract  provides  for
initial payments totaling $290,000  additional revenue is contingent upon GOJO's
sales of the patented equipment.

NOTE 3 - ACQUISITIONS

In November  1997,  the Company  acquired  Hospitality  Marketing and Purchasing
Corp.,  (HMP) for 100,000  authorized  but  unissued  shares of common  stock in
exchange  for 100% of the stock of HMP. HMP is a Florida  Corporation  formed by
Ron Heagle. HMP assets consisted principally of a planned Health and Food safety
reference guide and catalog and the industry acumen of Mr. Heagle.  Accordingly,
the shares issued to HMP were  accounted  for as an incentive  signing bonus for
the  personnel  services  of Mr.  Heagle and were  charged to the  statement  of
operations in the amount of $125,000.  The shares were not issued until December
1997,  the resulting  expense and liability have been accrued as of November 30,
1997.  The  shares  were  valued at the value  ascribed  to other Rule 144 stock
issued in the period of the  acquisitions.  On October 15,  1998,  Mr.  Heagle's
employment was terminated by the Board of Directors.

In October 1996, the Company acquired 100% of the common stock in Pressure Point
Technologies,  Inc., in a transaction  accounted for under the purchase  method.
The  Company   issued  25,000  shares  of  authorized   but  unissued  stock  in
consideration   for  the  stock  acquired.   Pressure  Point   Technologies  was
incorporated  in  Michigan  in  1996,  and the  assets  of the  company  consist
primarily of the technology for a battery less remote control for which a patent
was granted on March 31, 1998.

NOTE 4 - CONVERSION OF DEBT

Beginning  in April 1994,  the Company  borrowed  capital  for  operations  from
CRYO-CELL  International,  Inc.  The  amounts  borrowed  were  in  the  form  of
convertible  notes due on demand at an interest rate of 10% per annum. The notes
were  convertible  into the  common  stock of Net Tech  International,  Inc.  at
CRYO-CELL'S  discretion.  All of the  Company's  patent  rights were assigned to
CRYO-CELL as collateral for the notes.

On  November 1, 1995,  both  boards of  directors  of the  respective  companies
resolved to convert the notes into shares of  restricted  common stock valued by
the Company at $1. The Company issued 517,211 shares which satisfied  $52,386 in
accrued interest and the remaining $464,825 principal amount due.

NOTE 5 - PATENTS

Patents have been granted on the Hygiene Guard, TM, and on the water dispensable
technology. The patent applications and rights were assigned by the co-inventors
to the Company.  The assignments  included  rights to all related  developments,
modifications and improvements.  In consideration of the assignments each of the
co-inventors  received 100,000 shares of common stock of the Company,  valued at
$1,000, which approximates costs incurred by the co-inventors. The patent rights
were capitalized and recorded as an asset.

A patent  has also been  granted on a battery  less  remote  technology  and was
valued at $25,000 which is the value of the shares given. (See Note 3 )

                                      F14
<PAGE>

                          NET TECH INTERNATIONAL, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIALS STATEMENTS
                                NOVEMBER 30, 1998

NOTE 6 - WARRANTS

The Company issued 160,000 shares with detachable  Class A warrants at $1.00 per
share prior to the public  offering.  The IPO  consisted of 149,110  shares with
detachable  Class A warrants  exercisable at $7.50 per share.  In addition,  the
Company  issued 55,790 shares with  detachable  Class A warrants  exercisable at
$2.33 per share (conversion price) for the $130,000 convertible note. All of the
Class A warrants were  exercisable to purchase one share of common and one Class
B warrant. The Class B warrants were exercisable to purchase one share of common
stock.

NOTE 7 - OPTIONS

In 1992 the Company  adopted an Employee  Incentive  Stock Option Plan providing
for 250,000  shares to be  available  and the Company has set aside a reserve of
shares of that  amount for this  purpose.  In  addition,  the Company has issued
Non-Employee  Stock Options to individuals whose  contribution and assistance is
of benefit to the Company.

Stock option activity was as follows for the two years ended November 30, 1998:

                                                                Weighted Average
                                             No. of Shares       Exercise Price 
                                             -------------       -------------- 

Outstanding at November 30, 1996                   185,000         $   1.19

Granted                                          2,317,500         $   2.02
Exercised                                          365,000         $   1.48
Terminated                                               0                0

Outstanding at November 30, 1997                 2,137,500         $   2.02

Granted and Purchased                              490,000         $   1.66
Exercised                                           20,000         $   1.25
Terminated                                         130,000         $   2.35

Outstanding at November 30, 1998                 2,477,500         $   1.95

Significant option groups outstanding at November 30, 1998 and related price and
life information follows:

                                                               Weighted Average
   Range of Exercise                       Weighted Average       Remaining
        Price             Outstanding       Exercise Price     Contractual Life
        -----             -----------       --------------     ----------------

    $0.15 to $1.00         405,000              .30                 3.5
    $1.01 to $2.00         877,500             1.63                 1.7
    $2.01 to $4.99       1,080,000             2.50                 3.5
    $5.00                  115,000             5.00                 2.5

The Company applies Accounting  Principles Board Opinion No. 25, "Accounting for
Stock,  Issued to Employees" (APB 25) and related  Interpretations in accounting
for its stock options. Accordingly, in 1997, $94,000 in compensation expense was
recognized for its stock-based compensation.  During the year ended November 30,
1998,  $170,300 in  compensation  expense was recognized for the Company's stock
based compensation.  Had compensation cost for the options been determined based
upon the fair value at the grant date consistent with the alternative fair value
accounting

                                      F15
<PAGE>

                          NET TECH INTERNATIONAL, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIALS STATEMENTS
                                NOVEMBER 30, 1998

provided  for  under  FASB  Statement  No.  123,   "Accounting  for  Stock-Based
Compensation,"  the  Company's  net loss and net loss per share  would have been
$2,253,040  and $.32 for the year ended  November 30, 1998,  and  $1,708,719 and
$.28 for the year ended  November 30, 1997.  The weighted  average fair value of
each option granted during fiscal 1998 is estimated at $.72 at the date of grant
using the  Black-Scholes  option  pricing model with the following  assumptions:
risk-free interest rate of 5%, expected life of 3.2 years,  expected  volatility
of 1.27% and no dividend yield.  The weighted  average fair value of each option
granted  during fiscal 1997 is estimated at $1.36 at the date of grant using the
Black-Scholes  option  pricing model with the following  assumptions:  risk-free
interest rate of 6.3%, expected life of 1.2 years,  expected volatility of 133%,
and no dividend yield.

Weighted  average  grant date fair values are shown  below for groups  where the
stock price equals, exceeds and is less than the exercise price.

<TABLE>
<CAPTION>

                                           Weighted Average            Weighted Average
                                         Fair Value Per Share     Exercise Price Per Share
                                         --------------------     ------------------------
<S>                                           <C>                       <C>     
         1998
         Stock Price - Exercise Price         $   .62                   $    .25
         Stock Price - Exercise Price         $   .84                   $   3.47

         1997
         Stock Price - Exercise Price         $  2.02                   $   1.22
         Stock price - Exercise Price         $  1.02                   $   1.25

</TABLE>

The pro forma effect on net income is not representative of the pro forma effect
on net income in future periods because it does not take into  consideration pro
forma compensation expense related to grants made in prior periods.

NOTE 9 - STOCKHOLDERS' EQUITY

Other stock reserved for future issuance is as follows:

  Description                            Number of Shares          Expiration
  -----------                            ----------------          ----------

Reserve for options purchased by
non-employees                              1,530,000              1/99 to 01/00

Reserve for options granted for
non-employees                                272,500              5/99 to 11/03

Reserve for granted employee
options                                      650,000              1/99 to 10/03


$250,000 shares of the Company's stock has been put into reserve for an Employee
Stock  Option  Plan (the  Plan).  Employee  Options  granted  under the Plan are
exercisable  at 100% of the current  market  price and have a term of five years
from the date of grant.  The options  immediately  terminate  on the  employee's
termination  or in the case of permanent  and total  disability,  the option are
exercisable for a period of 30 days after termination.

                                      F16
<PAGE>

                          NET TECH INTERNATIONAL, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIALS STATEMENTS
                                NOVEMBER 30, 1998

NOTE 10 - RELATED PARTY TRANSACTIONS

Cryo-Cell  International Inc. owns 16.7% of the company's issued and outstanding
stock at November 30, 1998. It owned 28.2% as at November 30, 1997. There was no
intercompany charges.


NOTE 11 - SERVICES CONTRIBUTED

1)       In  1990,   promotional   services  were  provided  by  an  independent
         contractor in  consideration  for 25,000 shares of the Company's common
         stock.  The Company had  negotiated  the fair value of the  promotional
         services  rendered  under the terms of the  agreement  to be $250.  The
         Company has recorded the shares  issued at the fair market value of the
         service and expensed the promotion fees.

2)       In 1990,  organization costs were provided by an independent contractor
         in consideration  for 100,000 shares of the Company's common stock. The
         Company had been  billed  $1,000 and  determined  the fair value of the
         costs incurred to be $1,000. The Company had recorded the shares issued
         at the fair market value of the costs and capitalized the  organization
         costs (see Note 1).

3)       In 1993, a company was issued 2,000 shares of common stock at $4.00 per
         share for promotional services.

4)       During the year ended  November  30,  1997,  a key  employee was issued
         107,058  shares of common  stock as a  signing  bonus and for  services
         rendered.

5)       During the year ended  November 30, 1997,  another  employee was issued
         1,429 shares of common stock shares for services rendered.

6)       During the year ended  November 30, 1998,  two companies  were issued a
         total of 4,800 shares of common stock for consulting services.


NOTE 12 - COMMITMENTS AND CONTINGENCIES

The Company  entered into a lease for office space in Red Bank, New Jersey.  The
following  schedule  summarizes  future minimum lease payments  required under a
non-cancelable  operating  lease as of November 30, 1998:  The lease  expires in
2001.

                1999                              $  48,488
                2000                              $  49,582
                2001                              $  12,530

Rent expense for the periods ending  November 30, 1998 and November 30, 1997 was
$56,175 and $25,015, respectively.

On October 15, 1998, the Company entered into a 5 year employment agreement with
the  Company  President.   During  a  portion  of  fiscal  1998,  the  President
voluntarily waived his salary in an effort to conserve company resources.

                                      F17
<PAGE>

                          NET TECH INTERNATIONAL, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIALS STATEMENTS
                                NOVEMBER 30, 1998


NOTE 13 - INCOME TAXES

No  provision  for income  taxes was  recorded  for the two fiscal  years  ended
November 30, 1998 and 1997 due to net operating losses  incurred.  Net operating
loss carry forwards for federal tax purposes of approximately  $5,472,000 expire
from 2005 through 2013.

The company's gross deferred tax assets of $1,800,000 and $1,290,000 at November
30, 1998 and 1997  respectively,  represent the tax effect of net operating loss
carry forwards. Based upon the Company's earnings history, a valuation allowance
equal to the  amount of the  deferred  tax  assets  is  required  to reduce  the
Company's deferred tax assets to the amount realizable at present.


NOTE 14. - CAPITAL LEASES

The Company leases certain  equipment  under a capital  lease.  Leased  property
under capital leases include:

                             1998                       1997
                             ----                       ----

         Equipment         $4,551                      $4,551

At November 30, 1998 the future  minimum lease  payments  required under capital
leases are as follows:

         FISCAL YEAR ENDING

         November 30, 1999                               $1,913

         Less: Imputed interest                             154
                                                         ------
         Present value of minimum
         lease payments                                  $1,759

NOTE 15. - INITIAL PUBLIC OFFERING

In January 1992, the Company successfully  completed its initial public offering
in which the Company raised  $1,043,770  from the sale of 149,110 units at $7.00
per  unit.  After  expenses,  this  resulted  in a cash flow to the  Company  of
approximately $885,000.


                                      F18
<PAGE>

                          NET TECH INTERNATIONAL, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                   NOTES TO CONSOLIDATED FINANCIALS STATEMENTS
                                NOVEMBER 30, 1998

NOTE 16. - QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

Fourth quarter of 1997 was adversely  affected by accounting for the purchase of
HMP as employee  compensation in the amount of $125,000 and significant research
and development cost incurred.

Fourth quarter of 1998 was adversely  affected by the write off and  abandonment
of the prototype  and the product line  inventory in the amounts of $119,795 and
$251,288 respectively.  The fourth quarter was also affected by the value of the
option issued to an employee as compensation in the amount of $170,300.

                     1st              2nd              3rd               4th
1997               Quarter          Quarter          Quarter           Quarter
----               -------          -------          -------           -------

Net Loss          $   56,338       $  158,678       $  197,868        $ 813,260
                  ==========       ==========       ==========        =========

Loss per share    $      .01       $      .03       $      .03        $     .12
                  ==========       ==========       ==========        =========

Shares used in
Computation        4,860,806        5,855,417        5,924,009        6,677,034
                   =========        =========        =========        =========

1998

Net Loss          $  399,205       $  427,608        $ 355,574        $ 889,490
                  ==========       ==========        =========        =========

Loss per Share    $      .06       $      .06        $     .05        $     .13
                  ==========       ==========        =========        =========

Shares used in
Computation        6,820,419        6,872,495        6,872,495        7,085,086
                   =========        =========        =========        =========


                                      F19

<PAGE>

                                    PART III

Documents  incorporated by reference:  The  information  required by Part III of
From 10-KSB is  incorporated  by  reference  to the  Issuer's  definitive  proxy
statement  relating to the 1999 Annual Meeting of Shareholders which is expected
to be filed with the  Securities  and Exchange  Commission on or about March 30,
1999.

                                       11

<PAGE>
                                     PART IV

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

               (a)      Exhibits
                        3.1      Certificate of Incorporation
                        3.2      By-Laws (1)
                        4.1      Underwriter's Option (1)
                        10.2     Agreement with CRYO-CELL (1)
                        10.3     Long  term  Scientific   Consultation  Contract
                                 dated February 11, 1992 between the Company and
                                 Dr. Charles L. Beatty and Polymer  Products and
                                 Services  Co.,  including   assignment  of  all
                                 patent rights by Consultant (2)
                        10.4     Agreement with Valgene Associates, Dated August
                                 6, 1992 (3)
                        10.41    Agreement with Human Services Risk  Management,
                                 Inc. dated May 29, 1993 (3)
                        10.5     Employment   Agreement   dated  June  17,  1991
                                 between the Company and Joseph Knauer (2)
                        10.51    Employment  Agreement  dated  December 28, 1993
                                 between the Company  and Robert  Anthony  Fenno
                                 (3)
                        10.6     Convertible  Note to  CRYO-CELL  International,
                                 Inc. dated November 30, 1994 (3)
                        10.7     Convertible  note to  CRYO-CELL  International,
                                 Inc. dated November 30, 1995 (4)
                        10.8     Agreement  with  Pressure  Point  Technologies,
                                 dated October 29, 1996 (5)
                        10.9     Agreement  with Stainless  Design  Corporation,
                                 dated April 4, 1996 for Phase I development  of
                                 Hygiene Guard (5)
                        10.10    Agreement  with Stainless  Design  Corporation,
                                 dated October 31, 1996 for Phase II development
                                 of Hygiene Guard (5)
                        10.11    Agreement  between  the  Company  and  Glenn E.
                                 Cohen (5)
                        10.12    Employment  Agreement  dated  October  15, 1998
                                 between the Company and Glenn E. Cohen
                        21       List of Subsidiaries (5)
                        27       Financial Data Schedule

               (b)      Reports on Form 8-K
                        8-K filed October 16, 1998 relating to Item 6 and 7

--------------------------------------------------------------------------------
(1)      Incorporated  by reference to the Company's  Registration  Statement of
         Form S-1 (No.33-36198).
(2)      Incorporated  by reference to the Company's  Annual Report on Form 10-K
         for the year ended November 30, 1991.
(3)      Incorporated  by reference to the Company's  Annual Report on Form 10-K
         for the year ended November 30, 1994.
(4)      Incorporated  by reference to the Company's  Annual Report on Form 10-K
         for the year ended November 30, 1995.
(5)      Incorporated  by reference to the Company's  Annual Report on Form 10-K
         for the year ended November 30, 1996.
(6)      Incorporated  by reference to the Company's  Annual Report on Form 10-K
         for the year ended November 30, 1997.

                                       12
<PAGE>

                                   SIGNATURES


         Pursuant to the  requirements  of Section 13 or 15(d) of the Securities
Exchange  Act of 1934,  the  Company has duly caused this report to be signed on
its behalf by the  undersigned,  thereunto duly  authorized,  on the 16th day of
March, 1999.


                                       NET/TECH INTERNATIONAL, INC.



                                       By: /s/ GLENN E. COHEN
                                       -----------------------------------------
                                               Glenn E. Cohen
                                       President and Chief Executive Officer

         Pursuant to the  requirements  of the Securities  exchange Act of 1934,
this report has been signed below on March 16, 1999 by the following  persons in
the capacities indicated:

         /s/ KNUD GOTTERUP                                     Director
         ------------------------------
             Knud Gotterup


         /s/ JOSEPH LOURO                                      Director
         ------------------------------
             Joseph Louro

                                       13