##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-QSB
  þ
    
    Quarterly Report under Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the quarterly period ended May 31, 2006
 or
 o
    
    Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the transition period from to
 Commission File Number: 1-13484
 COHESANT TECHNOLOGIES INC.
  Delaware
    
    34-1775913(State or other jurisdiction of
Incorporation or organization)
    
    (I.R.S. Employer
Identification No.)
 5845 West 82nd Street, Suite 102, Indianapolis, Indiana
    
    46278(Address of principal executive offices)
    
    (Zip Code)
 317-871-7611
 
  þ o
 o þ
  o þ




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##### 



COHESANT TECHNOLOGIES INC.
 INDEX
 TABLE
OF CONTENTS
 PAGEPART IItem 1. Financial InformationCohesant Technologies Inc. Condensed Consolidated
Balance Sheets as of May 31, 2006 and November 30, 2005
    
    
    3Cohesant Technologies Inc. Condensed Consolidated
Statements of Operations for the Three Months Ended
May 31, 2006 and May 31, 2005
    
    
    4Cohesant Technologies Inc. Condensed Consolidated
Statements of Operations for the Six Months Ended
May 31, 2006 and May 31, 2005
    
    
    5Cohesant Technologies Inc. Condensed Consolidated
Statements of Cash Flows for the Six Months Ended
May 31, 2006 and May 31, 2005
    
    
    6Notes to Condensed Consolidated Financial Statements
    
    
    7Item 2. Managements Discussion and Analysis of Financial Condition
and Results of Operations
    
    
    16Item 3. Controls and Procedures
    
    
    23PART IIItem 5. Other information
    
    
    23Item 6. Exhibits and Reports on Form 8-K
    
    
    24SignaturesEX-31.1 302 Certification CEOEX-31.2 302 Certification CFOEX-32 906 Certifications
  2




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##### Table of Contents



PART I
 
 ITEM 1. FINANCIAL INFORMATION
 COHESANT TECHNOLOGIES INC.
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
 May 31, 2006
    
    
    November 30, 2005(Unaudited)ASSETS:Cash and cash equivalents
    
    $
    1,983,571
    
    
    $
    2,238,281Accounts receivable, net of allowance for doubtful
accounts of $307,072 and $284,628, respectively
    
    
    4,342,406
    
    
    
    4,125,062Inventories, net of allowance for obsolete and
slow-moving inventories of $221,997 and $195,425,
respectively
    
    
    3,855,857
    
    
    
    3,490,087Prepaid expenses and other
    
    
    308,860
    
    
    
    333,751Deferred tax assets
    
    
    240,200
    
    
    
    240,200Total Current Assets
    
    
    10,730,894
    
    
    
    10,427,381Property, plant and equipment, net
    
    
    1,609,818
    
    
    
    991,730License agreements, patents and other intangibles, net
    
    
    1,317,032
    
    
    
    1,392,499Goodwill
    
    
    8,074,149
    
    
    
    8,223,913Other noncurrent assets
    
    
    8,873
    
    
    
    8,484Total Assets
    
    $
    21,740,766
    
    
    $
    21,044,007LIABILITIES AND SHAREHOLDERS EQUITY:Accounts payable
    
    $
    2,005,517
    
    
    $
    1,622,153Accrued salaries, benefits and commissions
    
    
    687,796
    
    
    
    1,047,938Accrued income taxes
    
    
    567,896
    
    
    
    387,242Billings in excess of costs and estimated earnings
    
    
    100,764
    
    
    
    133,844Due to former owners of acquired business
    
    
    
    
    
    
    473,707Dividends payable
    
    
    446,382
    
    
    
    Other current liabilities
    
    
    429,046
    
    
    
    480,787Total Current Liabilities
    
    
    4,237,401
    
    
    
    4,145,671Deferred tax liability
    
    
    243,700
    
    
    
    243,700Total Liabilities
    
    
    4,481,101
    
    
    
    4,389,371Commitments and ContingenciesShareholders Equity:Common stock ($.001 par value, 10,000,000 shares
authorized and 3,150,058 and 3,123,089 shares
issued and outstanding, respectively)
    
    
    3,150
    
    
    
    3,123Additional paid-in capital
    
    
    11,366,078
    
    
    
    11,230,959Accumulated other comprehensive income
    
    
    45,723
    
    
    
    11,384Retained earnings
    
    
    5,844,714
    
    
    
    5,409,170Total Shareholders Equity
    
    
    17,259,665
    
    
    
    16,654,636Total Liabilities and Shareholders Equity
    
    $
    21,740,766
    
    
    $
    21,044,007
  3




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##### Table of Contents



COHESANT TECHNOLOGIES INC.
 
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
 For the Three Months EndedMay 31, 2006
    
    
    May 31, 2005NET SALES
    
    $
    6,792,400
    
    
    $
    5,702,957COST OF SALES
    
    
    3,710,539
    
    
    
    3,101,005Gross profit
    
    
    3,081,861
    
    
    
    2,601,952RESEARCH AND DEVELOPMENT EXPENSES
    
    
    278,325
    
    
    
    212,431SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
    
    
    2,004,101
    
    
    
    1,767,037TOTAL OPERATING EXPENSES
    
    
    2,282,426
    
    
    
    1,979,468Income from operations
    
    
    799,435
    
    
    
    622,484OTHER INCOME:Interest income
    
    
    5,356
    
    
    
    28,210Other income, net
    
    
    5,422
    
    
    
    5,734INCOME BEFORE TAXES
    
    
    810,213
    
    
    
    656,428INCOME TAX PROVISION
    
    
    (307,959
    )
    
    
    (249,442
    )NET INCOME
    
    $
    502,254
    
    
    $
    406,986EARNINGS PER COMMON SHAREBASIC
    
    $
    0.16
    
    
    $
    0.15DILUTED
    
    $
    0.15
    
    
    $
    0.15AVERAGE SHARES OF COMMON STOCK OUTSTANDING:BASIC
    
    
    3,129,898
    
    
    
    2,642,835DILUTED
    
    
    3,270,232
    
    
    
    2,730,462CASH DIVIDENDS DECLARED PER SHARE
    
    $
    0.14
    
    
    $
    0.135COMPREHENSIVE INCOMENet income
    
    $
    502,254
    
    
    $
    406,986Foreign currency translation adjustment
    
    
    24,623
    
    
    
    NET COMPREHENSIVE INCOME
    
    $
    526,877
    
    
    $
    406,986
  4




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##### Table of Contents



COHESANT TECHNOLOGIES INC.
 
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
 For the Six Months EndedMay 31, 2006
    
    
    May 31, 2005NET SALES
    
    $
    13,257,997
    
    
    $
    9,963,756COST OF SALES
    
    
    7,262,421
    
    
    
    5,335,960Gross profit
    
    
    5,995,576
    
    
    
    4,627,796RESEARCH AND DEVELOPMENT EXPENSES
    
    
    550,946
    
    
    
    443,249SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
    
    
    4,040,987
    
    
    
    3,205,680TOTAL OPERATING EXPENSES
    
    
    4,591,933
    
    
    
    3,648,929Income from operations
    
    
    1,403,643
    
    
    
    978,867OTHER INCOME:Interest income
    
    
    11,769
    
    
    
    50,158Other income, net
    
    
    7,177
    
    
    
    10,687INCOME BEFORE TAXES
    
    
    1,422,589
    
    
    
    1,039,712INCOME TAX PROVISION
    
    
    (540,663
    )
    
    
    (395,091
    )NET INCOME
    
    $
    881,926
    
    
    $
    644,621EARNINGS PER COMMON SHAREBASIC
    
    $
    0.28
    
    
    $
    0.24DILUTED
    
    $
    0.27
    
    
    $
    0.24AVERAGE SHARES OF COMMON STOCK OUTSTANDING:BASIC
    
    
    3,127,367
    
    
    
    2,633,916DILUTED
    
    
    3,255,062
    
    
    
    2,733,706CASH DIVIDENDS DECLARED PER SHARE
    
    $
    0.14
    
    
    $
    0.135COMPREHENSIVE INCOMENet income
    
    $
    881,926
    
    
    $
    644,621Foreign currency translation adjustment
    
    
    34,339
    
    
    
    NET COMPREHENSIVE INCOME
    
    $
    916,265
    
    
    $
    644,621
  5




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##### Table of Contents



COHESANT TECHNOLOGIES INC.
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 For the Six Months EndedMay 31, 2006
    
    
    May 31, 2005CASH FLOWS PROVIDED BY OPERATING ACTIVITIES:Net income
    
    $
    881,926
    
    
    $
    644,621Adjustments
to reconcile net income to net cash provided by operating activities
Depreciation and amortization
    
    
    232,599
    
    
    
    107,132Non-cash compensation
    
    
    67,224
    
    
    
    80,916Gain on asset disposal
    
    
    227
    
    
    
    Provision for doubtful accounts
    
    
    22,444
    
    
    
    13,470Net change in assets and liabilities-Accounts receivable
    
    
    (398,688
    )
    
    
    (281,106
    )Inventories
    
    
    (379,664
    )
    
    
    (3,253
    )Prepaid expenses and other
    
    
    24,891
    
    
    
    54,381Accounts payable
    
    
    383,364
    
    
    
    600,535Other current liabilities
    
    
    (206,011
    )
    
    
    (35,125
    )Billings in excess of costs and estimated earnings
    
    
    (33,080
    )
    
    
    Other noncurrent assets
    
    
    18,365
    
    
    
    (8,078
    )Net cash provided by operating activities
    
    
    613,597
    
    
    
    1,173,493CASH FLOWS USED IN INVESTING ACTIVITIES:Property and equipment additions
    
    
    (746,318
    )
    
    
    (114,423
    )Proceeds from sale of property & equipment
    
    
    350
    
    
    
    13,370Payment to former owners of acquired business
    
    
    (342,136
    )
    
    
    Return of cash paid for acquisition of CuraFlo
    
    
    77,250
    
    
    
    Net cash used in investing activities
    
    
    (1,010,854
    )
    
    
    (101,053
    )CASH FLOWS PROVIDED BY USED IN FINANCING ACTIVITIES:Proceeds from note receivable  restricted stock
    
    
    40,262
    
    
    
    Proceeds from exercise of stock options
    
    
    102,285
    
    
    
    56,935Cash dividends paid to stockholders
    
    
    
    
    
    
    (710,780
    )Net cash provided by (used in) financing activities
    
    
    142,547
    
    
    
    (653,845
    )NET INCREASE IN CASH AND CASH EQUIVALENTS
    
    
    (254,710
    )
    
    
    418,595CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
    
    
    2,238,281
    
    
    
    5,036,582CASH AND CASH EQUIVALENTS AT END OF PERIOD
    
    $
    1,983,571
    
    
    $
    5,455,177
  6




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##### Table of Contents



COHESANT TECHNOLOGIES INC.
 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
 Note 1  Background
     7




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COHESANT TECHNOLOGIES INC.
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
  Note 2  Basis of Presentation
    Note 3  Acquisition of CuraFlo
  8




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COHESANT TECHNOLOGIES INC.
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
    Current assets
    
    $
    864,667Property & equipment
    
    
    227,483Intangible assets
    
    
    1,343,000Goodwill
    
    
    7,233,895Total assets acquired
    
    
    9,669,045Liabilities assumed
    
    
    (783,599
    )Net assets acquired
    
    $
    8,885,446
 Unaudited pro forma results
  9




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COHESANT TECHNOLOGIES INC.
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
 Three Months Ended May 31,
    
    Six Months Ended May 31,2006
    
    2005
    
    2006
    
    2005Revenue
    
    $
    6,792,400
    
    
    $
    6,987,094
    
    
    $
    13,257,997
    
    
    $
    12,336,792Net Income
    
    
    502,254
    
    
    
    416,023
    
    
    
    881,926
    
    
    
    735,288Basic earnings per share
    
    
    0.16
    
    
    
    0.13
    
    
    
    0.28
    
    
    
    0.24Diluted earnings per share:
    
    
    0.15
    
    
    
    0.13
    
    
    
    0.27
    
    
    
    0.23
  Note 4  Earnings per Share
   Three Months Ended May 31,
    
    Six Months Ended May 31,2006
    
    2005
    
    2006
    
    2005Income available to
common stockholders
    
    $
    502,254
    
    
    $
    406,986
    
    
    $
    881,926
    
    
    $
    644,621Basic earnings per share:Weighted-average number of
common shares
outstanding
    
    
    3,129,898
    
    
    
    2,642,835
    
    
    
    3,127,367
    
    
    
    2,633,916Basic earnings per share
    
    $
    0.16
    
    
    $
    0.15
    
    
    $
    0.28
    
    
    $
    0.24Diluted earnings per share:Weighted-average number
of common shares
outstanding
    
    
    3,129,898
    
    
    
    2,642,835
    
    
    
    3,127,367
    
    
    
    2,633,916Stock Options
    
    
    112,640
    
    
    
    81,679
    
    
    
    100,001
    
    
    
    90,591Restricted Stock
    
    
    27,694
    
    
    
    5,948
    
    
    
    27,694
    
    
    
    9,199Diluted weighted-average
number of common
shares outstanding
    
    
    3,270,232
    
    
    
    2,730,462
    
    
    
    3,255,062
    
    
    
    2,733,706Diluted earnings per share
    
    $
    0.15
    
    
    $
    0.15
    
    
    $
    0.27
    
    
    $
    0.24
 10




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COHESANT TECHNOLOGIES INC.
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
 Note 5  Accounting for Stock-Based Compensation
  3 Months Ended
    
    
    6 Months EndedMay 31
    
    
    May 312006
    
    
    2005
    
    
    2006
    
    
    2005Net income, as reported
    
    $
    502,254
    
    
    $
    406,986
    
    
    $
    881,926
    
    
    $
    644,621Add: Stock-based
employee compensation
expense included in
reported net income,
net of related tax
effects
    
    
    19,699
    
    
    
    21,532
    
    
    
    40,538
    
    
    
    50,168Deduct: Total
stock-based employee
compensation expense
determined under fair
value based method for
all awards, net of
related tax effects
    
    
    (63,267
    )
    
    
    (34,063
    )
    
    
    (157,186
    )
    
    
    (75,230
    )Pro forma net income
    
    $
    458,686
    
    
    $
    394,455
    
    
    $
    765,278
    
    
    $
    619,559Earnings per share:Basicas reported
    
    $
    0.16
    
    
    $
    0.15
    
    
    $
    0.28
    
    
    $
    0.24Basicpro forma
    
    $
    0.15
    
    
    $
    0.15
    
    
    $
    0.24
    
    
    $
    0.24Dilutedas reported
    
    $
    0.15
    
    
    $
    0.15
    
    
    $
    0.27
    
    
    $
    0.24Dilutedpro forma
    
    $
    0.14
    
    
    $
    0.14
    
    
    $
    0.24
    
    
    $
    0.23
    11




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COHESANT TECHNOLOGIES INC.
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
 Note 6  Costs and Estimated Earnings on Uncompleted Contracts
  Costs incurred on uncompleted contracts
    
    $
    936,031Estimated earnings to date
    
    
    268,151Subtotal
    
    
    1,204,182Less  Billings to date
    
    
    (1,304,946
    )Total
    
    $
    (100,764
    )Included in the accompanying balance sheet under the following
caption:Costs and estimated earnings in excess of billings
    
    $
    Billings in excess of costs and estimated earnings
    
    
    (100,764
    )Total
    
    $
    (100,764
    )
  Note 7  Revolving Line of Credit
  Note 8  Segment Information
  12




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COHESANT TECHNOLOGIES INC.
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
   Three Months EndedMay 31, 2006
    
    CIPAR
    
    CMI
    
    GCI
    
    Corporate
    
    Eliminations
    
    ConsolidatedNet Sales:External customers
    
    $
    2,831,888
    
    
    $
    74,947
    
    
    $
    3,885,565
    
    
    $
    
    
    
    $
    
    
    
    $
    6,792,400Intersegment sales
    
    
    
    
    
    
    833,698
    
    
    
    
    
    
    
    
    
    
    
    (833,698
    )
    
    
    Total net sales
    
    
    2,831,888
    
    
    
    908,645
    
    
    
    3,885,565
    
    
    
    
    
    
    
    (833,698
    )
    
    
    6,792,400Depreciation and
amortization:
    
    
    54,821
    
    
    
    6,945
    
    
    
    54,222
    
    
    
    653
    
    
    
    
    
    
    
    116,641Net income (loss):
    
    
    187,359
    
    
    
    98,817
    
    
    
    484,355
    
    
    
    (268,277
    )
    
    
    
    
    
    
    502,254Identifiable assets:
    
    
    11,649,704
    
    
    
    1,023,768
    
    
    
    7,350,302
    
    
    
    1,716,992
    
    
    
    
    
    
    
    21,740,766Capital expenditures:
    
    
    15,671
    
    
    
    94,883
    
    
    
    428,912
    
    
    
    731
    
    
    
    
    
    
    
    540,197
 Three Months EndedMay 31, 2005
    
    CIPAR
    
    CMI
    
    GCI
    
    Corporate
    
    Eliminations
    
    ConsolidatedNet Sales:External customers
    
    $
    1,798,650
    
    
    $
    156,461
    
    
    $
    3,747,846
    
    
    $
    
    
    
    $
    
    
    
    $
    5,702,957Intersegment sales
    
    
    
    
    
    
    874,978
    
    
    
    
    
    
    
    
    
    
    
    (874,978
    )
    
    
    Total net sales
    
    
    1,798,650
    
    
    
    1,031,439
    
    
    
    3,747,846
    
    
    
    
    
    
    
    (874,978
    )
    
    
    5,702,957Depreciation and
amortization:
    
    
    4,889
    
    
    
    5,598
    
    
    
    40,603
    
    
    
    1,809
    
    
    
    
    
    
    
    52,899Net income (loss):
    
    
    160,088
    
    
    
    110,098
    
    
    
    423,183
    
    
    
    (286,383
    )
    
    
    
    
    
    
    406,986Identifiable assets:
    
    
    1,667,530
    
    
    
    887,539
    
    
    
    5,968,797
    
    
    
    5,779,243
    
    
    
    
    
    
    
    14,303,109Capital expenditures:
    
    
    1,378
    
    
    
    264
    
    
    
    37,834
    
    
    
    194
    
    
    
    
    
    
    
    39,670
 Six Months EndedMay 31, 2006
    
    CIPAR
    
    CMI
    
    GCI
    
    Corporate
    
    Eliminations
    
    ConsolidatedNet Sales:External customers
    
    $
    6,075,664
    
    
    $
    137,545
    
    
    $
    7,044,788
    
    
    $
    
    
    
    $
    
    
    
    $
    13,257,977Intersegment sales
    
    
    
    
    
    
    1,687,031
    
    
    
    
    
    
    
    
    
    
    
    (1,687,031
    )
    
    
    Total net sales
    
    
    6,075,664
    
    
    
    1,824,576
    
    
    
    7,044,788
    
    
    
    
    
    
    
    (1,687,031
    )
    
    
    13,257,977Depreciation and
amortization:
    
    
    113,480
    
    
    
    13,698
    
    
    
    103,966
    
    
    
    1,455
    
    
    
    
    
    
    
    232,599Net income (loss):
    
    
    418,431
    
    
    
    208,849
    
    
    
    792,137
    
    
    
    (537,491
    )
    
    
    
    
    
    
    881,926Identifiable assets:
    
    
    11,649,704
    
    
    
    1,023,768
    
    
    
    7,350,302
    
    
    
    1,716,992
    
    
    
    
    
    
    
    21,740,766Capital expenditures:
    
    
    22,951
    
    
    
    116,274
    
    
    
    606,362
    
    
    
    731
    
    
    
    
    
    
    
    746,318
 13




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##### Table of Contents



COHESANT TECHNOLOGIES INC.
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
 Six Months EndedMay 31, 2005
    
    CIPAR
    
    CMI
    
    GCI
    
    Corporate
    
    Eliminations
    
    ConsolidatedNet Sales:External customers
    
    $
    3,003,689
    
    
    $
    268,001
    
    
    $
    6,692,066
    
    
    $
    
    
    
    $
    
    
    
    $
    9,963,756Intersegment sales
    
    
    
    
    
    
    1,562,548
    
    
    
    
    
    
    
    
    
    
    
    (1,562,548
    )
    
    
    Total net sales
    
    
    3,003,689
    
    
    
    1,830,549
    
    
    
    6,692,066
    
    
    
    
    
    
    
    (1,562,548
    )
    
    
    9,963,756Depreciation and
amortization:
    
    
    9,740
    
    
    
    12,804
    
    
    
    80,468
    
    
    
    4,120
    
    
    
    
    
    
    
    107,132Net income (loss):
    
    
    215,474
    
    
    
    194,362
    
    
    
    721,134
    
    
    
    (486,349
    )
    
    
    
    
    
    
    644,621Identifiable assets:
    
    
    1,667,530
    
    
    
    887,539
    
    
    
    5,968,797
    
    
    
    5,779,243
    
    
    
    
    
    
    
    14,303,109Capital expenditures:
    
    
    1,583
    
    
    
    1,134
    
    
    
    110,313
    
    
    
    1,393
    
    
    
    
    
    
    
    114,423
  Three Months Ended May 31,2006
    
    2005Equipment and Parts
    
    $
    4,096,763
    
    
    
    60.3
    %
    
    $
    4,079,208
    
    
    
    71.5
    %Coatings
    
    
    1,516,942
    
    
    
    22.3
    
    
    
    1,608,546
    
    
    
    28.2Licensee
    
    
    61,827
    
    
    
    1.0
    
    
    
    15,203
    
    
    
    0.3Rehabilitation
    
    
    1,116,868
    
    
    
    16.4
    
    
    
    
    
    
    
    Total
    
    $
    6,792,400
    
    
    
    100
    %
    
    $
    5,702,957
    
    
    
    100
    %
 Six Months Ended May 31,2006
    
    2005Equipment and Parts
    
    $
    7,636,916
    
    
    
    57.6
    %
    
    $
    7,084,256
    
    
    
    71.1
    %Coatings
    
    
    3,010,121
    
    
    
    22.7
    
    
    
    2,855,297
    
    
    
    28.7Licensee
    
    
    105,438
    
    
    
    0.8
    
    
    
    24,203
    
    
    
    0.2Rehabilitation
    
    
    2,505,522
    
    
    
    18.9
    
    
    
    
    
    
    
    Total
    
    $
    13,257,997
    
    
    
    100
    %
    
    $
    9,963,756
    
    
    
    100
    %
  Six Months
    
    Six MonthsThree Months Ended
    
    Three Months Ended
    
    Ended
    
    EndedRegion
    
    May 31, 2006
    
    May 31, 2005
    
    May 31, 2006
    
    May 31, 2005United States
    
    
    57
    
    
    
    68
    
    
    
    57
    
    
    
    67Canada
    
    
    18
    
    
    
    5
    
    
    
    19
    
    
    
    7Asia/Pacific Rim
    
    
    11
    
    
    
    10
    
    
    
    10
    
    
    
    10Europe
    
    
    9
    
    
    
    12
    
    
    
    9
    
    
    
    11Other
    
    
    5
    
    
    
    5
    
    
    
    5
    
    
    
    5Total
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
 14




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##### Table of Contents



COHESANT TECHNOLOGIES INC.
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
 Note 9  Contingencies
  Note 10  Dividends
  15




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##### Table of Contents



COHESANT TECHNOLOGIES INC.
 
 ITEM 2.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS
 Acquisition of CuraFlo
   Reconfiguration of Business Units
  16




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##### Table of Contents



COHESANT TECHNOLOGIES INC.
 MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
     Results of Operations
 Three months ended May 31, 2006 as compared to the same period in the prior year.
  17




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##### Table of Contents



COHESANT TECHNOLOGIES INC.
 MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
        18




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##### Table of Contents



COHESANT TECHNOLOGIES INC.
 MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
 Six months ended May 31, 2006 as compared to the same period in the prior year.
       19




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##### Table of Contents



COHESANT TECHNOLOGIES INC.
 MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
  Liquidity and Capital Resources
      Critical Accounting Policies and Estimates
  20




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##### Table of Contents



COHESANT TECHNOLOGIES INC.
 MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
   Revenue Recognition.
    Accounts receivable.
 Inventory .
 21




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##### Table of Contents



COHESANT TECHNOLOGIES INC.
 MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
  Goodwill.
  Forward Looking Statements
  22




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##### Table of Contents



COHESANT TECHNOLOGIES INC.
 
 ITEM 3. CONTROLS AND PROCEDURES
    
 PART II
 
 ITEM 5. OTHER INFORMATION
   23




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##### Table of Contents



COHESANT TECHNOLOGIES INC.
 
 ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
 (a)
    
    Exhibit
 31.1
    
    302 Certification of Chief Executive Officer31.2
    
    302 Certification of Chief Financial Officer32
    
    906 Certification of Chief Executive Officer and Chief Financial Officer
 (b)
    
    Reports on Form 8-KAn 8-K was filed on March 27, 2006 to report the following; stock option grant to outside
directors (Item 1.01), earnings for the first quarter ended February 28, 2006 (Items 2.02
and 9.01) and the announcement of the election of Terrence Ozan as Director (Item 5.02
and 9.01).An 8-K was filed on April 28, 2006 to report the renewal of its $3,500,000 credit
facility through May 1, 2007 (Items 1.01, 2.03 and 9.01).An 8-K was filed on May 9, 2006 to report a semi-annual dividend payment of $0.14 per
share. (Items 8.01 and 9.01).
 24




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##### Table of Contents



SIGNATURES
   COHESANT TECHNOLOGIES INC.BY:
    
    /s/ Morris H. WheelerMorris H. WheelerPresident & Chief Executive OfficerBY:
    
    /s/ Robert W. PawlakRobert W. PawlakChief Financial Officer
 25