<PAGE>

                                 UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                             Washington, DC  20549

                                    FORM 10-K

[X] Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act
    of 1934 for the fiscal year ended March 31, 1999 or

[_] Transition report pursuant to Section 13 or 15(d) of the Securities Exchange
    Act of 1934 for the transition period from ___________ to _____________.

                       Commission file number 333-11591

                             Tice Technology, Inc.
            (Exact Name of Registrant as Specified in Its Charter)

            Delaware                                  62-1647888
    (State of Incorporation)               (IRS Employer Identification No.)

                           6711 Maynardville Highway
                          Knoxville, Tennessee  37918
                   (Address of Principal Executive Offices)

                                (423) 925-4501
             (Registrant's Telephone Number, Including Area Code)

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

                                                Name of Each Exchange
          Title of Each Class                    on Which Registered
          -------------------                    -------------------
                 None                                   None

         Securities registered pursuant to Section 12(g) of this Act:

                   Common Shares, $0.01 per value per share
                        Common Stock Purchase Warrants

  Indicate by check mark whether the registrant:  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirement for the past 90 days.                  Yes   X      No _____
                                                              -----

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

  The aggregate market value, as of June 24, 1999 (based upon the average bid
and asked prices on such date) of the voting and non-voting common equity held
by non-affiliates of the registrant was $1,755,798.

  The number of shares outstanding of each class of the registrant's common
stock as of June 24, 1999 was: 7,012,214 Common Shares, 750,000 Class B Common
Shares and 0 Class D Common Shares.

                          Exhibit Index on page 47.
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                               TABLE OF CONTENTS



<TABLE>
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                                                                                                    PAGE
<S>           <C>                                                                                   <C>
PART I
  Item 1.     Business..............................................................................   1
  Item 2.     Properties............................................................................  10
  Item 3.     Legal Proceedings.....................................................................  10
  Item 4.     Submission of Matters to Vote of Security Holders.....................................  10

PART II
  Item 5.     Market For Registrant's Common Equity And Related Stockholder Matters.................  10
  Item 6.     Selected Financial Data...............................................................  11
  Item 7.     Management=s Discussion and Analysis of Financial Condition and Results of Operations.  13
  Item 7A.    Quantitative and Qualitative Disclosures About Market Risk............................  21
  Item 8.     Financial Statements and Supplementary Data...........................................  21
  Item 9.     Changes in and Disagreements with Accountants on Accounting and Financial Disclosures.  41

PART III
  Item 10.    Directors and Executive Officers of the Registrant....................................  41
  Item 11.    Executive Compensation................................................................  43
  Item 12.    Security Ownership of Certain Beneficial Owners and Management........................  44
  Item 13.    Certain Relationships and Related Transactions........................................  45

PART IV
  Item 14.    Exhibits, Financial Statement Schedules, and Reports on Form 8-K......................  47

SIGNATURES
</TABLE>
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                                    PART I

Item 1. Business.

The Company
-----------

     Tice Technology, Inc. ("TTI") is a holding company which was formed on June
21, 1996 by Tice Engineering & Sales, Inc. ("TES") and Monogenesis Corporation,
a closed-end investment company ("Monogenesis"), to acquire and hold the issued
and outstanding stock of TES. On August 1, 1997, TTI acquired all of the issued
and outstanding TES stock in exchange for 5,450,220 of its Common Shares and
750,000 of its Class B Common Shares. TTI also issued 300,000 Common Shares and
1,000,000 Common Stock Purchase Warrants (the "Warrants") for $.01 each to
Monogenesis, most of which were distributed to Monogenesis' shareholders. This
established TTI's shareholder base of approximately 1,200 institutional
investors. TTI also issued 88,560 Common Shares in satisfaction of certain of
TES's debts. Upon completion of the exchange, TES became a wholly owned
subsidiary of TTI. TTI's Common Shares trade on the Electronic Bulletin Board
under the symbol TICE.

     TES was incorporated in 1973 and is an engineering firm which provides
engineering and technical solutions, generally through the development or
enhancement of equipment, for the apparel industry. TES researches, designs,
develops, tests, manufactures and markets specialized high technology, garment
production line stitching machines and related equipment. During manufacture and
assembly, the arrangement of component parts of a tice7 product are configured
to meet the purchaser's special production line application requirements.
Accordingly, most of TES's products are made-to-order pursuant to customer
specifications as indicated on purchase orders received from customers.
Generally, a potential customer outlines a need or problem relating to its
manufacturing process, TES reviews the need as it would apply to the industry as
a whole and estimates the cost to provide the product or service. Once
manufactured for the initial customer, TES retrofits the unit to fit
specifications for other customers that would also benefit from the new TES
product that lessens or solves the problem encountered in their same
manufacturing process. TES obtains patents on many of its products which, when
patented, it licenses to other manufacturers to produce or contract manufactures
for its own customers. TES generally retains the rights to the design of all
products it designs and manufactures.

     Prior to October 1996, 95% of TES's revenues were derived from the sale of
products designed and manufactured by TES and further described below. The
remaining revenues were derived from rents received from real property owned by
TES and some consulting fees. TES sold the rental real estate on September 30,
1996. The consulting fees are very minor as independent revenues; traditionally
these fees are encompassed in the design and manufacture of TES's products for a
particular customer. In January 1997, TES granted a major sewing machine
manufacturer, Brother Industries, Ltd. of Nagoya, Japan, a nonexclusive license
to make, assemble, use and sell products incorporating TES's patented electronic
gearing technology and know-how. Since that time approximately 18% of TES's
revenues have been derived from license fees and in June 1997 TES began
receiving income from royalties on sales of machines produced under the license.
Royalty income represented 20% of TES's revenues for the year ending March 31,
1999. TES also
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manufactures replacement parts for its products and a few minor attachments and
provides consulting services at hourly rates.

     During the past six years, in addition to marketing and selling the
conventional product line that it has sold for some time, TES has spent
considerable time developing new technology and obtained four patents, two in
1994, one in 1995 and one in 1998. The bulk of the research efforts since 1993
have been centered on the electronic gearing technology. This technology was
initially developed for the double needle belt loop machine and, by using a
computer and servo motors, eliminates approximately 90% of the mechanical parts
as well as certain other technical problems associated with the previous
machine.

     TES's success is dependent on its ability to provide solutions to the
sewing industry (and, to a certain extent, some other industries) through its
existing products or by developing new or enhanced products. TES believes the
electronic gearing technology has application to many other types of machines
including machines used in industries other than the sewing industry, such as
the automotive industry. To date, in addition to the double needle belt loop
machine and the lap seam felling machine (see "Business - Research and
Development"), TES has built "proof of concept" models of the multi-head
buttonhole machine and, the plain lock stitch sewing machine.

     The Company believes that the income received from license fees and
royalties will increase over the next several years. This belief is based on
forecasts of increased sales of the equipment produced under license in the
December 1997 Bobbin magazine as well as anticipated successful results of
current negotiations with other manufacturers to enter into additional license
agreements. The Company also anticipates increased sales revenues in the current
fiscal year upon startup of production of the lap seam felling machine under the
joint development agreement described in the section labeled Research and
Development.

Products
--------

Standard Products
-----------------

     TES sells various products mainly to the sewn products industry. Many of
its products are covered by patents which generally provide protection for
seventeen to twenty years from date of issue. TES's basic products include:

1)   Twin Needle Belt-Loop Sewing Machine -- Patent #5,458,075 issued October
     17, 1995.

2)   Ergonomic Stands (pneumatic and electronic) -- Patent #5,313,893 issued May
     24, 1994.

3)   Single Needle Belt Loop Machines -- Prior patents, if any, have expired.

4)   Button Hole Indexers -- Prior patents, if any, have expired.

5)   Takeaway Mechanisms -- Patent #5,303,910 issued April 19, 1994.

                                       2
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6)   Indexing Stackers -- (incorporates takeaway Mechanism covered under patent
     #5,303,910).

7)   Label Loader/Folders -- Patent #4,677,923 and #4,979,934 issued July 7,
     1987 and December 25, 1990 respectively.

8)   Automatic "J" Tackers -- Prior patents, if any, have expired.

9)   Belt-Loop Winders -- No patents exist on this product.

10)  Needle Positioners -- Prior patents have expired.

11)  Pocket Creasers -- No patents exist on this product.

12)  Pneumatic Circuit Boards -- No patents exist on this product although the
     circuit boards created were copyrighted from 1976 to 1986.

13)  Air Operated Clamp Lifts -- Prior patents have expired.

14)  Electronic Gearing Components for Sewing Machines -- Covered by patent
     #5,458,075 issued on October 17, 1995 and patent #5,839,382 issued on
     November 24, 1998.

New Product Development
-----------------------

     TES continues to develop new products and upgrade existing products to meet
its customer's needs and to provide solutions to problems not previously
addressed by other equipment manufacturers. The end result developed by TES is
targeted to provide the customer with benefits such as increased production,
less down-time and maintenance cost, less operator fatigue, less operator
training, and increased flexibility to change equipment specifications on site.
During the fiscal year ending March 31, 1999, TES introduced the following new
products and product upgrades:

1)   Single Needle Loop Machines -- This product is an attachment that works
     with a customer's existing sewing-head to automate the process of attaching
     the single loop onto the tongue of athletic shoes. The machine feeds the
     loop out to the proper length, cuts the loop and folds both ends under by
     way of turning pins. Next the operator activation presents the pre-cut,
     pre-folded loop to the shoe tongue whereupon two air-operated presser feet
     descend upon the folded loop ends, the turning pins then retract, one end
     of the loop is sewn, the unit indexes and the opposite end of the loop is
     sewn. The presser feet return to the up position, the operator moves the
     material and the process is repeated.

2)   Label Loaded -- This product is an attachment that works with a customer's
     existing sewing head to automate the process of attaching soft woven labels
     to garments. The label loader feeds a woven label from a hopper inserting
     it into a specially designed clamp. The operator needs only to place the
     garment under the clamp and engage the sewing cycle. Upon completion of the
     sewing cycle, the garment is removed and the process is repeated thus

                                       3
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     allowing greater accuracy in placement of hard-to-handle soft woven labels.
     This product will be made available to accommodate labels of different
     sizes. Label sizes can then be changed on existing units with
     interchangeable conversion kits.

     During the fiscal year ending March 31, 1999, sales of Automatic J-Tackers,
Single Needle 'Loop' Machines and Label Loader/Folders generated sales of 17.7%,
21.6% and 20.0% respectively. During fiscal year ending March 31, 1998, sales of
the Label Loader/Folders and Single Needle Belt Loop Machines contributed 22.5%
and 22.4% to product sales respectively. Sales of Ergonomic Stands represented
12.8% of product sales revenues in the 1998 period. During fiscal year 1997,
sales of the Label Loader/Folders contributed 34% to product sales revenues with
sales of the folders divided between two models representing 18% and 16%
respectively. Sales of the J-Tackers represented 16% of product sales revenues
in the 1997 period. Management expects that products containing the electronic
gearing technology will become its dominant products over the next several
years.

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

     The Company relies on a combination of patent, trade secret and trademark
laws, confidentiality procedures, and contractual provisions to protect its
intellectual property. TES patents many of the products it develops. TES
currently has seven patents under which it is producing products and is working
on designs for additional products. The patents have expiration dates ranging
from 2004 to 2015. TES also sells products on which it holds patents that have
expired. TES is currently working on obtaining patent protection in countries
other than the U.S. on its electronic gearing technology and has applied for a
second U.S. patent on the technology. In February 1998, TES announced that it
received a favorable report regarding the international patents from the
International Preliminary Examining Authority on the Company's electronic
gearing technology. The report indicated that all 46 claims of the application
met the requirements for novelty, inventive step and industrial applicability.

     In addition to patents, the Company also holds registered trademarks on its
name "Tice" as well as the name "Tice Technology" and related logo. The
registration certificate for the name "Tice" was obtained from the U.S. Patent
and Trademark Office in 1980 and the registration certificate for the name "Tice
Technology" and related logo was obtained June 10, 1997. The registered name
"Tice Technology" and related logo are required to be prominently displayed on
all equipment, advertisements, and printed matter which relates to equipment
produced under license from TES that incorporates TES's patented electronic
gearing technology.

Research and Development
------------------------

     The Company conducts an active and ongoing research, development and
engineering program that focuses on advancing the electronic gearing technology
as well as improving the performance of current products, developing new
products both with and without the electronic gearing technology, and expanding
the electronic gearing technology to serve new markets. When a sewing
manufacturer or other customer comes to TES with a production or ergonomic
problem, TES will generally consult, build and then manufacture a piece of
equipment designed to eliminate

                                       4
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or lessen production or ergonomic problems or enhance production capabilities.
Once the piece of equipment has been designed and produced as required by the
customer, TES generally retains rights to the design and then offers the
equipment and technology to the industry as a whole. In many cases, TES obtains
a patent on the process to protect its rights. TES also has the option to
license other manufacturers to produce and market the product in exchange for
license fees and royalties.

     TES is in the process of designing the following equipment which uses TES's
patented electronic gearing technology:

     .  A felling machine (virtually complete)

     .  A multi-head button hole machine (proof of concept model completed)

     .  A single needle plain sewer (proof of concept model completed)

     .  A multi-head button sewing machine (initial prototype development)

     .  A sewing machine capable of sewing in three dimensions for use in sewing
        automotive air bags (project in initial design phase)

     With respect to the felling machine, TES entered into a Joint Development
Agreement with a denim clothing manufacturer to develop a felling machine
suitable for inseaming jeans using TES's electronic gearing technology. Under
the agreement, TES retains ownership of the technology, but granted the
manufacturer a nonexclusive, paid-up license to the jointly developed felling
machine. The manufacturer paid TES a fee of $300,000 to develop the felling
machine. In return, in addition to the license, it has the exclusive right after
production of the first felling machine to purchase the resulting felling
machines so long as it purchases a minimum of the lesser of TES's entire
production or 249 machines during each year. The cost of each machine to the
manufacturer is not to exceed $20,000 per machine. With respect to felling
machines sold to any other company, the manufacturer is entitled to receive a
royalty of 4% of the gross selling price until such time as it has received an
amount equal to the amount paid by it to develop the product plus interest at a
rate of 10% per annum. Although the denim manufacturer put a hold on the project
in November 1996 due to plant reorganizations which limited its ability to take
delivery of the machines, TES resumed work on the project independent of the
manufacturer in June 1997. TES currently is fine tuning the pre-production model
and expects to ship at least 10 production units by September 30, 1999.

     TES incurred research and development expenses of $163,204, $208,407, and
$172,590 respectively in fiscal years 1997, 1998, and 1999. As the demand for
the Tice electronic gearing technology grows, the Company is making preparations
to meet the existing and expected future demands by increasing engineering
personnel.

                                       5
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Market
------

     TES's customers are primarily, but not exclusively, apparel manufacturers.
In addition to providing products used in apparel manufacturing, TES has
designed and built special equipment for Ford Motor Company, Lockheed Aerospace,
Camel Tent and Awning, and California Sail and Rigging as well as a number of
furniture manufacturers and medical supply companies. The Company continually
strives to broaden its customer base by obtaining new customers and by
increasing its business with those existing customers which have historically
comprised a small percentage of the Company's revenue, as well as by developing
products for industries outside of the apparel industry that would benefit from
the Company's technology. For example, TES is currently developing a machine
incorporating the electronic gearing technology to allow three-dimensional
sewing of airbags for the automotive industry.

     The Company markets its products and services worldwide with the primary
concentration of sales being in North America, South America, and Europe. TES
distributes its products to end users through direct technical sales persons as
well as through an independent sales and distribution network of approximately
125 dealers. In addition, TES advertises in one or more of the apparel
industry's international trade magazines and regularly attends apparel industry
trade shows as an exhibitor to display its equipment and technology. The Company
exhibited at the IMB Show in Cologne, Germany in May 1997, at the Bobbin Show in
September 1997, and at the Bobbin World Show in Atlanta, Georgia in September
1998. The Company plans to exhibit equipment at the Bobbins Americas Show in
Atlanta, Georgia in September/October, 1999 and at the IMB Machinery Show to be
held in Germany in June, 2000. Several of the Company's distributors also
display Tice equipment in their booths at various trade shows. Since January
1999, TES's distributors have displayed Tice equipment at the following trade
shows: April 1999, Sewn Products Expo in Los Angeles, California; May 1999,
Apparel Sourcing Show, Guatemala City, Guatemala; May 1999 JIAM (Japan
International Apparel Machinery) Show in Tokyo, Japan; and May 1999, Bobbin Expo
in Mexico City. Upcoming trade shows in which distributors may display Tice
equipment include: Bobbin Expo in Sao Paulo, Brazil, August 1999; and The 807
Laguna Show, Torreon Mexico, October 1999. All equipment manufactured by TES
bears the Company's registered trademark, and applicable patent numbers.
Equipment produced under a license agreement from the Company is advertised in
trade publications and displayed in trade shows by the licensee with the "Tice
Technology(R)" registered logo, trademark, and patent numbers properly
displayed.

     International sales represented 6%, 24%, and 13% of total revenues in the
fiscal years ending March 31, 1997, 1998, and 1999 respectively. The reduced
international sales in the 1999 period was primarily the result of shipments
being held pending resolution of delinquent account balances due from one of the
Company's primary international distributors. Management is currently reviewing
the distributor's account and has taken measures to insure that the end users of
the equipment will receive ongoing sales, service, and support by increasing
direct sales to end users as well as signing additional distributors to cover
the growing Latin American market. All export sales are paid in U.S. Funds,
either in advance of shipment or with an irrevocable letter of credit,
therefore, there are no gains or losses included in operations related to
foreign currency exchanges. To better serve its international customers, the
Company's customer service department has personnel who are fluent in German and
Spanish.

                                       6
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Revenue Sources
---------------

Product Revenue
---------------

     Historically, TES has primarily designed and manufactured special
application equipment and attachments for denim (blue jeans) and work wear
manufacturers. It also has manufactured equipment for other types of sewing
manufacturers that produce drapery products; upholstery; shoes; sewn medical
supplies; boat, car, and aircraft interiors; and general apparel. In fiscal
1999, TES received approximately 65% of its annual product revenue from three
primary customers, Wrangler, Inc. ("Wrangler," d.b.a. "VF Jeanswear"), Levi
Strauss & Company ("Levi"), and Superior's of Mexico. Sales to Wrangler and
Levi, two denim and work wear manufacturers, accounted for 30.5% and 22.3%
respectively of total product revenue during the 1999 fiscal year. Sales to
Superior's, an equipment distributor for the apparel industry, accounted for
12.3% of product revenue for the 1999 year. Substantially all of TES's license
fee and royalty revenue to date is from one customer, Brother Industries, Ltd.
("Brother") of Nagoya, Japan. The loss of any of these customers could
materially affect TES's revenues and net income. However, management believes
that, as it further develops uses for the electronic gearing technology, such as
the three-dimensional stitching machine for automotive airbags, TES's dependence
on a few customers or segment of the sewing industry will lessen or disappear.
TES is also in various stages of formal and informal negotiations with various
other manufacturers of equipment for the license of the electronic gearing
technology.

License and Royalty Revenue
---------------------------

     TES granted Brother a nonexclusive license effective as of January 1, 1997
to make, assemble, use, and sell products (consisting of up to twelve categories
of industrial sewing machines) incorporating the electronic gearing technology
and know-how and related additional technology which may be developed by TES.
The license is granted for the term of the applicable patent. TES is also
required to provide Brother with technical assistance and training. In return
for the license, if certain conditions are met, in addition to royalties, TES is
entitled to license fees for each category of machine developed by Brother using
the technology which, if all machines are developed will total $6,000,000. TES
received an initial license fee of $250,000 corresponding to the first category
of machines (the electronic double-needle tacker) on February 25, 1997 and in
April 1997 received a payment of $250,000 corresponding to the second category
of machines (the multi-head embroidery machine). Brother has agreed to pay TES
$250,000 within thirty days of the date of the first commercial shipment of a
product in any of the remaining ten categories and $250,000 within sixty days of
the date the aggregate net sales of products in a category equals $30,000,000.
In addition, TES is entitled to a continuing royalty of 2% of net sales, 1.75%
of net sales relating to additional "know-how" provided by TES to Brother and
80% of any sub-license income of Brother relating to the TES technology during
the life of the patent or any continuation thereof. Brother is required to pay
TES additional fees at TES published rates for technical assistance and
training.

     All products produced under license from TES must prominently display the
registered "Tice Technology(R)" trademark on the equipment, service manuals,
advertisements and other related items. Brother has developed machines in two
categories which it is actively advertising and promoting at trade shows and
selling. Royalties on net sales of equipment sold under license were to be
reported

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at the end of each six-month period, June and December each year, and are paid
within thirty days after such report. Royalties reported in July 1997 for the
period January through June 1997 totaled $12,908. Royalties reported in January
1998 for the period July 1997 through December 1997 totaled $102,664. In
February 1998, TES requested that Brother report royalties on a quarterly basis
although payment would remain due on a semi-annual basis. This change in
reporting requirements allowed management to reflect the amount of royalties due
on each quarterly financial report. Brother complied with the requested
reporting change and in April 1998 reported royalties due for the period January
1998 through March 1998 which totaled $85,946 for the three month period. Income
from royalties was $144,751 for the fiscal year ending March 31, 1999 as
compared to $201,518 for the fiscal year ending March 31, 1998. Management
believes that this reduction was primarily due to the slowdown in the Asian
markets for TES's licensee. Management anticipates that revenue from license
fees and royalties will increase as Brother introduces more machines using the
electronic gearing technology and as Brother's sales of the two existing
machines increase.

Backlog
-------

     As of March 31, 1999, TES had backlog orders it believes to be firm
totaling approximately $280,000 of which approximately $65,500 is for equipment
that is part of the Company's standard product line and is expected to be
completed by June 30, 1999. The backlog also reflects orders of approximately
$214,000 for eleven FS2000 Felling Machines. Delivery of the FS2000 is expected
to begin in the Fall of 1999 as a result of the successful completion in June
1999 of the Company's private placement offering. In addition, the Company has
received requests from 69 different manufacturers for a FS2000 trial unit. The
Company also has indications of interest for additional orders totaling
approximately $1,200,000 relating to products, other than the felling machine,
using the electronic gearing technology upon completion of production models and
$490,000 for new products currently being developed using traditional
technology. There is no assurance that these indications of interest will become
firm orders.

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

     Management believes that all of the large Japanese and most of the other
manufacturers of equipment for the apparel industry maintain research and
development departments which perform research along the same lines as TES. All
of these companies are much larger than TES and have much larger research and
development facilities. In addition, management estimates that there are four
companies of approximately the same size as TES that provide similar services
and products. The Company's management is also aware of two companies in Europe
which perform similar services, but does not know the size of the companies.

     Like TES, most of these competitors perform research and development at a
customer's request. TES has found that its competitors have designed products
(none of which use the electronic gearing technology) similar to TES's Single
Needle Belt Loop Machine, Ergonomic Stands, and Pocket Creasers to which extent
there is direct competition with these TES products. One of TES's largest
competitors has licensed the patented electronic gearing technology from TES as
opposed to trying to develop its own technology. Generally, the market in this
industry is targeted through advertising in trade journals and attendance at
trade shows such as the Bobbin Show. The

                                       8
<PAGE>

principal methods of competition, in addition to technology, are price,
workmanship, overall machine performance, and service offered.

Manufacturing
-------------

     TES generally manufactures all prototype products which it develops and
manufactures the already developed products it offers. However, TES's general
policy has been to out source manufacturing of components or manufacturing
processes (such as nickel and chrome plating for the ergonomic stands) which for
various reasons create environmental hazards. So far TES has found that it has
generally been less expensive to outsource when the environmental compliance
costs are factored in. In the event that TES were no longer able to outsource
the component or process, it would most likely change the component or finishing
process. TES has no current plans or perceived need to make any material capital
expenditures for environmental control.

     TES's facility has the machining capabilities of sawing, milling, welding,
brazing, sanding, surface grinding, drilling, tapping, threading, turning
(lathe), riveting, bending, heat treating, and painting. TES maintains an
assembly department which consists of eight assembly stations, each with an
assortment of hand tools, electronic and air-driven power tools, vises, air
supply, and electronic requirements. In addition, the assembly department has
two stations designated for the assembly of electronic circuit boards and
components. During manufacture and assembly and prior to shipment, each product
manufactured by TES goes through a series of quality checks.

     TES maintains an in-house inventory of all parts it manufactures and
approximately 80% of the components supplied by outside vendors. Approximately
25% of components of TES products are vendor supplied. TES generally uses
components supplied by a number of different sources and is therefore not
predominantly dependent on one supplier of any component of any of its products.
In addition, with the exception of a few items such as P.L.C.s (programmable
logic controller, i.e. mini computer), PC computers, electric motors and
electric switches (which are available from numerous suppliers), TES has the
capability of manufacturing the components used in its products. Raw materials,
such as aluminum, steel and brass, are also available from many suppliers.

Employees
---------

     As of March 31, 1999, the Company had sixteen full time employees. This
number includes ten hourly and six salaried employees. The Company employs
machinists, welding specialists, electronic specialists, assembly personnel,
shipping and inventory personnel, clerical workers, electronic and mechanical
engineers, and sales and service personnel. Approximately 83% of the Company's
management have been employees of TES for at least ten years.

     The Company considers its relationship with its employees to be good, and
none of its employees currently are represented by a union in collective
bargaining with the Company.

     Due to the growing demand for the electronic gearing technology, the
Company expects to increase its workforce by approximately 80% during the
current fiscal year. The additional personnel will consist of engineers needed
for the increased demand on the research and

                                       9
<PAGE>

development department as well as assembly and production workers needed for the
increased production output upon completion of the felling machine.

Item 2. Properties

     Tice Technology's corporate headquarters are located in Knoxville,
Tennessee and are housed in the manufacturing facility leased through its
subsidiary, TES. The facility consists of approximately 20,000 square feet. Of
that space, the manufacturing area consists of 18,000 square feet, 2,000 of
which constitute research and development operations. The remaining 2,000 square
feet houses the administrative offices. The facility is located in a small
retail center which was owned by TES prior to October 1996. As a condition of
the sale of the center, TES remained in the center rent free through May 1997.
Upon the expiration of the rent free period, TES continues to rent the
manufacturing facility on a month to month basis at $6,773 per month.

     To provide for continued growth, the Company plans to either build a new
facility or lease/purchase a facility that will provide sufficient space for the
Company's needs. The Company owns approximately six acres of undeveloped land
where a new facility could be constructed. Management has decided that it would
be economically feasible to start a second shift and to subcontract some of its
manufacturing processes at such time that the demand exceeds the capacity of the
operations capable in one eight-hour shift at the present facility, thus
allowing the possible use of the existing site. This decision will be made in
the next twelve to eighteen months.

Item 3. Legal Proceedings

     There are no material pending legal proceedings to which Tice Technology,
Inc. or its subsidiaries or to which any of its properties are subject.

Item 4. Submission of Matters to Vote of Security Holders .

     No matters were submitted to a vote of security holders of Tice Technology,
Inc. during the fourth quarter of the Company's fiscal year ended March 31,
1999.

                                    PART II

Item 5. Market For Registrant's Common Equity And Related Stockholder Matters.

     Trading of Tice Technology, Inc.'s Common Shares and Warrants is reported
on the Electronic Bulletin Board under the symbols TICE and TICEW, respectively.
Reporting commenced on August 28, 1997.

     The following table reflects the high and low bid prices for the Company's
Common Shares and Warrants for each quarter of its fiscal year ended March 31,
1999:

                                       10
<PAGE>

<TABLE>
<CAPTION>
                                                      Common Stock
                           Common Shares            Purchase Warrants
                           -------------            -----------------
                            High     Low          High         Low
<S>                        <C>     <C>          <C>          <C>

4/th/ Quarter, 1999        $ 1.6875 $ 0.75       $ 0.0**      $ 0.0**
3/rd/ Quarter, 1999        $ 1.75   $ 0.125      $ 0.25       $ 0.0625
2/nd/ Quarter, 1999        $ 3.00   $ 0.75       $ 0.625      $ 0.0625
1/st/ Quarter, 1999        $ 5.00   $ 2.00       $ 1.00       $ 0.25

4/th/ Quarter, 1998        $ 8.00   $ 2.00       $ 0.875      $ 0.3125
3/rd/ Quarter, 1998        $14.00   $ 3.625      $ 1.00       $ 0.05
2/nd/ Quarter, 1998        $ 4.25   $ 2.50       $ 0.0**      $ 0.0**
1/st/ Quarter, 1998          N/A*     N/A*          N/A         N/A
</TABLE>

*  No trading during April 1998 - June 1998.
** No trades recorded.

     The approximate number of holders of Common Shares of TTI as of June 15,
1999 were 1,063 (based upon the number of record holders), excluding
stockholders whose Common Shares are held in nominee or street name by brokers.
The approximate number of holders of Warrants as of that same date were
approximately 1,031 (based upon the number of record holders), excluding holders
whose Warrants are held in nominee or street name by brokers.

     TTI had never paid cash dividends on its Common Shares, Class B Common
Shares, or Class D Common Shares. Any future payment of cash dividends by TTI
would require TES to pay cash dividends to TTI, and TES has not paid cash
dividends to TTI in the past. TTI does not anticipate paying cash dividends on
the Common Shares, Class B Common Shares or Class D Common Shares in the
foreseeable future because it intends to cause TES to retain its earnings to
finance the expansion of TES's business and for general corporate purposes. The
declaration and payment of any dividends on the Common Shares will be at the
discretion of TTI's Board of Directors and will depend on, among other things,
the Company's earnings, financial condition, capital requirements, level of
indebtedness, contractual restrictions with respect to the payment of dividends
and other factors considered relevant by the Board of Directors.

Item 6. Selected Financial Data.

     The following table summarizes certain selected consolidated financial data
of the Company and is qualified in its entirety by the more detailed
consolidated financial statements and notes thereto appearing elsewhere herein.
The data have been derived from the audited consolidated financial statements of
the Company.
                                       11
<PAGE>

--------------------------------------------------------------------------------
 Statement of Earnings Data:
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                               Years Ended March 31,
                                                           (Amounts in thousands except
                                                                per share amounts)
                                          -----------------------------------------------------------------------
                                                 1999          1998          1997         1996          1995
                                                 ----          ----          ----         ----          ----
<S>                                       <C>                  <C>           <C>          <C>           <C>
Revenues                                          $  731       $ 1,344        $1,397        $1,242       $1,240

Operating expenses:
 Cost of revenues                                    474           751           815           699          712
 Research and development (net)                      172           208           163            47           43
 Selling, general, and administrative                560           882           563           482          420
                                                  ------       -------        ------        ------       ------
     Total operating expenses                      1,206         1,841         1,541         1,228        1,175

Operating income (loss)                             (475)         (497)         (144)           14           65

Total other income (expense)                         (90)       (1,370)          298             5         (100)
                                                  ------       -------        ------        ------       ------

Income (loss) before taxes                          (565)       (1,867)          154            19          (35)

Income tax expense (benefit)                          14            47           113             4           (5)
                                                  ------       -------        ------        ------       ------

Net income (loss)                                 $ (579)      $(1,914)       $   41        $   15       $  (30)
                                                  ======       =======        ======        ======       ======


Net income (loss) per common share

 Basic and diluted                                $(0.09)      $ (0.30)       $ 0.01
</TABLE>


--------------------------------------------------------------------------------
 Balance Sheet Data:
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                               March 31,
                                                       (Amounts in thousands)
                             -----------------------------------------------------------------------------------------
                                   1999           1998          1997          1996          1995
                                   ----           ----          ----          ----          ----
<S>                         <C>                <C>           <C>           <C>           <C>
Total assets                     $ 846         $1,102        $1,001        $1,431        $1,578

Total long-term liabilities      $ 630         $  556        $  ---        $  661        $  302

Total stockholders' equity       $(539)        $  (61)       $  176        $  142        $  121
</TABLE>
--------------------------------------------------------------------------------

                                       12
<PAGE>

Item 7. Management's Discussion and Analysis of Financial Condition and Results
        of Operations

Results of Operations
---------------------

Year Ended March 31, 1999 Compared with Year Ended March 31, 1998
-----------------------------------------------------------------

     Total operating revenues decreased in 1999 by 46% to $730,937 from
$1,344,231 in 1998. Product revenues decreased 34% to $586,186 in 1999 from
$892,713 in 1998 as capital constraints limited new product introductions
featuring the Company's electronic gearing technology and sales of traditional
products decreased significantly due to increased competition and limited
resources available to the Company to effectively market the products worldwide.
In 1999, sales of TES's Automatic J-Tackers, Belt Loop Machines and Label
Loaders/Folders generated sales of $103,698 (17.7%), $126,438 (21.6%) and
$117,079 (20.0%), respectively, whereas sales in 1998 of each product produced
sales of $86,504 (9.8%), $197,804 (22.4%) and $198,089 (22.5%), respectively.
While sales of the traditional products are expected to continue through the
efforts of the Company to continually upgrade and customize these products to
meet customer needs, most of the anticipated source of future revenues for the
Company is expected to be generated from new products either virtually developed
or currently in development. Also, in addition to product revenue, royalty
income decreased 28% in 1999 to $144,751 from $ 201,518 in 1998 primarily due to
the slowdown in the Asian markets for TES's licensee. And finally, license fees
decreased 100% to none in 1999 from $250,000 in 1998 as TES's licensee did not
introduce any new products or meet any set sales milestones utilizing the TES's
electronic gearing technology which would require payment of the established
license fees.

     Total operating losses decreased approximately 4%, primarily due to
decreased operating expenses more than offsetting the decreased operating
revenues.

     Cost of revenues, as a percentage of total revenues, increased 9.0% to
64.8% from 55.8%, primarily due to the lower royalty income and lack of license
fee income, neither of which have associated costs. Costs associated with
product sales decreased 4% in 1999 from approximately 84% in 1998 to 80% in
1999. This decrease was primarily the result of lower labor and overhead costs
due to cost-controlling efforts by management.

     Research and development ("R&D") costs decreased 17% to $172,590 in 1999
from $208,407 in 1998 the result of lower salary costs ($124,514 in 1999
compared to $169,755 in 1998). Minimal new product development activities
occurred during 1999.

     Selling, general, and administrative ("SG&A") expenses decreased 37% to
$560,009 in 1999 from $882,161 in 1998. This was primarily as a result of
lowered compensation and benefit costs from both reductions in headcount and
curtailed benefit programs ($290,764 in 1999 compared to $460,882 in 1998),
reduced advertising and selling costs as the Company was awaiting the launch of
new products ($43,908 in 1999 compared to $81,824 in 1998), lower legal and
accounting costs due to a reduced need for such services ($47,975 in 1999
compared to $84,151 in 1998), lower recruiting costs due to curtailed hiring of
new personnel ($11,170 in 1999 compared to $42,000 in

                                      13

<PAGE>

1998) and lower stock promotion costs ($3,550 in 1999 compared to $55,788 in
1998). These reductions were offset somewhat by an increase in allowance for bad
debts related to an international distributor of the Company's products ($28,374
in 1999 compared to none in 1998).

     Other expenses for the 1999 fiscal year totaled $90,038, comprised mainly
of interest expense of $96,747. Interest expense was incurred on notes issued to
finance working capital and operating losses as well as property and equipment
owned by the Company. In 1998, interest expense totaled $94,358. Also in 1998,
other expenses totaled $1,370,013, of which $1,091,280 non-cash expenses and
$187,593 other expenses were due to the recording of non-recurring registration
expenses upon the August 1, 1997 effective date of the registration statement.
There were no comparable registration expenses in 1999.

     The Company recorded a lower income tax expense of $14,174 in 1999 compared
to $47,020 in 1998, mainly as a result of lower royalty and licensing fees and
foreign tax credits withheld from such payments but not utilized by the Company
due to net operating losses.

Year Ended March 31, 1998 Compared with Year Ended March 31, 1997
-----------------------------------------------------------------

     Product revenues decreased approximately 22% from $1,147,281 in fiscal 1997
to $892,713 in fiscal 1998 largely due to decreased sales of Automatic J-Tackers
and Label Loader/Folders. In 1998, sales of the Automatic J-Tackers and Label
Loader/Folders constituted approximately $86,500 (9.8%) and $198,100 (22.5%),
respectively, of product sales revenue; whereas, in 1997, sales of the Automatic
J-Tackers and Label Loader/Folders generated $180,000 (16%) and $394,000 (34%),
respectively, of product sales revenue. These products, part of the Company's
traditional product line, are continually upgraded to meet changing customer
requirements and are expected to show sales increases in the current fiscal year
based on the completion of upgrades in the first and second quarter and new
product developments for the Label Loader/Folders. The decrease in sales of
these two machines was offset somewhat by an increase in sales of the single
needle belt loop machine. Sales of the single needle belt loop machine increased
during the 1998 year, representing approximately $197,800 (22.4%) of product
revenue as compared to 1997 sales of the same machine which represented
approximately $106,200 (9.2%) of product revenue in that year. The decrease in
product revenue was also offset somewhat by $201,518 in royalty income recorded
in the 1998 year as royalties were reported from a non-exclusive license
agreement signed in the fourth quarter of the 1997 fiscal year. Income from
license fees remained consistent at $250,000 in each of the two years. Total
operating revenues for the 1998 year amounted to $1,344,231 which is a 3.8%
decrease from $1,397,281 total revenues in the prior year.

     Total operating losses increased by approximately 246% from $143,733 in the
1997 fiscal year to $497,430 in the 1998 fiscal year largely due to increases in
SG&A expenses.

     Cost of revenues as a percentage of total revenues decreased 2.4% to 55.8%
of total revenues for fiscal 1998 as compared to 58.3% of total revenues for
fiscal 1997. This decrease was largely the result of recording royalty revenue
in the 1998 fiscal year which had no associated cost. Also, in the fourth
quarter of the 1997 fiscal year, the Company recorded a provision of $120,000
for excess

                                      14
<PAGE>

and obsolete inventory. The royalty revenue helped to offset increases in direct
labor and related benefits as well as increased overhead applied relating to
increases in rent expenses incurred during the 1998 year.

     R&D costs increased by 27.7% to $208,407 in the 1998 fiscal year from
$163,204 in the 1997 fiscal year due to increased salaries and benefits relating
to engineering as well as officers' salaries and increased R&D inventory.

     SG&A expenses increased 56.6% to $882,161 in fiscal 1998 from $563,223 in
fiscal 1997.  Compensation expenses relating to employee stock options granted
August 1, 1997 totaling $109,375 as well as $79,174 in expenses relating to
stock promotions and stockholder relations were recorded during fiscal 1998
whereas the prior year had no such expenses.  Legal and accounting fees also
increased approximately 50.7% to $84,151 in fiscal 1998 from $55,807 in fiscal
1997 as a result of additional expenses incurred with quarterly reporting
requirements.  Salary and related expenses increased in the 1998 period as a
result of increases in salaries and related benefits in the fourth quarter of
fiscal 1997 and expenses related to recruiting additional personnel during the
first nine months of the 1998 fiscal year.

     Other expenses for the 1998 fiscal year totaled $1,370,013, of which
$1,091,280 non-cash expenses and $187,593 other expenses were due to the
recording of non-recurring registration expenses upon the August 1, 1997
effective date of the registration statement; whereas the 1997 fiscal year
reflected only $107,687 in non-recurring expenses relating to the registration
process.  The 1997 fiscal year reflected a $500,363 gain on the sale of rental
property during that period whereas the 1998 period had no comparable gain.

     The Company recorded a lower income tax expense of $47,020 in 1998 compared
to $112,746, mainly the result of taxable income in 1997 (primarily the gain on
sale of the shopping center) compared to a net loss in 1998.

Inflation
---------

     Inflation has not had a significant impact on the Company's operations to
date.

Liquidity and Capital Resources
-------------------------------

     Since its inception, the Company has financed its operations through a
combination of cash flow from operations, bank borrowings, and borrowings from
individuals.  The Company's capital requirements have arisen primarily in
connection with purchases of fixed and intangible assets, and the Company has
historically made significant expenditures each year for research and
development and marketing new technology, though these activities were somewhat
curtailed in 1999.

     Net cash used by operating activities was $277,111 in 1999, $541,206 in
1998 and $110,993 in 1997. The primary cause of the net use of cash from
operations in 1999 was the operating loss of $579,552 offset by increases and
decreases in working capital items. In 1998 the primary cause of the net use of
cash was the net loss of $1,914,463 offset by non-cash expenses related to the
stock registration of $1,047,000, non-cash compensation expenses related to the
issuance of employee stock options of $109,375 and increases and decreases in
working capital items. In 1997, the primary cause of the net use of cash was net
income of $41,479, deferred income taxes

                                      15

<PAGE>

of $112,476, recording a provision for inventory obsolescence of $120,000, and
increases and decreases in working capital items offset by the gain on sale of
property and equipment of $500,363.

     Net cash provided (used) by investing activities was ($9,488) in 1999,
($42,579) in 1998 and $695,475 in 1997.  Primary uses of funds in 1999 were
related to capital expenditures and patents. Primary uses of funds in 1998 and
1997 were related to capital expenditures, patents, and notes receivable. The
primary source of funds in 1997 was generated through the sale of company assets
including a shopping center. Capital expenditures totaled approximately $3,600
in 1999 compared to approximately $7,000 in 1998 and $11,000 in 1997.  Capital
expenditures are expected to increase over the next year during which time the
Company expects to move from its existing facility (see "Future Operations").

     Net cash provided (used) by financing activities was $291,691 in 1999,
$533,455 in 1998 and ($517,911) in 1997. The cash provided by financing
activities in 1999 was primarily related to proceeds from notes payable issued
to related parties and others as well as proceeds from the issuance of stock and
stock warrants. In 1998 the cash provided by financing activities was primarily
related to proceeds from the exercise of employee stock options and warrants and
from notes payable issued to related parties and others. In 1997 the cash used
from financing activities primarily included proceeds from notes payable issued
to related parties and others. In all years such amounts were used primarily to
make debt repayments including notes related to the shopping center that was
sold in 1997.

     The Company's principal commitments at March 31, 1999 consisted primarily
of notes payable to related parties as well as other notes payable. The Company
used the proceeds of these notes to provide working capital for operations and
for the continuing development of the electronic gearing technology as well as
to fund the costs of license and royalty agreement negotiations and registration
of securities of the Company. Several of these notes were extended to retain
working capital. On August 1, 1997, the effective date of the registration
statement, $145,770 of notes payable to related parties and $119,910 of notes
were converted to 88,560 Common Shares of the Company at $3.00 per share.
Remaining notes payable, with interest rates ranging from 10% to prime plus 1%
are due in fiscal 1999 and 2000. The Company plans to extend the remaining
related party notes payable if working capital is not sufficient to repay the
loans.

     Subsequent to March 31, 1999, the Company entered into a binding letter of
intent with investors to provide the Company $280,000 of additional capital
through the purchase of 700,000 restricted Common Shares and provided for a
"best efforts" underwriting for the Company to secure an additional $2,050,000
of funds to be used mainly for working capital, capital expenditures, additional
patent work, retirement of certain notes payables to a shareholder, payment of
existing accounts payable, and for costs associated with the offering. Upon the
successful completion of the offering on June 25, 1999, the Company issued
1,500,000 restricted Common Shares for $0.70 per share and $1,000,000 in
promissory notes. The notes include warrants to purchase 100,000 restricted
Common Shares of the Company at $0.50 per share for 48 months. The notes bear
interest at 10% per annum. The interest accrued during the first year is payable
at the end of the year. Thereafter, accrued interest is payable quarterly. The
notes may be prepaid without penalty and are secured by the patents on the
electronic gearing technology.

                                      16
<PAGE>

     In connection with the offering, the placement agent received a commission
of 10% on the proceeds of the sale of the notes and the shares. In addition, the
finder received a fee of 3% of the funds raised (including the initial $280,000)
and options to purchase 50,000 restricted Common Shares at $1.00 per share for
five years.

     In addition, as part of this agreement, two related party note holders
agreed to convert their existing notes payable and related interest totaling
$296,181 to Common Shares of the Company. In addition, except for a $125,000
payment from the proceeds of the offering, the Company's majority stockholder
agreed to subordinate all amounts due him to the $1,000,000 in promissory notes.
Management believes that the funds from the offering will allow the Company to
complete and launch new products utilizing the electronic gearing technology as
well as hire additional personnel to sell and support both the existing products
and future products. Finally, the Company is in negotiation with two regional
banks to provide the Company up to a $1,000,000 revolving line of credit for
additional working capital resources to be secured by the Company's accounts
receivable, inventory, and fixed assets.

Effect of Recently Issued Accounting Standards
----------------------------------------------

     In June, 1998, the FASB issued SFAS 133, Accounting for Derivative
Instruments and Hedging Activities, which is effective for the fiscal quarters
of fiscal years beginning after June 15, 1999. It is not anticipated that this
statement will have a material impact on the Company.

Year 2000 Issues
----------------

     Many currently installed computer systems and software products are coded
to accept only two-digit entries to represent years.  For example, the year
"1997" would be represented by "97".  These systems and products will need to be
able to accept four-digit entries to distinguish years beginning with 2000 from
prior years.  As a result, systems and products that do not accept four-digit
year entries will need to be upgraded or replaced to comply with such "Year
2000" requirements.

     The Company's products are not date sensitive. With respect to its internal
systems, the Company has reviewed such systems to assess the impact of the Year
2000. Based upon that review and information provided from vendors, the Company
believes that the only one of its internal systems that will be affected is its
IBM AS400 main frame computer which controls the Company's administrative,
accounting, financial, and inventory software. As part of the Company's
participation in IBM's ongoing maintenance program, IBM has indicated that it
has made the necessary modifications available in an upgrade for the operating
system and software packages that the Company uses. The Company purchased the
upgrade package during the 1998 fiscal year at a cost of $1,400. Upon attempting
to install the upgrade in December 1998, it was discovered that memory size
needed to be increased. The Company purchased additional memory in January 1999
for $677. The Company has completed approximately 50% of the installation and
does not anticipate any material disruptions in its operation as the result of
installing the upgrades. The Company believes that the overall cost of
compliance should not exceed $7,000 and expenses such compliance costs when
incurred.

                                      17
<PAGE>

     It is uncertain whether the Company's customers and suppliers will have
Year 2000 issues that may affect the Company, but the Company currently is
developing a plan to evaluate the Year 2000 compliance status of its customers
and suppliers. There can be no guarantee that those customers and suppliers with
systems that are not now Year 2000 compliant will be timely converted to
compliance. Additionally, there can be no guarantee that those customers and
suppliers of business importance to the Company will successfully and timely
reprogram or replace, and test, all of their own computer hardware, software,
and process control systems.

     Although the Company expects its critical systems to be compliant by
September 30, 1999, there is no guarantee that these results will be achieved.
Specific factors that give rise to this uncertainty include a possible loss of
technical resources to perform the work, failure to identify all susceptible
systems, non-compliance by third parties whose systems and operations impact the
Company, and other similar uncertainties. A reasonably possible worst case
scenario might include the Company's inability to accurately maintain accounting
records. Such an event could result in a material disruption to the Company's
operations. Specifically, the Company could experience an interruption in its
ability to collect and process payments of receivables, invoice shipments,
and/or process payables. Should the worst case scenario occur it could,
depending on its duration, have a material impact on the Company's results of
operations and financial positions, although the Company does have manual
procedures in place that would help keep disruption to a minimum.

Future Operations
-----------------

     Management believes that although its traditional products will continue to
generate sales revenue and that TES will continue to solve other problems for
customers as they arise in their manufacturing processes, the majority of future
revenues are dependent on anticipated new product introductions. Management
reduced overhead in all areas in order to lower operating expenses until the
Company completed its financing for additional working capital and production
begins on the FS2000 Felling Machines. At that time, management expects that
overhead will increase as necessary to meet production demands of the Felling
Machine.

     Recent new product developments such as the label loader/folder for woven
labels and upgrades to existing equipment, using traditional technology, are
expected to keep the traditional product line competitive as the Company
continually works on developing products that its competitors have not attempted
or have failed to develop. Management believes that these products and upgrades
can be completed with the existing R&D staff. In addition, there is a great
demand for products incorporating the electronic gearing technology. The Company
is in various stages of design and development on machines using the electronic
gearing technology including a three-dimensional stitching machine for
automotive air bags, a multi-head buttonhole machine, a multi-head button sewing
machine, a single needle plain sewer, and a keyhole buttonhole machine. Research
and development of these items has been halted but is expected to resume as soon
as additional working capital is obtained and additional engineering personnel
are added.

     The Company anticipates that income from license fees and royalty revenues
will increase over the next several years as its existing licensee introduces
new electronically geared equipment to the market, as additional manufacturers
license the technology, and as royalty revenues increase

                                      18
<PAGE>

based on increased sales of products by the current licensee and royalties are
generated by potential additional licensees.

     To provide for continued growth, the Company plans to either build a new
facility or lease (with an option to purchase) a facility that will provide
sufficient space for the Company's needs.  The Company owns approximately six
acres of undeveloped land where a new facility could be constructed, or suitable
other land is available should the Company choose to build.  Management has
decided that it would be economically feasible to start a second shift and to
subcontract some of its manufacturing processes at such time that the demand
exceeds the capacity of the operations capable in one eight-hour shift in the
present site, thus allowing the possible use of the existing site until a
decision is reached with regards to future facility needs.

     Although the Company has no present acquisition agreement or arrangements,
management may make strategic acquisitions in the future which may or may not be
in related industries, using stock, cash, debt, or a combination thereof.
Depending on the terms of the acquisition, the Company may need to incur
additional indebtedness or issue equity securities to make any such acquisition.
Management has not identified any particular targets for acquisition.

     The Company believes that future results of operations will be influenced
by a number of factors including general economic conditions, dependence on key
customers, and market acceptance of new technology.  Because of these factors,
as well as other factors, historical results should not be relied on as an
indicator of future performance.

Special Considerations
----------------------

     This section captioned "Special Considerations" and other parts of this
Annual Report on Form 10-K include certain forward-looking statements within the
meaning of the federal securities laws.  Actual results and the occurrence or
timing of certain events could differ materially from those described in any of
such forward-looking statements due to a number of factors, including those set
forth below and elsewhere in this Form 10-K.  See "Other Factors Relating to
Forward-Looking Statements" below.

     Diversification and Long Term Growth.  The Company plans to diversify its
     ------------------------------------
business and to seek opportunities for long term growth by developing additional
products for sale to manufacturers in industries other than the apparel industry
as well as additional licensing of the electronic gearing technology.  There is
no assurance that the Company will be successful in these efforts.

     Product Development.  As described above, the Company is in the process of
     -------------------
developing new products, including the label loader/feeder for woven labels, the
felling machine, and the sewing machine capable of three dimensional stitching
of automotive air bags.  The Company plans to investigate other new product
development opportunities as part of its effort to expand its product offerings
and market.  There are no assurances that the Company will be able to locate
such opportunities or successfully exploit them once located.

                                      19
<PAGE>

Other Factors Relating to Forward-Looking Statements
----------------------------------------------------

     Statements contained in this Form 10-K that are not historical facts are
forward-looking statements made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995.  In addition, words such as
"believes", "anticipates", "expects", and similar expressions are intended to
identify forward-looking statements.  Such forward-looking statements involve
known and unknown risks, uncertainties, and other factors which may cause the
actual results, performance, or achievements of the Company or events, or timing
of events, relating to the Company to differ materially from any future results,
performance, or achievements of the Company or events, or timing of events,
relating to the Company expressed or implied by such forward-looking statements.
The Company cannot assure that it will be able to anticipate or respond timely
to the changes which could adversely affect its operating results in one or more
fiscal quarters.  Results of operations in any past period should not be
considered indicative of results to be expected in future periods.  Fluctuations
in operating results may result in fluctuations in the price of the Company's
securities.

     In the event the Company needed additional financing, there can be no
assurance that any such financing will be available on acceptable terms.  If
such financing is not available on satisfactory terms, the Company may be unable
to expand its business or develop new customers as desired and its operating
results may be adversely affected.  Debt financing will increase expenses and
must be repaid regardless of operating results.  Equity financing could result
in dilution to existing stockholders.

     Some of the more prominent known risks and uncertainties of the Company's
business are set forth below.  However, this section does not discuss all
possible risks and uncertainties to which the Company and its business is
subject, nor can it be assumed that there are not other risks and uncertainties
which may be more significant to the Company.

     Such other factors include, among others, those described in the "Business"
section and elsewhere in "Management's Discussion and Analysis" and the
following:

 .    the lack of working capital needed to further develop and apply the
     electronic gearing technology and other products and management's ability
     to find acceptable financing to supply such working capital;

 .    the potential failure by the Company to successfully negotiate additional
     licensing agreements;

 .    continued dependence on a small number of significant customers for
     substantially all of the Company's revenue and the potential loss of one or
     more of the Company's principal customers;

 .    the shortage of qualified and competent engineers and the risk that the
     Company will be unable to retain its key employees and managers, especially
     in the event the Company loses one or more of its principal customers;

                                      20
<PAGE>

 .    dependence on the apparel industry and the potential failure to diversify
     the Company's product and service offerings and to expand its markets into
     other industries;

 .    the unanticipated expense of new product development, the potential failure
     by the Company to complete new products under development and others
     started in the future successfully or on a timely, cost effective basis,
     and the failure of any such products to achieve substantial market
     acceptance;

 .    the dependence on patents and ability to protect proprietary products, the
     potential that existing patents held by TES or future patents obtained by
     TES will not be enforceable, the risk that TES products will infringe on
     patents held by others, or the risk that competitors will develop similar
     or functionally similar products; and

 .    the potential adverse effect of competition, the potential failure by the
     Company to provide competitive timely designs of cost-effective solutions
     and products to manufacturers, and the potential adverse effect of
     technological change with which the Company is unable to keep pace.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

     Not applicable.

Item 8.  Financial Statements and Supplementary Data.

                                      21
<PAGE>

REPORT OF INDEPENDENT ACCOUNTANTS


To the Board of Directors
Tice Technology, Inc. & Subsidiary


In our opinion, the accompanying consolidated balance sheets and the related
consolidated statements of operations, stockholders' equity, and of cash flows
present fairly, in all material respects, the financial position of Tice
Technology, Inc. & Subsidiary (the "Company") at March 31, 1999 and 1998, and
the results of their operations and their cash flows for the years then ended,
in conformity with generally accepted accounting principles. These financial
statements are the responsibility of the Company's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these statements in accordance with
generally accepted auditing standards which require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for the opinion expressed
above.


/s/ PricewaterhouseCoopers LLP


Knoxville, Tennessee
June 16, 1999, except as to Note 14
for which the date is June 25, 1999

                                      22

<PAGE>

TICE TECHNOLOGY, INC. & SUBSIDIARY
Consolidated Balance Sheets
As of March 31, 1999 and 1998

<TABLE>
<CAPTION>
                                         1999        1998
<S>                                   <C>         <C>
Assets

Cash and cash equivalents             $  24,155   $   19,063
Accounts receivable, net                 65,245      192,615
Note receivable                              --       11,993
Prepaid expenses                          8,097        9,013
Inventory, net                          387,654      394,116
                                      ---------   ----------

   Total current assets                 485,151      626,800

Property and equipment:
 Land                                   130,000      130,000
 Equipment                              536,254      528,740
 Vehicles                               107,751      124,599

   Total property and equipment         774,005      783,339

   Less accumulated depreciation       (596,364)    (603,700)
                                      ---------   ----------

   Property and equipment, net          177,641      179,639

Patents, net                            178,803      174,462
Note receivable from related party           --       79,610
Other assets                              4,350       41,818
                                      ---------   ----------

   Total assets                       $ 845,945   $1,102,329
                                      =========   ==========
</TABLE>

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


                                       23
<PAGE>

<TABLE>
<CAPTION>
                                                                             1999           1998
<S>                                                                       <C>           <C>
Liabilities and Stockholders' Equity (Deficit)

Notes payable and current maturities of long-term debt                    $  214,790    $  255,039
Accounts payable                                                             233,030       304,448
Accrued liabilities                                                          109,798        38,815
Notes payable to related parties, current portion                            197,698         8,741
                                                                          ----------   -----------

     Total current liabilities                                               755,316       607,043

Notes payable to related parties, long-term portion                          620,482       556,310
Note payable, long-term portion                                                9,424            --
                                                                          ----------   -----------

     Total liabilities                                                     1,385,222     1,163,353

Stockholders' equity (deficit):

  Capital stock, no par value; 2,000 shares authorized; 750 shares
   issued and outstanding at March 31, 1999 and 1998                          13,493        13,493
  Common shares, par value $.01; 30,000,000 shares authorized;
   5,994,064 and 5,907,639 shares issued and outstanding
   at March 31, 1999 and 1998, respectively                                   59,941        59,076
  Class B common shares, convertible, par value $.01;
   5,000,000 shares authorized; 750,000 shares issued and
   outstanding at March 31, 1999 and 1998                                      7,500         7,500
  Class D common shares, convertible, par value $.01;
   600,000 shares authorized, none issued or outstanding
   at March 31, 1999 and 1998                                                     --            --
  Preferred shares, par value $.01; 10,000,000 shares authorized;
   none issued or outstanding at March 31,1999 and 1998                           --            --
  Additional paid in capital                                               1,704,161     1,603,727


  Accumulated deficit                                                     (2,324,372)   (1,744,820)
                                                                          ----------   -----------

     Total stockholders' equity (deficit)                                   (539,277)      (61,024)
                                                                          ----------   -----------

     Total liabilities and stockholders' equity (deficit)                 $  845,945   $ 1,102,329
                                                                          ==========   ===========
</TABLE>

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

                                       24
<PAGE>

TICE TECHNOLOGY, INC. & SUBSIDIARY
Consolidated Statements of Operations
For the years ended March 31, 1999, 1998 and 1997

<TABLE>
<CAPTION>
                                                      1999          1998          1997
<S>                                               <C>          <C>           <C>
Operating revenues:
  Sales and service                               $  586,186   $   892,713   $  1,147,281
  License fees                                            --       250,000        250,000
  Royalties                                          144,751       201,518             --
                                                  ----------   -----------   ------------

  Total operating revenues                           730,937     1,344,231      1,397,281

Operating expenses:
  Cost of revenues                                   473,678       751,093        814,587
  Research and development                           172,590       208,407        163,204
  Selling, general and administrative                560,009       882,161        563,223
                                                  ----------   -----------   ------------

      Total operating expenses                     1,206,277     1,841,661      1,541,014
                                                  ----------   -----------   ------------

Operating loss                                      (475,340)     (497,430)      (143,733)

Other income (expense):
  Registration expenses                                   --    (1,278,873)      (107,687)
  Rental income                                           --            --         28,200
  Rental expense                                          --            --        (29,792)
  Gain on sale of fixed assets                         3,274            --        500,363
  Interest expense - related parties                 (65,690)      (49,772)       (16,830)
  Interest expense                                   (31,057)      (44,586)       (75,652)
  Other income (expense)                               3,435         3,218           (644)
                                                  ----------   -----------   ------------

  Total other income (expense)                       (90,038)   (1,370,013)       297,958
                                                  ----------   -----------   ------------

Income (loss) before income taxes                   (565,378)   (1,867,443)       154,225
Income tax expense                                    14,174        47,020        112,746
                                                  ----------   -----------   ------------

Net income (loss)                                 $ (579,552)  $(1,914,463)  $     41,479
                                                  ==========   ===========   ============


Income (loss) per share (Note 11):
  Basic and diluted                               $   $(0.09)  $    $(0.30)  $       0.01
                                                  ==========   ===========   ============
</TABLE>

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

                                       25
<PAGE>

TICE TECHNOLOGY, INC. & SUBSIDIARY
Consolidated Statements of Stockholders' Equity
For the years ended March 31, 1999, 1998 and 1997

<TABLE>
<CAPTION>
                                                                                                        Retained         Total
                                                                            Class B     Additional      Earnings     Stockholders'
                                                Capital       Common        Common        Paid In     (Accumulated      Equity
                                                 Stock        Shares        Shares        Capital       Deficit)       (Deficit)
<S>                                            <C>          <C>           <C>           <C>            <C>           <C>
Balances, March 31, 1996                       $    8,634   $         -   $         -   $     4,859    $   128,164   $     141,657
 Net income                                             -             -             -             -         41,479          41,479
                                               ----------   -----------   -----------   -----------    -----------   -------------

Balances, March 31, 1997                            8,634             -             -         4,859        169,643         183,136
 Exercise of 30 capital stock warrants              4,859             -             -        (4,859)             -               -
 Issuance of 5,750,220 common shares,
   1,000,000 warrants to purchase common
   shares and 750,000 Class B common
   shares in connection with the effectiveness
   of registration statement                            -        57,502         7,500     1,039,139              -       1,104,141
 Conversion of debt into 88,560 common shares           -           886             -       264,964              -         265,850
 Exercise of 400 common share warrants                  -             4             -         3,196              -           3,200
 Issuance of 43,750 options to purchase
   common shares at below fair market value             -             -             -       109,375              -         109,375
 Exercise of 28,459 employee common
   share options                                        -           284             -        28,175              -          28,459
 Conversion of accounts payable into
   40,000 common shares                                 -           400             -       158,878              -         159,278
 Net loss                                               -             -             -             -     (1,914,463)     (1,914,463)
                                               ----------   -----------   -----------   -----------    -----------   -------------

Balances, March 31, 1998                           13,493        59,076         7,500     1,603,727     (1,744,820)        (61,024)

 Retirement of 375 common shares
   without reissue                                      -            (3)            -             3              -               -
 Issuance of 77,500 common shares                       -           775             -        89,225              -          90,000
 Exercise of 5,300 employee common share
   options                                              -            53             -         5,247              -           5,300
 Conversion of accounts payable into
   4,000 common shares                                  -            40             -         5,959              -           5,999
 Net loss                                               -             -             -             -       (579,552)       (579,552)
                                               ----------   -----------   -----------   -----------    -----------   -------------
 Balances, March 31, 1999                      $   13,493   $    59,941   $     7,500   $ 1,704,161    $(2,324,372)  $    (539,277)
                                               ==========   ===========   ===========   ===========    ===========   =============
</TABLE>

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

                                       26
<PAGE>

TICE TECHNOLOGY, INC. & SUBSIDIARY
Consolidated Statement of Cash Flows
For the years ended March 31, 1999, 1998 and 1997

<TABLE>
<CAPTION>
                                                                              1999           1998          1997
<S>                                                                     <C>            <C>             <C>
Net cash flows from operating activities:
  Net income (loss)                                                     $   (579,552)  $  (1,914,463)  $    41,479
  Adjustments to reconcile net income (loss) to net
    cash provided (used) by operating activities:
       Depreciation and amortization                                          14,289          18,550        35,683
       Noncash registration expenses                                              --       1,047,000           ---
       Noncash compensation expense                                               --         109,375            --
       Noncash interest expense                                                   --          44,280            --
       Increase in cash surrender value of life insurance                     (2,572)        (17,178)       (9,500)
       Provision for inventory obsolescence                                       --              --       120,000
       Provision for doubtful accounts receivable                             28,374              --            --
       Gain on sale of property and equipment                                 (3,274)             --      (500,363)
       Deferred income taxes                                                  14,174          47,020       112,746
       Changes in operating assets and liabilities:
        Receivables                                                          110,989        (116,173)       46,626
        Prepaid expenses                                                         916          (7,625)       11,884
        Inventory                                                              6,462         (26,513)      (22,606)
        Accounts payable and accrued liabilities                             133,083         274,521        53,058
                                                                        ------------   -------------   -----------

          Net cash used by operating activities                             (277,111)       (541,206)     (110,993)
                                                                        ------------   -------------   -----------

Cash flows from investing activities:
  Purchases of property and equipment                                         (3,644)         (6,737)      (10,974)
  Proceeds from disposal of property and equipment                             3,793              --       825,000
  Additions to patents                                                        (9,637)        (20,240)      (72,323)
  Additions to note receivable from related party                                 --         (15,602)      (46,228)
                                                                        ------------   -------------   -----------

  Net cash provided (used) by investing activities                            (9,488)        (42,579)      695,475
                                                                        ------------   -------------   -----------

Cash flows from financing activities:
  Proceeds from loan on life insurance                                        40,040              --            --
  Proceeds from notes payable to related parties                             335,941         652,490       324,000
  Proceeds from notes payable and long-term debt                               5,207          50,000       940,201
  Principal payments on notes payable to related parties                    (174,058)       (184,741)     (252,733)
  Principal payments on notes payable and long-term debt                     (10,739)        (28,953)   (1,529,379)
  Proceeds from issuance of stock and stock warrants                          90,000          13,000            --
  Proceeds from exercise of stock options and warrants                         5,300          31,659            --
                                                                        ------------   -------------   -----------

  Net cash provided (used) by financing activities                           291,691         533,455      (517,911)
                                                                        ------------   -------------   -----------

  Net increase (decrease) in cash and cash equivalents                         5,092         (50,330)       66,571

Cash and cash equivalents, beginning of year                                  19,063          69,393         2,822
                                                                        ------------   -------------   -----------

Cash and cash equivalents, end of year                                  $     24,155   $      19,063   $    69,393
                                                                        ============   =============   ===========
</TABLE>

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

                                       27
<PAGE>

TICE TECHNOLOGY, INC. & SUBSIDIARY

Notes to Financial Statements


1.   Summary of Significant Accounting Policies and Other Disclosures

     General Information - Tice Technology, Inc. & Subsidiary ("Tice" or "the
     Company") provides engineering and technical solutions, generally through
     the development or enhancement of equipment for the apparel industry. Tice
     researches, designs, develops and tests specialized high technology,
     garment production line stitching machines and related equipment, which
     when patented, it manufactures for its own customers or licenses the
     technology to other manufacturers for their production.

     Consolidated Financial Statements - The accompanying consolidated financial
     statements include the accounts of Tice Technology, Inc. ("TTI") and its
     wholly-owned subsidiary, Tice Engineering and Sales, Inc. ("TES"). The
     consolidation of these entities will be collectively referred to as the
     Company or Tice. All significant intercompany balances and transactions
     have been eliminated.

     On August 1, 1997 TTI acquired all of the issued and outstanding stock of
     TES including 750 shares outstanding at March 31, 1997 and 30 shares issued
     in connection with the exercise of warrants subsequent to March 31, 1997,
     from the shareholders of TES in exchange for 5,450,220 Common Shares and
     750,000 Class B Common Shares. In addition, Monogenesis Corporation
     purchased 300,000 Common Shares and 1,000,000 warrants to purchase Common
     Shares at par value ($.01). In connection with the registration of the
     securities issued, the Company recognized $1,047,000 in registration
     expenses for the difference between the $3.50 initial share value and the
     price paid by Monogenesis for the stock. A portion of the shares and
     warrants were subsequently distributed by Monogenesis to its shareholders.

     Cash and Cash Equivalents - The Company considers all highly liquid debt
     instruments purchased with an original maturity of three months or less as
     cash equivalents.

     Trade Accounts Receivable and Concentrations of Credit Risk - The Company
     conducts a substantial portion of its business with three customers in the
     sewing industry (Note 6) with approximately $35,000 of total accounts
     receivable represented by these customers at March 31, 1999. One of the
     customers has a significantly delinquent account balance. Although
     management is working with the customer to resolve the matter and bring the
     account current, management recorded a $26,000 allowance for doubtful
     accounts during the fourth quarter of fiscal 1999.

                                       28
<PAGE>

Notes to Financial Statements, Continued

1.   Summary of Significant Accounting Policies and Other Disclosures, continued

     Inventories - Inventories are stated at lower of cost or market. Cost is
     determined using the first-in, first-out method.

     Property and Equipment - Property and equipment are stated at cost.
     Depreciation is computed using straight-line and accelerated methods over
     the estimated useful lives of the assets. The estimated useful lives of
     building and improvements is 15 - 31.5 years, equipment 5 - 7 years, and
     vehicles 5 years. Routine repair and maintenance costs are expensed as
     incurred. Costs of major additions, replacements and improvements are
     capitalized. Gains and losses from disposals are included in operating
     results.

     Patents - Certain legal and other direct expenses incurred in order to
     obtain patents on designed and manufactured parts have been capitalized at
     their cost to the Company. Amortization is calculated using the straight-
     line method over the estimated useful lives of the patents, primarily
     seventeen years. Amortization expense totaled $5,296, $5,210 and $4,548
     during the years ended March 31, 1999, 1998 and 1997, respectively.

     Note Receivable from Related Party - The Company previously paid premiums
     on a life insurance policy for an officer of the Company in a split dollar
     agreement with collateral assignment, whereby the premiums paid by the
     Company are to be repaid upon receipt of the policy proceeds by the
     officer's beneficiaries. The Company is not a beneficiary of the policy. In
     April, 1998, the Company chose to cancel the policy in order to reduce
     expenditures and the total premium paid to date, $79,610, was applied as a
     payment against noted payable to the officer. Premiums paid by the Company
     totaled $17,178 in fiscal 1998.

     Impairment of Long-Lived Assets - The Company follows the provisions of
     Financial Accounting Standards Board (FASB) Statement of Financial
     Accounting Standards (SFAS) No. 121, Accounting for the Impairment of Long-
     Lived Assets and for Long-Lived Assets to be Disposed of, which (i)
     requires that long-lived assets to be held and used be reviewed for
     impairment whenever events or circumstances indicate that the carrying
     value of an asset may not be recoverable, (ii) requires that long-lived
     assets to be disposed of be reported at the lower of the carrying amount or
     the fair value less costs to sell, and (iii) provides guidelines and
     procedures for measuring impairment losses that are different from
     previously existing guidelines and procedures in that recoverability is
     assessed based on estimates of undiscounted expected future cash flows of
     the asset being evaluated.

     Accounting for Stock Based Compensation - The Company follows the
     provisions of FASB SFAS No. 123, Accounting for Stock Based Compensation.
     In accordance with this Statement, the Company records all stock-based
     compensation awarded to vendors at the fair value of

                                       29
<PAGE>

Notes to Financial Statements, Continued

1.   Summary of Significant Accounting Policies and Other Disclosures, continued

     the services received. As permitted by SFAS 123, the Company has chosen to
     apply APB Opinion 25, Accounting for Stock Issued to Employees, and related
     interpretations in accounting for stock-based compensation awarded to
     employees.

     Effect of New Accounting Pronouncements - In June, 1998, the FASB issued
     SFAS 133, Accounting for Derivative Instruments and Hedging Activities,
     which may be effective for the fiscal quarters of fiscal years beginning
     after June 15, 1999. It is not anticipated that this statement will have a
     material impact on the Company.

     Research and Development Costs - Research and development ("R&D") costs,
     including work performed under contracts to perform R&D for others
     (development agreements), are expensed as incurred, net of reimbursements
     (Note 7).

     Income Taxes - The asset and liability method is used in accounting for
     income taxes, whereby deferred tax assets and liabilities are determined
     based upon the differences between financial reporting and tax bases of
     assets and liabilities and are measured based on enacted tax rates and laws
     when the differences are expected to reverse.

     Revenue Recognition and Deferred Revenue - The Company generally recognizes
     revenue at the time related products are shipped or at the time services
     are rendered. License fees and related royalties are recognized as earned
     based on sales of equipment by the manufacturer using the Company's
     technology.

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

                                       30
<PAGE>

Notes to Financial Statements, Continued

2.   Inventories

<TABLE>
<CAPTION>
        Inventories at March 31 consist of:
                                                      1999        1998
        <S>                                        <C>         <C>
             Raw materials                         $ 343,968   $ 363,472
             Work in process                         118,103      66,410
             Finished goods                           45,583      84,234
                                                   ---------   ---------

                                                     507,654     514,116
             Reserve for obsolescence               (120,000)   (120,000)
                                                   ---------   ---------

             Inventory, net                        $ 387,654   $ 394,116
                                                   =========   =========
</TABLE>

3.   Notes Payable to Related Parties

     Notes payable to related parties consist of the following at March 31:

<TABLE>
<CAPTION>
                                                                              1999             1998
     <S>                                                                     <C>              <C>
     Notes payable to an officer, dated May 31, 1998 to March 31,            $472,174         $556,310
      1999; interest at 10%; due May 31, 2000 to March 31, 2001;
      subordinate to all other debt.
                                                                              196,006            8,741
     Notes payable to employee and outside director (business
      associates), dated December 15, 1996 to December 31, 1998;
      due August 31, 2003; interest at 10%; principal and interest
      due semiannually; $191,425 personally guaranteed by an
      officer and majority stockholder.

     Note payable to officer, dated March 19, 1999; due June 19, 1999;        100,000               -0-
      interest at 10%; principal and interest due upon receipt of
      specific accounts receivable
</TABLE>

                                       31
<PAGE>

Notes to Financial Statements, Continued

<TABLE>
     <S>                                                                     <C>              <C>
     Note payable to immediate family member of officer, dated May
      27, 1998 and last renewed May 23, 1999; renewable every 90
      days; interest at 10% due monthly; principal due August 22,
      1999.                                                                    50,000               -0-
                                                                             --------         --------

                                                                              818,180          565,051
     Less current portion                                                     197,698            8,791
                                                                             --------         --------
                                                                             $620,482         $556,310
                                                                             ========         ========
8
</TABLE>

4.   Notes Payable and Long-Term Debt

     Notes payable and long-term debt consist of the following at March 31:

<TABLE>
<CAPTION>
                                                                             1999            1998
     <S>                                                                   <C>              <C>
     Note payable to a bank, due June 13, 1999, interest at 9.25%          $  7,240         $ 12,000
      payable with 90 day renewals, vehicle pledged as collateral,
      personally guaranteed by an officer and majority stockholder.

     Note payable to a bank, dated August 31, 1996, monthly                      -0-         188,344
      payments of $4,712 with final payment due April 2, 1998.

     Note payable to legal counsel for services rendered dated               21,778               -0-
      August 11, 1998; interest at 6%; interest and principal
      payable monthly; due August 11, 2000.

     Note payable to a bank dated May 15, 1998, renewed through             190,502               -0-
      December 17, 1999; interest at 9.5%; interest due upon
      renewal; undeveloped property pledged as collateral;
      personally guaranteed by an officer and majority stockholder.

     Notes payable to individuals (business associates) dated June            4,695            4,695
      18, 1996 to August 29, 1996, renewable every 90 days,
      interest at 10%, principal and interest due April 24,1999.

     Note payable to a bank, dated October 2, 1997, interest at                  -0-          50,000
      7.25%, principal and interest due October 2, 1998.                   --------         --------

</TABLE>

                                       32
<PAGE>

Notes to Financial Statements, Continued

<TABLE>
     <S>                                                                      <C>             <C>
                                                                               224,214         255,039

     Less current maturities                                                   214,790         255,039
                                                                              --------        --------

     Long-term debt, less current maturities                                  $  9,424        $     -0-
                                                                              ========        ========
</TABLE>

     On August 1, 1997, $119,910 of the notes payable to individuals were
     converted into 39,970 common shares.

5.   Income Taxes

     The provision for income taxes for the periods ended March 31, 1999, 1998
     and 1997, is comprised of:

<TABLE>
<CAPTION>
                                                 1999              1998             1997
     <S>                                        <C>               <C>             <C>
     Current income tax expense:
      Federal                                   $     -           $     -         $      -
      State                                           -                 -                -

     Deferred income tax expense:
      Federal                                    14,174            47,020          100,971
      State                                           -                 -           11,775
                                                -------           -------         --------

       Total expense                            $14,174           $47,020         $112,746
                                                =======           =======         ========
</TABLE>

     The components of temporary differences and the approximate tax effects
     that give rise to the Company's net deferred tax asset at March 31, 1999
     and 1998, are as follows:

<TABLE>
<CAPTION>

                                                        1999                                  1998
     <S>                                             <C>                                   <C>
     Current:
       Section 263A cost in ending inventory         $  44,545                             $  41,340
       Inventory reserves                               31,200                                31,200
       Accounts receivable reserve                       6,760                                     -
                                                     ---------                             ---------

                                                        82,505                                72,540

       Valuation allowance                             (82,505)                              (72,540)
                                                     ---------                             ---------

     Total current asset                             $       -                             $       -
                                                     =========                             =========
</TABLE>


                                       33
<PAGE>

Notes to Financial Statements, Continued



5.   Income Taxes, continued

<TABLE>
<S>                                                      <C>         <C>
     Long-term:
       Net operating loss carryforwards                 $  348,277  $  215,400
       Foreign tax credit carryforwards                     61,194      47,020
       Stock options                                           758       4,200
                                                         ---------   ---------

                                                           410,229     266,620
       Valuation allowance                                (410,229)   (266,620)
                                                         ---------   ---------

     Total long-term asset                               $       -   $       -
                                                         =========   =========
</TABLE>

     During 1999, the Company increased its valuation allowance by $153,574 to
     $492,734, which is maintained against deferred tax assets. Management is
     unable to currently assert that it is more likely than not that the
     deferred tax asset will be realized.

     The provision for income taxes at March 31 differs from the "expected"
     income tax expense (using a Federal income tax rate of 21%) as a result of
     the following:

<TABLE>
<CAPTION>
                                                          1999        1998       1997
     <S>                                                 <C>         <C>         <C>
     Computed "expected" tax expense (benefit)           $(121,706)  $(392,163)  $  55,002
     State income taxes, net of federal income taxes       (28,978)    (93,372)     13,096
     Permanent differences including nondeductible
     registration expenses                                   2,531     261,385         450
     Utilization of state NOLs not previously recorded           -           -     (23,792)
     Change in valuation allowance                         153,574     271,170      67,990
     Other                                                   8,753           -           -
                                                         ---------   ---------   ---------

        Provision for income taxes                       $  14,174   $  47,020   $ 112,746
                                                         =========   =========   =========
</TABLE>

     At March 31, 1999, the Company had net operating loss carryforwards of
     approximately $1.320,000 and $1,428,000 for federal and state purposes,
     respectively, available to offset future taxable income. These
     carryforwards will expire, if not utilized, in 2011 through 2014. The
     Company had $61,194 of foreign tax credit carryforwards at March 31, 1999.
     These credits will expire, if not utilized, in 2004.

                                       34
<PAGE>

Notes to Financial Statements, Continued



6.   Major Customers and Export Sales

     Tice Technology, Inc. had three customers that represented 31%, 22 and 12%
     of its revenues in 1999; 31%, 20% and 19% of its revenues in 1998; and 33%,
     32% and 7% of its revenues in 1997, respectively.

     Approximately 13%, 24% and 6% of the Company's sales were export sales in
     fiscal 1999, 1998 and 1997, respectively. All export sales are paid in U.S.
     funds either in advance of shipment or with an irrevocable letter of
     credit, therefore, there are no gains or losses included in operations
     related to foreign currency exchanges.

7.   Research and Development Costs and Joint Development Agreement

     Research and development costs consist of the following approximate amounts
     at March 31:

<TABLE>
<CAPTION>
                                     1999      1998       1997
          <S>                      <C>       <C>        <C>
          Salaries                 $125,000   $170,000  $108,000
          Travel                          -          -     5,000
          Insurance                   5,000      5,000     3,000
          Payroll taxes               9,000     13,000     4,000
          Telephone                   3,000      4,000     3,000
          Utilities                   1,000      1,000     1,000
          Materials                  30,000     15,000    39,000
                                   --------   --------  --------
                                   $173,000   $208,000  $163,000
                                   ========   ========  ========
</TABLE>

     In December 1994, the Company entered into an agreement with a denim
     clothing manufacturer to develop a specialized sewing machine for the
     manufacture of jeans. This agreement was accounted for by the Company in
     accordance with SFAS 68. The manufacturer reimbursed the Company a total of
     $300,000 for research and development costs, providing $150,000 in both
     fiscal 1996 and 1995. Tice incurred total costs related to this agreement
     of $18,600, $45,500 and $41,903 in fiscal 1999, 1998 and 1997,
     respectively, which are included in the research and development costs
     above.

     Under the terms of the agreement, the denim clothing manufacturer will have
     exclusive rights to purchase specialized sewing machines for an initial
     period of two years from the date of shipment of the first production
     machine. After the initial two year period, in order to maintain

                                       35
<PAGE>

Notes to Financial Statements, Continued



     its exclusive rights, the manufacturer must purchase certain minimum
     quantities. In the event the Company sells the machines to a third party
     during this two-year period, the Company is required to pay royalties to
     the manufacturer at the rate of 4% of the gross selling price up to the
     total amount reimbursed to the Company ($300,000) for research and
     development costs, plus 10% interest. The Company has sold no machines to
     third parties as of March 31, 1999. Under no circumstances is any portion
     of the reimbursement refundable. The equipment related to this agreement is
     currently in the final testing phase with expected shipment of the first
     machines in the second or third quarter of fiscal 2000.

8.   License and Royalty Agreement

     In June 1996, the Company entered into a nonexclusive license and royalty
     agreement with a sewing machine manufacturer to use the electronically
     geared sewing machine technology developed and patented by the Company.
     Under the terms of the agreement, the manufacturer is to pay the Company
     $250,000 upon the sale of the first class of machine built by the
     manufacturer using the technology. In addition, the manufacturer is to pay
     the Company an additional $250,000 plus 2% of the sales price for sales of
     each class of sewing machine produced and sold by the manufacturer using
     the Company's technology. The manufacturer has no obligation to apply the
     Company's technology to additional classes of industrial sewing machines.
     In 1998, the Company earned $250,000 from the sale of one class of machines
     under this license. Royalty income from the sale of the machines produced
     under this agreement was $144,751 and $201,518 in 1999 and 1998,
     respectively.

9.   401(k) Plan

     The Company's 401(k) plan was established in fiscal 1997, and is available
     to all full-time and part-time employees who have completed six months of
     continuous employment with the Company. The Company can make a
     discretionary matching contribution which is determined by the Board of
     Directors at the beginning of each plan year. The matching contribution
     vests at 20% per year over a five year period. Each year, employees must
     work a minimum of 1,000 hours. Vesting at the plan start date is
     retroactive to the date of employment for individuals employed by Tice
     prior to the plan start date. The Company made contributions of
     approximately $13,100 in fiscal 1998 and $0 in fiscal 1999.

10.  Stock Warrants

     On May 5, 1995, TES issued thirty stock warrants, valued at $4,895, to
     Joseph Walker & Sons, Inc. as a retainer for consulting services provided
     to TES in connection with a plan of reorganization. Remaining amounts due
     Joseph Walker & Sons, Inc. were either paid or recorded as a payable and
     have been expensed in the year services were performed. The warrants were
     exercised at a price of $1 per share on August 1, 1997. Upon registration
     of TTI's

                                       36
<PAGE>

Notes to Financial Statements, Continued



     Common Shares with the Securities and Exchange Commission, the thirty
     shares were exchanged for 238,470 shares of TTI's Common Shares.

     On August 1, 1997, the Company issued 1,000,000 warrants to Monogenesis
     Corporation of which a portion was distributed to Monogenesis shareholders.
     The warrants, each of which entitles the holder to purchase one Common
     Share of the Company, have an exercise price of $8.00 and expire two years
     from the date of issuance. At March 31, 1999, 400 warrants had been
     exercised.

11.  Earnings Per Share

     Effective December 31, 1997, the Company adopted SFAS 128. Under SFAS 128,
     both basic and diluted income (loss) per share were $(0.09), $(0.30) and
     $0.01 for the respective years ended March 31, 1999, 1998 and 1997. Basic
     income (loss) per share were computed by dividing net income (loss)
     applicable to common stock by the weighted average common shares
     outstanding during each period. Diluted income (loss) per share were
     computed by dividing net income (loss) applicable to common stock plus the
     effect of assumed conversion of debt and exercise of warrants by weighted
     average common shares outstanding plus dilutive potential common shares.
     Potential common shares are not included in the computation of diluted per
     share amounts in periods when the Company reports a loss. Potentially
     dilutive common equivalent shares were 3,550 and 13,130 for fiscal years
     1999 and 1998, respectively. Basic and diluted income (loss) per share are
     the same for all classes of the Company's common stock (thus they are not
     presented separately) because they have noncumulative dividend rights of
     which none were available for distribution under the terms of the
     Certificate of Incorporation. Due to the Company's recapitalization in
     August 1997, all common share and per share amounts in the accompanying
     financial statements have been restated.

     Following is a reconciliation of the numerators and denominators of the
     basic and diluted income (loss) per share:

                                       37
<PAGE>

Notes to Financial Statements, Continued



<TABLE>
<CAPTION>
                                                            1999          1998         1997
   <S>                                                   <C>          <C>           <C>
   Income (loss)
     Basic:
       Income (loss) available to common stockholders    $ (579,552)  $(1,914,463)  $   41,479

     Effect of dilutive securities:
       Convertible debt                                           -             -       17,900
                                                         ----------   -----------   ----------

     Diluted:
       Income (loss) available to common stockholders
         plus assumed conversions                        $ (579,552)  $(1,914,463)  $   59,379
                                                         ==========   ===========   ==========

   Shares:
     Basic:
       Weighted average common shares outstanding         6,701,752     6,314,804    5,962,500

     Effect of dilutive securities:
       Convertible debt                                           -             -       59,040
       Warrants                                                   -             -      170,357
                                                         ----------   -----------   ----------

     Diluted:
       Weighted average common shares outstanding
         plus assumed conversions                         6,701,752     6,314,804    6,191,897
                                                         ==========   ===========   ==========
</TABLE>

12.  Supplemental Disclosure of Cash Flow Information

<TABLE>
<CAPTION>
                                                            1999          1998         1997
     <S>                                                 <C>          <C>           <C>
     Cash paid during the period for:
       Interest                                          $   45,818   $    23,194   $   67,240
</TABLE>

     Noncash investing and financing activities:

     In fiscal 1999, 1998, and 1997, the Company converted $50,929, $29,378 and
     $25,222, respectively, of accrued interest into notes payable to business
     associates and officers.

     In fiscal 1997, the Company received eight months free rent included in the
     sale of the shopping center and related property. The rent was valued at
     $32,000 and was recorded by the Company as prepaid rent at the time of the
     sale.

     In fiscal 1998, the Company converted $265,850 of debt to business
     associates into 88,560 Common Shares. In addition, the Company converted
     $159,278 of trade accounts payable owed to vendors into 40,000 Common
     Shares.

                                       38
<PAGE>

Notes to Financial Statements, Continued



     Also in fiscal 1998, TTI issued 5,450,220 Common Shares and 7,500 Class B
     Common Shares in exchange for 780 shares of TES Capital Stock.

     In fiscal 1999, the Company canceled a split dollar life insurance policy
     and the corresponding related party note receivable of $79,610 was applied
     against outstanding notes payable to a related party.

     In fiscal 1999, the Company converted $24,707 of accounts payable into
     notes payable. In addition, $19,926 of accounts payable, $50,000 of notes
     payable, and $50,000 of accrued salaries payable were converted to a note
     payable to a related party.

     Also in fiscal 1999, the Company converted $5,999 of trade accounts payable
     owed to vendors into 4,000 Common Shares.

13.  Stock Options

     The Company established a stock option plan in fiscal 1998, to provide
     additional incentives to its officers and employees. Eligible persons are
     determined by management. Each option granted under the plan shall be
     exercisable only during a fixed term from the date of grant as specified by
     management, but generally equal to 10 years. Options are fully vested on
     the date of grant. In fiscal 1998, the Board of Directors approved the
     issuance of up to 54,750 options to acquire common shares of which 43,750
     options were granted during fiscal 1998 and became fully vested upon the
     effective date of the registration statement. No additional options were
     granted under this plan during fiscal 1999.

     The Company established an additional stock option plan in fiscal 1999, to
     provide additional incentives to its officers and employees. Eligible
     persons are determined by management. Each option granted under the plan
     shall be exercisable only during a fixed term from the date of grant as
     specified by management, but generally not to exceed 10 years. Vesting
     requirements of the option are determined by management, but are generally
     not less than one year from the date of grant. The exercise price of the
     options are at least fair market value on the date of grant. The
     stockholders approved the issuance of up to 100,000 options to acquire
     common shares of which no options were granted during the year.

     A summary of outstanding options as of March 31, 1999, and changes during
     the years ended March 31, 1999 and 1998, is presented below:

                                       39
<PAGE>

Notes to Financial Statements, Continued

13.  Stock Options, continued
<TABLE>
<CAPTION>
                                                                                  Weighted-Average
                                                                       Options      Exercise Price
<S>                                                                <C>            <C>
  Outstanding at April 1, 1997                                             -      $             -
    Granted                                                           43,750                 1.00
    Exercised                                                        (28,459)                1.00
    Forfeited                                                              -                    -
                                                                   ---------      ---------------
  Outstanding at March 31, 1998                                       15,291      $          1.00
                                                                   =========      ===============
 Options exercisable at March 31, 1998                                15,291      $          1.00
                                                                   =========      ===============
  Weighted-average fair value per
    share of options granted
    during the year                                                   43,750                 3.50
                                                                   =========      ===============
</TABLE>
<TABLE>
<CAPTION>
                                                                                  Weighted-Average
                                                                       Options      Exercise Price
<S>                                                                <C>            <C>
  Outstanding at April 1, 1998                                        15,291      $          1.00
    Granted                                                                -                    -
    Exercised                                                          5,300                 1.00
    Forfeited                                                            713                    -
                                                                   ---------      ---------------
  Outstanding at March 31, 1999                                        9,278      $          1.00
                                                                   =========      ===============
 Options exercisable at March 31, 1999                                 9,278      $          1.00
                                                                   =========      ===============
  Weighted-average fair value per
    share of options granted
    during the year                                                      -0-                  -0-
                                                                   =========      ===============
</TABLE>

   The weighted average remaining contractual life of outstanding options at
   March 31, 1999 was 0.33 years. The fair value of each option granted is
   estimated on the date of grant using the Black-Scholes option-pricing model
   with the following weighted-average assumptions: dividend growth rate of 0%;
   expected volatility of 1.327; risk-free interest rate of 5.71%; and expected
   lives of two years.

   The Company recorded compensation expense of $109,375 related to options
   granted in August 1997, as the exercise price of the options was less than
   the initial share value of the Company's common stock at grant date.  Had
   compensation cost for the Company's plan been determined consistent with the
   method of SFAS 123, the Company's net loss would have remained the same for
   fiscal 1999 and 1998.

14. Subsequent Events

     On April 30, 1999, the Company entered into an agreement with an outside
investment firm to sell up to 1,500,000 Common Shares for $0.70 per share and
$1,000,000 in notes payable coupled with warrants to purchase 100,000 Common
Shares utilizing a "best efforts" underwriting. On June 25, 1999, this offering
was completed and the Company received $2,025,000 less commissions of $203,913.
The notes payable are secured by the patents related to the Company's electronic
gearing technology and the warrants, which have an exercise price of $0.50 per
share, expire two years from the date of grant. The majority stockholder and
holder of $456,000 of related party notes payable agreed to subordination of
$336,000 of his notes until the $1,000,000 of notes payable are repaid in full.
In addition, two individuals and the investment firm immediately purchased
700,000 Common Shares for $280,000.

     As conditions of the above referenced transactions, the Company appointed a
new President and Chief Executive Officer and entered into a three-year
employment agreement and an incentive stock option agreement with the new
employee. Also, the Company entered into a three-year employment agreement with
the majority stockholder as Executive Vice President and Chief Technology
Officer, and he will remain as Chairman of the Board of Directors. The Company
appointed the new President and Chief Executive Officer to the Board of
Directors, and appointed two representatives of the outside investment firm to
the Board of Directors filling seats opened by the resignation of two then
current Directors.

     One current Director converted notes payable and related accrued interest
of $195,300 into 217,000 Common Shares and the new President and Chief Executive
Officer converted $101,150 of notes payable and related accrued interest into
101,150 Common Shares.

                                  40
<PAGE>

Item 9.  Changes in and Disagreements with Accountants on Accounting and
         Financial Disclosures.

     Not applicable.

                                   PART III

Item 10. Directors and Executive Officers of the Registrant.

     The following are TTI's executive officers and directors.  Brief
descriptions of their experience follow.

             Name                            Position
             ----                            --------

             William A. Tice                 Chairman of the Board, Chief
                                             Technology Officer, Executive Vice
                                             President, Director

             Charles R. West                 President, Chief Executive Officer,
                                             Director (1)

             Karen A. Walton                 Vice President, Secretary/Treasurer

             Michael A. Atkins               Director (2)

             Billie Joe Clayton              Director

             Patrick L. Martin               Director (2)

--------------------------------------------------------------------------------

(1)  In connection with the employment of Mr. West, Mr. Tice, the holder of a
     majority of the issued and outstanding Common Shares and all of the Class B
     Common Shares, agreed to vote the number of his shares necessary to elect
     Mr. West a director of the Company so long as Mr. West's employment
     agreement remains in effect.

(2)  In connection with their purchase of shares and the private placement
     offering of debt and equity of the Company completed on June 25, 1999, Mr.
     Tice agreed to elect two designees of the initial purchasers in the private
     placement (Michael A. Atkins, Patrick L. Martin, and LandOak Securities
     L.L.C., of which Mr. Atkins and Mr. Martin are members) for so long as
     they, together with the initial investors under the private placement own
     at least 10% of the Company's common stock. In addition, if the 10%
     requirement is no longer met, so long as such persons own at least 5% of
     the Company's common stock or the promissory notes sold in the private
     placement remain outstanding, Mr. Tice agreed to elect one of their
     designees a director of the Company. Mr. Atkins and Mr. Martin are the
     initial designees.

                                       41
<PAGE>

     William A. Tice, age 54, has been a director of TTI since its incorporation
     ---------------
in June 1996.  He has served as President and currently serves as Chairman of
the Board, Chief Technology Officer, and a director of TTI and President and a
director of TES.  He has held the positions with TES since 1972 when he
purchased the business from his father.  Mr. Tice received Associate Degrees in
Accounting and Business Administration from Knoxville Business College in 1973.
He has over 30 years experience in the sewing industry.

     Charles R. West, age 42, was elected President, Chief Executive Officer,
     ---------------
and a director of TTI effective May 1, 1999.  From August 1995 to April 1999,
Mr. West was a managing partner of Venture Alliance, LLC, a venture capital firm
in Knoxville, Tennessee, during which time he oversaw the launch of three out of
the firm's eight start-up businesses.  In each of the three, he acted as Chief
Executive Officer until permanent management was located.  Prior to working with
Venture Alliance, LLC, from 1986 to 1995, Mr. West was President and Chief
Executive Officer of MasterCraft Boat Company in Vonore, Tennessee.  He was
Executive Vice President and General Manager of that company from 1985 to 1986
and Vice President - Finance from 1982 to 1985.  Mr. West is a certified public
accountant and received a B.S. in Business Administration from The University of
Tennessee in Knoxville in 1979.

     Karen A. Walton, age 38, currently serves as Vice President,
     ---------------
Secretary/Treasurer, and CFO of both TTI and TES.  She is also Secretary and a
director of TES and has held those positions since 1983.  She was Treasurer of
TES from December 1983 to June 1986 and has held that position since July 1996
and an employee since 1978.  She became General Manager and a Vice President of
TES in 1988.  Ms. Walton became a Licensed Public Accountant in 1989, but due to
her employment with a single company has ceased maintaining the license.  Ms.
Walton received Associate Degrees in Accounting and Computer Programming from
Draughon's Junior College in Knoxville, Tennessee in 1986.

     Michael A. Atkins, age 38, was elected a director of TTI in May 1999.
     -----------------
Since March of 1983, Mr. Atkins has been employed by The Lanrick Group, Inc. in
Knoxville, Tennessee where he provides financial planning and services.  Mr.
Atkins received a B.S. from Auburn University in Auburn, Alabama in 1982 and a
Masters in Financial Planning from The College of Financial Planning in Denver,
Colorado in 1994.

     Billie Joe Clayton, age 62, became a director of TTI and TES in August
     ------------------
1996.  Mr. Clayton is currently the Chief Executive Officer of Clayton Motors,
Inc. and affiliated companies and has held such position since 1961.  He is also
a director and Vice Chairman of the Board of Clayton Homes, Inc. since 1985.  He
is a Regional Director for First Tennessee Bank.

     Patrick L. Martin, age 46, was elected a director of TTI in May 1999.
     -----------------
Since August of 1981, Mr. Martin has been employed by The Lanrick Group, Inc. in
Knoxville, Tennessee where he provides financial planning and services.  Mr.
Martin received a B.A. from the University of Tennessee inn Knoxville in 1974
and a Masters in Financial Planning from The College of Financial Planning in
Denver, Colorado in 1995.

                                       42
<PAGE>

Section 16(a) Beneficial Ownership Reporting Compliance
-------------------------------------------------------

     Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's directors, officers, and persons who
beneficially own more than ten percent of the Common Shares (each, a "Reporting
Person") to file reports of ownership and changes of ownership with the
Securities and Exchange Commission.  Copies of all filed reports are required to
be furnished to the Company pursuant to the Exchange Act.  Based solely upon a
review of the forms and amendments thereto furnished to the Company during the
fiscal year ended March 31, 1999, the Company believes that each Reporting
Person complied with all applicable filing requirements during such fiscal year
with the exception that William A. Tice filed three Form 4s late which related
to three transactions.

Item 11. Executive Compensation

     Effective on May 1, 1999, the Company entered into employment agreements
with William A. Tice to serve as its Chairman of the Board and Executive Vice
President and Charles R. West to serve as President and Chief Executive Officer.
Both agreements are for a term beginning on May 1, 1999 and ending on April 30,
2002 with automatic one-year renewal terms unless terminated on three-months
notice by either party after the initial term.  The agreements may be earlier
terminated in the event of the death, permanent disability or, upon sixty-days
notice, the gross misconduct, material dishonesty or felony  conviction of the
employee.

     Compensation under both agreements, in addition to benefits provided to
other key employees, reimbursement of certain expenses and provision of an
automobile or automobile allowance, is a base salary of $150,000 (subject to
annual reviews and increases by the Board of Directors) and, beginning in the
fiscal year ending March 31, 2001, a target bonus of up to 50% of base salary
payable in accordance with annual goals and objectives set by the Board of
Directors.  Both agreements also provide that if the employee is terminated
without cause, he will be entitled to receive severance pay equal to one-year of
his then current base salary plus the target bonus of 50% of base pay, payable
in a lump sum within fifteen days of termination.  Benefits and perquisites
continue for one-year after termination without cause.

     In addition to the compensation described above, Mr. West received
incentive stock options to purchase Common Shares in an amount that will, if
fully exercised, together with shares he received in payment of a loan to the
Company, bring his cumulative ownership to 10% of the fully diluted outstanding
Common Shares of the Company prior to the private placement.  The options allow
for purchases of up to 690,071 Common Shares.  One-third of the options will
vest on the first anniversary of employment and have an exercise price of $1.00
per share, one-third on the second anniversary with an exercise price of $3.50
per share and the remainder on the third anniversary with an exercise price of
$7.00 per share.  The options will be exercisable for five years from the date
they vest.

     The following table sets forth the compensation of the previous President
and Chief Executive Officer, William A. Tice, for the fiscal years ending March
31, 1999, 1998, and 1997.

                                       43
<PAGE>

                          Summary Compensation Table
                          --------------------------
                              Annual Compensation
                              -------------------
<TABLE>
<CAPTION>
  Name and                                                         Other Annual
  Principal Position           Year   Salary ($)(1)   Bonus ($)  Compensation ($)(2)
-----------------------------  ----  --------------   -------    -------------------
<S>                            <C>   <C>              <C>        <C>
William A. Tice, President,    1999      100,000        -0-            11,871
 Chief Executive Officer       1998      130,000        -0-            30,319
                               1997      105,000        -0-            58,097
</TABLE>

(1)  The 1999 salary includes $25,000 which was converted to a note payable.
     The remainder of $75,000 is carried as accrued salary payable.  The 1998
     salary includes $25,000 of accrued payroll that was converted to a note
     payable as subordinate debt.

(2)  Other annual compensation includes life insurance premiums on split dollar
     (for 1999, $0.00; for 1998, $15,602; and for 1997, $46,228), regular life
     insurance (for 1999, 1998 and 1997, $9,695), health insurance premiums (for
     1999, $2,176; for 1998, $2,022; and for 1997, $1,274), and 401(k) Plan
     match (for 1999, $0.00; for 1998, $3,000; and for 1997, $900) which is the
     same percentage of employer contribution match offered to other employees.
     The Company provided Mr. Tice with the use of a 1989 Mercedes 420 SEL; he
     pays the expenses of operation. Mr. Tice also receives interest on certain
     notes reflecting funds loaned to TES as subordinate debt.

Item 12. Security Ownership of Certain Beneficial Owners and Management

     The following table sets forth information with respect to ownership of
issued and outstanding stock and warrants of TTI by management and 5% or greater
shareholders as of June 1, 1999:

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------
                                                                     Total Number of     Percent
                                                                    Securities Owned       of
        Name and Address                   Title of Class             Beneficially      Class (1)
        ----------------                   --------------           ----------------   -----------
---------------------------------------------------------------------------------------------------
<S>                               <C>                               <C>                <C>
William A. Tice (1)               Common Shares                             5,786,025          75%
7610 Breckenridge Ln.             Class B Common Shares                       750,000         100%
Knoxville, TN                     Common Stock Purchase Warrants                  -0-           0%
---------------------------------------------------------------------------------------------------
Michael A. Atkins (2)             Common Shares                               400,000           6%
1033 Spyglass Way                 Class B Common Shares                           -0-           0%
Knoxville, TN                     Common Stock Purchase Warrants                  -0-           0%
---------------------------------------------------------------------------------------------------
Patrick L. Martin (3)             Common Shares                               400,000           6%
30 Riverdell                      Class B Common Shares                           -0-           0%
Knoxville, TN                     Common Stock Purchase Warrants                  -0-           0%
---------------------------------------------------------------------------------------------------
Billie Joe Clayton                Common Shares                               258,900           4%
817 Laurel Hill Road              Class B Common Shares                           -0-           0%
Knoxville, TN                     Common Stock Purchase Warrants                  -0-           0%
---------------------------------------------------------------------------------------------------
Charles R. West                   Common Shares                               101,151           1%
3516 Navigator Place              Class B Common Shares                           -0-           0%
Knoxville, TN                     Common Stock Purchase Warrants                  -0-           0%
---------------------------------------------------------------------------------------------------
</TABLE>

                                       44
<PAGE>

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------

                                                                     Total Number of    Percent
                                                                    Securities Owned      of
        Name and Address                   Title of Class             Beneficially      Class (1)
        ----------------                   --------------             ------------      --------
-------------------------------------------------------------------------------------------------
<S>                               <C>                               <C>                 <C>
Charles R. West                   Common Shares                            101,151             1%
3516 Navigator Place              Class B Common Shares                        -0-             0%
Knoxville, TN                     Common Stock Purchase Warrants               -0-             0%
-------------------------------------------------------------------------------------------------
Karen Ann Walton                  Common Shares                             10,837             *%
7633 Breckenridge Ln.             Class B Common Shares                        -0-             0%
Knoxville, TN                     Common Stock Purchase Warrants               -0-             0%
-------------------------------------------------------------------------------------------------
P. Bradley Walker (4)             Common Shares                              8,000             *%
Drawer 88, Walker Creek Rd.       Class B Common Shares                        -0-             0%
Walker, WV 26180-9948             Common Stock Purchase Warrants            88,000             9%
-------------------------------------------------------------------------------------------------
Walker Group, The                 Common Shares                                -0-             0%
Drawer 88, Walker Creek Rd.       Class B Common Shares                        -0-             0%
Walker, WV 26180-9948             Common Stock Purchase Warrants            52,000             5%
-------------------------------------------------------------------------------------------------
Monogenesis Corporation           Common Shares                             30,500             *%
Drawer 88, Walker Creek Rd.       Class B Common Shares                        -0-             0%
Walker, WV 26180-9948             Common Stock Purchase Warrants           188,000            19%
-------------------------------------------------------------------------------------------------
Directors and Officers            Common Shares                          6,856,913            87%
  As a Group (5)                  Class B Common Shares                    750,000           100%
                                  Common Stock Purchase Warrants               -0-             0%
-------------------------------------------------------------------------------------------------
</TABLE>

(1)  Mr. Tice is Chairman of the Board, Executive Vice President, and a director
     of TTI. The number of Common Shares listed for Mr. Tice includes 750,000
     Common Shares which he would receive if he converted his Class B Common
     Shares.

(2)  Mr. Atkins is a director of TTI. The number of Common Shares listed for Mr.
     Atkins includes the 100,000 Common Shares owned by LandOak Securities, LLC
     of which Mr. Atkins is a member and a 25% owner.

(3)  Mr. Martin is a director of TTI. The number of Common Shares listed for Mr.
     Martin includes the 100,000 Common Shares owned by LandOak Securities, LLC
     of which Mr. Martin is a member and a 25% owner.

(4)  The warrants reflected for Mr. Walker include the warrants held by The
     Walker Group, Inc.

(5)  The number of Common Shares listed for directors and officers as a group
     included the 750,000 Common Shares that Mr. Tice would receive if he
     converted his Class B Common Shares and the 100,000 Common Shares owned by
     LandOak Securities, LLC over which Mr. Atkins and Mr. Martin have shared
     voting and investment power.

Item 13.  Certain Relationships and Related Transactions

                                       45
<PAGE>

     Management believes that all of the transactions listed below are at least
as fair as a similar transaction with an unaffiliated third party would have
been.

     During the last four years, Mr. Tice has loaned the Company money at an
annual interest rate of 10%. The Company currently owes him approximately
$350,000. For fiscal years ending March 31, 1999, 1998 and 1997 he received
interest totaling $50,929, $21,092, and $7,322, respectively. Mr. Tice has
agreed in the letter of intent entered into with The Lanrick Group, Inc. that
the Company will not make any payments of the remaining amounts owed to him
until the debt issued in the private placement is paid in full. Mr. Tice has
also agreed that the debt to him will be subordinated to all other debts of the
Company.

     Daisy L. Tice, Mr. Tice's mother, loaned the Company $50,000 at an interest
rate of 10% per annum, renewable in ninety day increments. Interest is payable
monthly.

     Mr. West loaned the Company $100,000 at an interest rate of 10% per annum
and converted the principal and interest through April 30, 1999 into 101,151
Common Shares of the Company at a rate of $1.00 per share.

     Mr. Atkins and Mr. Martin are members and owners of The Lanrick Group, Inc.
which entered into an agreement with TTI under which they purchased the Common
Shares for $0.40 per share and became directors of TTI. A related party, LandOak
Securities, LLC, also purchased 100,000 Common Shares for $0.40 per share
pursuant to the agreement. Under the agreement, so long as Mr. Atkins, Mr.
Martin, or their representatives own on a fully diluted basis more than 10% of
TTI, Mr. Tice agrees to elect two of their nominees to the Board of Directors of
TTI and so long as the ownership on a fully diluted basis exceeds 5% or the
promissory notes sold in the private placement closed on June 25, 1999 remain
outstanding, Mr. Tice agrees to elect one of their nominees to the Board of
Directors of TTI. They are also entitled to demand registration and piggyback
registration rights. The Lanrick Group, Inc. also agreed to use its best efforts
to sell the securities offered in the private placement for a commission of 10%
of the amount sold and received such commissions when the offering closed. TTI
also reimbursed The Lanrick Group, Inc. $10,000 for legal costs associated with
the transactions described in the letter of intent. TTI also agreed to elect Mr.
West President and Chief Executive Officer of TTI and enter into an employment
agreement with him which it has done. Mr. Tice and Mr. West agreed that they
would not receive any payouts from TTI except the compensation approved by the
Board of Directors.

     Mr. Clayton loaned the Company $130,000 at an interest rate of 10% per
annum and converted the principal and interest through December 15, 1996 into
44,990 Common Shares of the Company at a rate of $3.00 per share. Mr. Clayton
also loaned the Company funds at an interest rate of 9.5% per annum and
converted the principal and interest through April 30, 1999 into 217,000 Common
Shares at a rate of $0.90 per Common Share.

                                       46
<PAGE>

                                    PART IV

Item 14.    Exhibits, Financial Statement Schedules, and Reports on Form 8-K.

     (a)(1) Financial Statements (See Item 8)

            (i)  Reports of Independent Accountants
            (ii) Consolidated Balance Sheets - March 31, 1999 and 1998
            (ii) Consolidated Statements of Operations - For the years ended
                 March 31, 1999, 1998 and 1997.
            (iv) Consolidated Statement of Changes in Stockholders' Equity - For
                 the years ended March 31, 1999, 1998 and 1997
            (v)  Consolidated Statement of Cash Flow - For the years ended March
                 31, 1999, 1998 and 1997
            (iv) Notes to Financial Statements

        (2) None

        (3) Exhibits Index

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------
                                                                        Exhibit          Page
                                                                     Table Number       Number
                                                                     ------------       ------
------------------------------------------------------------------------------------------------
<S>                                                                  <C>                <C>
I.   Articles of Incorporation and Bylaws                                  3
------------------------------------------------------------------------------------------------
     (i)   Certificate of Incorporation of Tice Technology, Inc.                          +
------------------------------------------------------------------------------------------------
     (ii)  Bylaws of Tice Technology, Inc.                                                +
------------------------------------------------------------------------------------------------
II.  Instruments Defining the Rights of Security Holders                   4
------------------------------------------------------------------------------------------------
     (i)   Common Stock Purchase Warrant Agreement Between Tice                           x
           Technology, Inc. and Warrant Agent
------------------------------------------------------------------------------------------------
     (ii)  Form of Promissory Note Issued in Connection with                             50
           Private Placement Closed on June 25, 1999
------------------------------------------------------------------------------------------------
     (iii) Warrant Agreement relating to Rights to Purchase up                           52
           to 100,000 Common Shares of Tice Technology, Inc.
           Received by Holders of the Promissory Notes
------------------------------------------------------------------------------------------------
     (iv)  Security Agreement Pledging Patents as Security for                           59
           Promissory Notes
------------------------------------------------------------------------------------------------
</TABLE>

                                       47
<PAGE>

<TABLE>
<S>                                                                     <C>                <C>
------------------------------------------------------------------------------------------------
     (v)   Registration Rights Agreement Giving Purchasers under
           the Private Placement Closed on June 25, 1999 Certain
           Demand and Piggyback Registration Rights                                        67
------------------------------------------------------------------------------------------------
     (vi)  Option Agreement Relating to Option to Purchase Up to
           50,000 Common Shares of Tice Technology, Inc. Granted to
           Finder                                                                          80
------------------------------------------------------------------------------------------------
III. Material Contracts                                                 10
------------------------------------------------------------------------------------------------
     (i)   Agreement Between Tice Technology, Inc. and Transfer                            *
           Agent
------------------------------------------------------------------------------------------------
     (ii)  Employment Agreement Between William A. Tice and Tice
           Technology, Inc.                                                                85
------------------------------------------------------------------------------------------------
     (iii) Employment Agreement Between Charles R. West and
           Tice Technology, Inc.                                                           91
------------------------------------------------------------------------------------------------
     (iv)  Incentive Stock Option Plan and Agreement between
           Charles R. West and Tice Technology, Inc.                                       96
------------------------------------------------------------------------------------------------
IV.  Subsidiaries of the Registrant                                     21                 *
------------------------------------------------------------------------------------------------
V.   Financial Data Schedule                                            27                102
------------------------------------------------------------------------------------------------
</TABLE>

*    Included in original filing of Registration Statement by Tice Technology,
     Inc. effective on August 1, 1997 and incorporated by reference herein.

+    Included in Pre-Effective Amendment No. 1 to the Registration Statement and
     incorporated by reference herein.

x    Included in Pre-Effective Amendment No. 2 to the Registration Statement and
     incorporated by reference herein.

(b)  No reports on Form 8-K were filed during the last quarter of the fiscal
     year ended on March 31, 1999.

                                       48
<PAGE>

                                  SIGNATURES
                                  ----------

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

Tice Technology, Inc.


By:  /s/                                                   on June 29, 1999
     -----------------------------------------------------
     Charles R. West, President, Chief Executive Officer


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


/s/                                                        on June 29, 1999
----------------------------------------------------------
William A. Tice, Chairman of the Board, Director


/s/                                                        on June 29, 1999
----------------------------------------------------------
Charles R. West, President, Chief Executive Officer, Director


/s/                                                        on June 29, 1999
----------------------------------------------------------
Karen A. Walton, Chief Financial Officer


/s/                                                        on June 29, 1999
----------------------------------------------------------
Michael A. Atkins, Director


/s/                                                        on June 29, 1999
----------------------------------------------------------
Patrick L. Martin, Director