U.S. Securities and Exchange Commission

                             Washington, D. C. 20549

                                  Form 10-KSB/A

(Mark One)
   (X)      ANNUAL REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
            ACT OF 1934 (Fee Required)

                   For the fiscal year ended November 30, 1999

   ( )      TRANSITION  REPORT  UNDER  SECTION  13 OR 15 (d)  OF THE  SECURITIES
            EXCHANGE ACT OF 1934 (No Fee Required)

               For the transition period from ________ to ________
                          Commission file number 0-5109

                            MICROPAC INDUSTRIES, INC.

        DELAWARE                                               75-1225149
        --------                                               ----------
(State or other jurisdiction of                             (I.R.S. Employer
incorporation or organization)                               Identification No.)

905 E. WALNUT STREET                                              75040
GARLAND, TEXAS                                                 (Zip Code)

                    Issuer's telephone number (972) 272-3571

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

 Title of each class                  Name of each exchange on which registered


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


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

          Securities to be registered under Section 12 (g) of the Act:

                           COMMON STOCK $.10 par value
                           ---------------------------

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

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

              Revenues for its most recent fiscal year: $11,468,000

The aggregate market value of the voting stock held by  non-affiliates  computed
by the average bid and asked prices of such stock, as of a specified date within
the past 60 days, is not determined due to  non-activity  on the market over the
last 5 years.

                   (APPLICABLE ONLY TO CORPORATE REGISTRANTS)

The  number of shares  outstanding  of each of the  issuer's  classes  of common
equity, as of the latest practicable date was 3,627,151 as of November 30, 1999.

                       DOCUMENTS INCORPORATED BY REFERENCE

None


<PAGE>


                                     PART I

Item 1. Business

INTRODUCTION
------------

Micropac Industries,  Inc. (the "Company")  manufactures and distributes various
types of hybrid microcircuits and optoelectronic components and assemblies.  The
Company's  products are used as components  in a broad range of military,  space
and  industrial  systems,  including  aircraft  instrumentation  and  navigation
systems, power supplies, electronic controls and computers and medical devices.

The business was started in 1963 as a sole proprietorship. On March 3, 1969, the
Company was incorporated  under the name of "Micropac  Industries,  Inc." in the
state of Delaware.  Present control succeeded in 1974, and the stock is publicly
held by 601 shareholders on November 30, 1999.

PRODUCTS AND TECHNOLOGIES
-------------------------

The Company's  products are either custom (being  application  specific circuits
designed  and  manufactured  to meet  the  particular  requirements  of a single
customer)  or  standard,   proprietary   components   such  as  catalog   items.
Custom-designed components are estimated to account for approximately 50% of the
Company's sales for the fiscal years ended November 30, 1999 and 1998;  standard
components are estimated to account for approximately 50% of the Company's sales
for the fiscal years ended November 30, 1999 and 1998.

In 1999,  the Company's  investment in technology,  which was expensed,  totaled
approximately  $623,000 ($713,000 in 1998). The Company's research & development
expenditures  were  directed   primarily  toward  long-term   specific  customer
requirements,  some of which  have  future  potential  as  Micropac  proprietary
products,  and product development and improvement associated with the Company's
space level and other high reliability programs.

SALES, MARKETING AND DISTRIBUTION

The Company's products are marketed  throughout the United States and in Western
Europe, through a direct technical sales staff, independent  representatives and
independent stocking distributors. Approximately 8% of the sales for fiscal year
1999 (10% in 1998) were to  international  customers.  Sales to Western European
customers are made by independent  representatives under the coordination of the
Company's office in Bremen, Germany.

CUSTOMERS
---------

The  Company's  major  customers  include   contractors  to  the  United  States
government.  Sales to these  customers  for  Department  of  Defense  (DOD)  and
National  Aeronautics and Space  Administration  (NASA) contracts  accounted for
approximately  72% of the Company's  fiscal net sales in 1999 compared to 80% in
1998.

During 1999, two customers  accounted for more than 10% of the Company's  sales.
These customers  totaled 18.8% and 11.8%  respectively of net sales for the year
ended  November  30,  1999.  No  customers  accounted  for more  than 10% of the
Company's net sales in 1998.

BACKLOG
-------

At November  30,  1999,  the Company had a backlog of unfilled  orders  totaling
approximately  $4,360,000  compared to approximately  $5,212,000 at November 30,
1998.  The Company  expects to complete  and ship most of its  November 30, 1999
backlog  during fiscal 2000.  The reduction of backlog of unfilled  orders could
make it difficult  for the Company to maintain  the business  level of the prior
year.

                                      -2-

<PAGE>


EMPLOYEES
---------

At November 30, 1999, the Company had 118 full-time  employees  (compared to 128
at November 30, 1998), of which 25 were executive and managerial  employees,  26
were   engineers   and   quality-control   personnel,   20  were   clerical  and
administrative  employees,  and  47  were  production  personnel.  None  of  the
Company's employees were covered by collective bargaining agreements.

The Company is an Equal  Opportunity  Employer.  It is the  Company's  policy to
recruit,  hire, train and promote personnel in all job classifications,  without
regard to race, religion,  color,  national origin, sex or age. Above and beyond
non-discrimination, we are committed to an Affirmative Action Program, dedicated
to the hiring,  training,  and advancement  within the Company of minority group
members, women and handicapped individuals.

RISK FACTORS
------------

Pricing  Pressures.  Pricing pressures are being experienced by the Company from
some of its OEM  customers.  In some cases,  the  Company  sells  product  under
agreements with OEMs that require the Company,  at regular intervals,  to review
the pricing structure for possible reduction in selling price for future orders.
This  requires  the Company to improve  its  productivity  and to  approach  its
supplier chain  requesting  similar  pricing  reductions.  If one or both of the
approaches by the Company does not succeed,  product gross margins will decrease
affecting the Company's net earnings.

Limited Insurance  Coverage.  The Company operates  manufacturing  facilities in
Garland,  Texas and Juarez, Mexico. These facilities use industrial machines and
chemicals that could provide risks of personal  injury and/or  property  damage.
There is no assurance that accidents will not occur. If accidents do occur,  the
Company  could  be  exposed  to  substantial  liability  expenses.  The  Company
maintains worker's  compensation  insurance and general liability  insurance for
protection  of its employees and for  protection  of the  Company's  assets.  In
addition to the basic  policies  mentioned,  the Company  maintains  an umbrella
policy  covering  claims up to $10  million  dollars.  The  Company's  financial
position  could be  materially  affected  by claims  not  covered  or  exceeding
coverage currently carried by the Company.

Environmental  Regulations.  The Company is subject to governmental  regulations
pertaining to the use,  storage,  handling and disposal of hazardous  substances
used in connection with its manufacturing activities.  Failure of the Company to
control all  activities  dealing  with  hazardous  chemicals  could  subject the
Company  to  significant  liabilities  or could  cause the  Company to cease its
manufacturing activities.

Product Liability. The use of the Company's products in commercial or government
applications may subject the Company to product liability  claims.  Although the
Company  has not  experienced  any  product  liability  claims,  the sale of any
product  may provide  risk of such  claims.  Product  liability  claims  brought
against  the  Company  could have a  material  adverse  effect on the  Company's
operating results and financial condition.

YEAR 2000 COMPLIANCE
--------------------

The Year 2000 issue was  addressed  and no problems  were  experienced  with the
Company's  hardware  or  software.  The  Company  has  successfully  updated its
commercial  software  to be Y2K  compliant,  reprogrammed  internally  generated
programs used for job cost and  operations  procedures  and updated  hardware as
needed. Testing of the software and hardware has been completed. It is estimated
that the  Company's  cost  associated  with  Y2K  compliance  was  approximately
$40,000. This amount includes personnel time,  materials,  hardware and software
upgrades. All vendors have been contacted in order to assure their capability of
furnishing raw materials  and/or services to the Company in a timely manner.  At
this time,  95% of the vendors have assured the Company they are Y2K  compliant.
The Company has not  experienced  any  difficulty  from the telephone or utility
companies, or any of its major suppliers.


                                      -3-


<PAGE>


COMPETITION
-----------

The Company  competes  with two or more  companies  with  respect to each of its
major  products.  Some of these  competitors are larger and have greater capital
resources  than the  Company.  Management  believes  the  Company's  competitive
position to be  favorable;  however,  no assurance can be given that the Company
can compete successfully in the future.

SUPPLY CHAIN
------------

The parts and raw materials for the Company's  products are generally  available
from more than one  source.  Except for  certain  optoelectronic  products,  the
Company does not  manufacture the basic parts or materials used in production of
its  products.  From time to time,  the Company has  experienced  difficulty  in
obtaining  certain  materials  when needed.  The  Company's  inability to secure
materials for any reason could have adverse effects on the Company's  ability to
deliver  products  on a  timely  basis.  The  Company  uses  capacitors,  active
semiconductor  devices  (primarily  in chip form),  hermetic  packages,  ceramic
substrates, resistor inks, conductor pastes, precious metals and other materials
in its manufacturing operations.

Item 2. Properties
------------------

The  Company  occupies   approximately  36,000  square  feet  of  manufacturing,
engineering and office space in Garland,  Texas.  The Company owns 31,200 square
feet of that space and leases an  additional  4,800  square  feet.  The  Company
considers its facilities adequate for its current level of operations.

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

The  Company  is  not  involved  in  any  material   current  or  pending  legal
proceedings, other than ordinary routine litigation incidental to its business.

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

No matters were submitted to a vote of the Company's  security  holders  through
the  solicitation  of proxies by the  Company  during the fourth  quarter of the
fiscal year ended November 30, 1999.








                                      -4-

<PAGE>


                                     PART II


Item 5.  Market  for the  Registrant's  Common  Equity and  Related  Stockholder
--------------------------------------------------------------------------------
Matters
-------

On November 30, 1999, there were approximately 601 shareholders of record of the
Company's  common  stock.  No  prices  have  been  presented  since  there is no
established public trading market for the Company's common stock.

The Company has never paid dividends on its common stock and does not anticipate
paying dividends in the foreseeable  future.  The Company  presently  intends to
reinvest  any  earnings  for  use  in  the   development  of  new  products  and
technologies for future growth and in order to remain competitive.

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

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

The Company has an established line of credit with a banking  institution in the
amount of $3,000,000 for operating  activities.  The Company expects to generate
adequate  amounts of cash to meet its liquidity  needs from the sale of products
and services and the collection thereof.

Accounts  receivable net,  increased by approximately  $57,000 during 1999. Days
sales in  receivables  totaled  approximately  50 days as of  November  30, 1999
compared to 53 days at November 30, 1998.

The Company has  approximately  $2,933,000  invested in short-term  (one year or
less)  certificates  of deposit at November 30, 1999  compared to  $1,934,000 on
November 30, 1998.

Company management believes it will meet its 2000 capital  requirements  through
existing cash and short-term  and long-term  investments,  internally  generated
funds,  and the renewal of the line of credit in 2000, if needed.  There were no
significant  outstanding  commitments for equipment purchases or improvements at
November 30, 1999.

Results of Operations 1999 vs. 1998
-----------------------------------

Sales in 1999 were approximately  $11,468,000,  a decrease of (0.8%) compared to
1998 sales.  Sales were affected by the government's  "commercial off the shelf"
initiative and lack of new government military and space orders.

Cost of sales, as a percentage of net sales, was 69.7% in 1999 compared to 68.4%
in 1998.  The increase as a percentage of net sales is due to changes in product
mix for the comparable  years.  Expenses for research and development  totaled $
623,000  in  1999  compared  to  $713,000  in  1998.  Most of the  research  and
development expenses were concentrated on expanding it's line of the solid state
relays and power  operational  amplifiers and optocouplers to include  radiation
hardened products, and improving manufacturing processes.

Selling,  general, and administrative expenses decreased approximately ($43,000)
and totaled 19.9% of net sales in 1999 compared to 20.1% in 1998.

Earnings before taxes for fiscal 1999 were approximately $704,000 or 6.1% of net
sales,  compared to $698,000 or 6.0% of net sales in fiscal  1998.  Net earnings
were approximately  $643,000 or $.18 per share, in 1999 versus 1998 net earnings
of $445,000 or $.12 per share. Net income increased in 1999 due to a decrease in
the tax provision as a result of a tax  deduction  taken for the value of a life
insurance policy which was transferred to a company officer during the year.





                                      -5-



<PAGE>



The Company's backlog at the end of 1999 was approximately $4,360,000,  compared
to approximately  $5,212,000 at November 30, 1998. The backlog  decreased due to
completion  of certain major  contracts  received in prior years and lack of new
orders.  The lack of new orders is attributed to reduced  demand for some of the
Company's standard military products and high temperature industrial products.

The  foregoing  discussion  contains  forward-looking  statements  that are made
pursuant to the safe harbor  provisions  of the  Private  Securities  Litigation
Reform Act of 1995. Actual results could differ materially. Investors are warned
that forward-looking statements involve risks and unknown factors including, but
not  limited to,  customer  cancellation  or  rescheduling  of orders,  problems
affecting   delivery  of   vendor-supplied   raw   materials   and   components,
unanticipated manufacturing problems and availability of direct labor resources.
The  Company  disclaims  any   responsibility  to  update  the   forward-looking
statements contained herein, except as may be required by law.

Item 7.  Financial Statements
-----------------------------

The  financial  statements  listed  below  appear on pages 10 through 17 of this
Report.  The Company is not required to furnish the Supplementary  Data required
by Item 302 of Regulation S-K.

       Page No.
       --------

           9               Report of Independent Public Accountants

          10               Balance Sheets as of
                           November 30, 1999 and 1998

          11               Statements of Income for the years ended
                           November 30, 1999 and 1998

          12               Statements of Shareholders' Equity for the years
                           ended November 30, 1999 and 1998

          13               Statements of Cash Flows for the years ended
                           November 30, 1999 and 1998

         14-17             Notes to Financial Statements for the years ended
                           November 30, 1999 and 1998


Item  8.  Changes  in and  Disagreements  with  Accountants  on  Accounting  and
--------------------------------------------------------------------------------
Financial Disclosure
--------------------


None







                                      -6-

<PAGE>


                                    PART III


Item 9. Directors & Executive Officers of The Registrant
--------------------------------------------------------

Information  relating to the Company's  Directors and executive  officers is set
forth in the  Company's  definitive  proxy  statement  relating to the Company's
Annual Meeting of  Stockholders  to be held on March 2, 2000. The information in
the proxy is set forth under the heading  "Election of Directors and Information
as to Directors,  Nominees and Executive  Officers." The proxy statement will be
filed with the Securities  and Exchange  Commission on or about February 1, 2000
and such information is incorporated by reference.

Item 10. Executive Compensation
-------------------------------

Information  relating to executive  compensation  is set forth in the  Company's
definitive  proxy  statement   relating  to  the  Company's  Annual  Meeting  of
Stockholders  to be held on March 2, 2000.  The  information in the proxy is set
forth under the heading  "Executive  Compensation".  The proxy statement will be
filed with the Securities  and Exchange  Commission on or about February 1, 2000
and such information is incorporated by reference.

Item 11. Security Ownership of Certain Beneficial Owners & Management
---------------------------------------------------------------------

Information   relating  to  the  ownership  of  certain  beneficial  owners  and
management  of the  Company's  Common  Stock  is  set  forth  in  the  Company's
definitive  proxy  statement   relating  to  the  Company's  Annual  Meeting  of
Stockholders  to be held on March 2, 2000.  The  information in the proxy is set
forth under the heading  "Securities  Ownership of Certain Beneficial Owners and
Management".  The proxy statement will be filed with the Securities and Exchange
Commission on or about February 1, 2000 and such  information is incorporated by
reference.

Item 12. Certain Relationships and Related Transactions
-------------------------------------------------------

Information relating to the business  relationships and related transaction with
respect to the Company and certain Directors,  executive officers,  nominees for
election as Directors and  beneficial  owners of its  securities is set forth in
the  Company's  definitive  proxy  statement  relating to the  Company's  Annual
Meeting of Stockholders to be held on March 2, 2000. The proxy statement will be
filed with the Securities  and Exchange  Commission on or about February 1, 2000
and such information is incorporated by reference.

Item 13. Exhibits and Reports on Form 8-K
-----------------------------------------

(a) The following  financial  statements of the Company are included in pages 10
through 17.

         Report of Independent Public Accountants

         Balance Sheets as of November 30, 1999 and 1998.

         Statements of Income for the years ended November 30, 1999 and 1998.

         Statements  of  Shareholders'  Equity for the years ended  November 30,
         1999, 1998, 1997.

         Statements  of Cash Flows for the years  ended  November  30,  1999 and
         1998.

         Notes to Financial Statements for the years ended November 30, 1999 and
         1998.

(b) The Company did not file any current  reports on Form 8-K during the quarter
ended November 30, 1999.



                                      -7-


<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.

                            MICROPAC INDUSTRIES, INC.



                                             By:   /S/ Nicholas Nadolsky
                                                   -----------------------------
                                                   Nicholas Nadolsky, CEO
                                                   and Chairman of the Board
                                                   (Principal Executive Officer)



                                             By:   /S/ Dave E. Hendon
                                                   -----------------------------
                                                   Dave Hendon, Controller and
                                                   Principal Accounting Officer

Dated:  01/18/2000






Pursuant to the  requirements  of the Securities and Exchange Act of 1934,  this
report  has  been  signed  below  by the  following  persons  on  behalf  of the
registrant and in the capacities indicated on February 2, 2000.

/S/ Nicholas Nadolsky                           /S/ H. Kent Hearn
--------------------------------                ----------------------------
Nicholas Nadolsky, Director                     H. Kent Hearn, Director







                                                /S/ James K. Murphey
--------------------------------                ----------------------------
                                                James K. Murphey, Director





                                      -8-

<PAGE>


                               ARTHUR ANDERSEN LLP

                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Shareholders of
Micropac Industries, Inc.:

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

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

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

                                                        ARTHUR ANDERSEN LLP

Dallas, Texas,
    December 23, 1999



                                      -9-

<PAGE>

<TABLE>

<CAPTION>

                            MICROPAC INDUSTRIES, INC.
                            -------------------------
                                 BALANCE SHEETS
                                 --------------
                        AS OF NOVEMBER 30, 1999 AND 1998
                        --------------------------------
                    (Dollars in thousands except share data)

                                 ASSETS                             1999       1998
                                 ------                           --------   --------
<S>                                                               <C>        <C>

CURRENT ASSETS:
    Cash and cash equivalents                                     $   502    $   420
    Short-term investments                                          2,933      1,934
    Receivables, net of allowance for doubtful accounts
        of $92 in 1999 and $104 in 1998                             1,579      1,522
    Inventories

        Raw materials and supplies                                  1,246      1,851
        Work-in-process                                               908      1,090
                                                                  -------    -------
                  Total inventories                                 2,154      2,941

    Deferred income taxes                                             249        301
        Prepaid income taxes                                          166       --
    Prepaid expenses and other assets                                  57         19
                                                                  -------    -------
                  Total current assets                              7,640      7,137

PROPERTY, PLANT, AND EQUIPMENT, at cost:
    Land                                                               80         80
    Buildings                                                         498        498
    Facility improvements                                             678        690
    Machinery and equipment                                         4,493      4,434
    Furniture and fixtures                                            340        349
                                                                  -------    -------
                  Total property, plant, and equipment              6,089      6,051
    Less- Accumulated depreciation                                 (4,945)    (4,812)
                                                                  -------    -------
        Net property, plant, and equipment                          1,144      1,239
                                                                  -------    -------

                  Total assets                                    $ 8,784    $ 8,376
                                                                  =======    =======

                  LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
    Accounts payable                                              $   365    $   316
    Accrued payroll                                                   214        332
    Accrued professional fees                                          75         54
    Income taxes payable                                             --          185
        Property taxes                                                 88         93
           Commissions payable                                         45         20
        Other accrued liabilities                                      49         71
                                                                  -------    -------
                  Total current liabilities                           836      1,071
                                                                  -------    -------

DEFERRED INCOME TAXES                                                  43         43
COMMITMENTS AND CONTINGENCIES (Note 4)
SHAREHOLDERS' EQUITY:
    Common stock, $.10 par value, authorized 10,000,000 shares,
        3,627,151 outstanding at November 30, 1999 and 1998           363        363
    Paid-in capital                                                   885        885
    Retained earnings                                               6,657      6,014
                                                                  -------    -------
                  Total shareholders' equity                        7,905      7,262
                                                                  -------    -------

                  Total liabilities and shareholders' equity      $ 8,784    $ 8,376
                                                                  =======    =======
</TABLE>


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



                                      -10-

<PAGE>


<TABLE>

<CAPTION>

                            MICROPAC INDUSTRIES, INC.
                            -------------------------
                              STATEMENTS OF INCOME
                              --------------------
                 FOR THE YEARS ENDED NOVEMBER 30, 1999 AND 1998
                 ----------------------------------------------
                    (Dollars in thousands except share data)



                                                             1999          1998
                                                         -----------    -----------

<S>                                                      <C>            <C>

NET SALES                                                $    11,468    $    11,556

COSTS AND EXPENSES:
Cost of sales                                                  8,001          7,906
Research and development                                         623            713
Selling, general, and administrative expenses                  2,284          2,327
Interest income                                                 (144)           (88)
                                                         -----------    -----------

                  Total costs and expenses                    10,764         10,858
                                                         -----------    -----------

INCOME BEFORE INCOME TAXES                                       704            698

PROVISION (BENEFIT) FOR INCOME TAXES:
    Current                                                        9            300
    Deferred                                                      52            (47)
                                                         -----------    -----------

        Total provision for current and deferred taxes            61            253
                                                         -----------    -----------

NET INCOME                                               $       643    $       445
                                                         ===========    ===========

BASIC AND DILUTED EARNINGS PER SHARE                     $       .18    $       .12
                                                         ===========    ===========

WEIGHTED AVERAGE NUMBER OF SHARES, basic and diluted       3,627,151      3,627,151
                                                         ===========    ===========

</TABLE>








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



                                      -11-

<PAGE>


                            MICROPAC INDUSTRIES, INC.
                            -------------------------
                       STATEMENTS OF SHAREHOLDERS' EQUITY
                       ----------------------------------
                 FOR THE YEARS ENDED NOVEMBER 30, 1999 AND 1998
                 ----------------------------------------------
                             (Dollars in thousands)

                                    Common     Paid-in    Retained
                                    Stock      Capital    Earnings     Total
                                   ------     ------      ------      ------


BALANCE, November 30, 1997         $  363     $  885      $5,569      $6,817

    Net income for 1998              --         --           445         445
                                                                      ------

BALANCE, November 30, 1998            363        885       6,014       7,262

    Net income for 1999              --         --           643         643
                                   ------     ------      ------      ------

BALANCE, November 30, 1999         $  363     $  885      $6,657      $7,905
                                   ======     ======      ======      ======























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

                                      -12-


<PAGE>

<TABLE>

<CAPTION>

                            MICROPAC INDUSTRIES, INC.
                            -------------------------
                            STATEMENTS OF CASH FLOWS
                            ------------------------
                 FOR THE YEARS ENDED NOVEMBER 30, 1999 AND 1998
                 ----------------------------------------------
                             (Dollars in thousands)

                                                                         1999       1998
                                                                        -------    -------
<S>                                                                     <C>        <C>

CASH FLOWS FROM OPERATING ACTIVITIES:
    Net income                                                          $   643    $   445
    Adjustments to reconcile net income to
        net cash provided by operating activities-
           Depreciation and amortization                                    241        148
           Loss on disposal of equipment                                     15       --
           Deferred tax provision                                            52        (47)
           Changes in certain current assets and current liabilities-
              (Increase) decrease in receivables, net                       (57)       890
              Decrease (increase) in inventories                            787       (177)
              Increase in prepaid expenses and other assets                 (38)       (12)
              Increase in current year prepaid income taxes                (166)      --
              Increase (decrease) in accounts payable                        49       (491)
              Decrease in accrued payroll                                  (118)       (10)
              (Decrease) increase in income taxes payable                  (185)        75
              Increase (decrease) in all other accrued liabilities           19        (53)
                                                                        -------    -------

                  Total adjustments                                         599        323
                                                                        -------    -------

                  Net cash provided by operating activities               1,242        768
                                                                        -------    -------

CASH FLOWS FROM INVESTING ACTIVITIES:
    Changes in short-term investments                                      (999)      (391)
    Additions to property, plant, and equipment, net                       (161)       (63)
                                                                        -------    -------

                  Net cash used in investing activities                  (1,160)      (454)
                                                                        -------    -------

CASH FLOWS FROM FINANCING ACTIVITIES                                       --         --
                                                                        -------    -------

NET INCREASE IN CASH                                                         82        314
                                                                        -------    -------

CASH AND CASH EQUIVALENTS, beginning of year                                420        106
                                                                        -------    -------

CASH AND CASH EQUIVALENTS, end of year                                  $   502    $   420
                                                                        =======    =======

SUPPLEMENTAL CASH FLOW DISCLOSURES:
    Cash paid for interest                                              $  --      $  --
                                                                        =======    =======
    Cash paid for income taxes, net of refunds received                 $   362    $   230
                                                                        =======    =======
</TABLE>




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

                                      -13-


<PAGE>


                            MICROPAC INDUSTRIES, INC.

                          NOTES TO FINANCIAL STATEMENTS

                           NOVEMBER 30, 1999 AND 1998

1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
     -------------------------------------------

Revenue Recognition
-------------------

Revenues are recorded as  deliveries  are made based upon contract  prices.  Any
losses anticipated on fixed price contracts are provided for currently.

Short-Term Investments
----------------------

Short-term investments include certificates of deposits with original maturities
greater than 90 days.  These  investments  are reported at historical cost which
approximates fair market value as of November 30, 1999 and 1998.

Inventories
-----------

Inventories  are stated at lower of cost or market  value and include  material,
labor and  manufacturing  overhead.  All  inventories  are valued using the FIFO
(first-in, first-out) method of inventory valuation.

Income Taxes
------------

Deferred income taxes are recorded for temporary  differences  between financial
and tax reporting.

Property, Plant, and Equipment
------------------------------

Property, plant, and equipment are carried at cost, and depreciation is provided
using the  straight-line  method at rates based upon the following  useful lives
(in years) of the assets:

     Buildings.............................................................15
     Facility improvements...............................................8-15
     Furniture and fixtures...............................................5-8
     Machinery and equipment.............................................5-10

Basic Earnings Per Share
------------------------

Basic Earnings per share are computed based upon the weighted  average number of
shares outstanding during the year.

The Company was required to adopt  Statement of Financial  Accounting  Standards
No. 128 ("SFAS No.  128") - "Earnings  Per Share" in fiscal  1998.  SFAS No. 128
established  standards for computing and presenting earnings per share (EPS) and
applies to entities with  publicly held common stock or potential  common stock.
SFAS NO. 128 replaces the  presentation  of primary EPS with a  presentation  of
basic EPS. It also  requires dual  presentation  of basic and diluted EPS on the
face of the income  statement for all entities with complex  capital  structures
and requires a reconciliation  of the numerator and denominator of the basic EPS
computation  to the numerator and  denominator  of the diluted EPS  computation.
Adoption of this  statement had no impact on the  Company's  fiscal 1999 or 1998
financial statements since the Company has no common stock equivalents.





                                      -14-

<PAGE>


Use of Estimates
----------------

The  preparation  of financial  statements in conformity  with general  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.

Reclassifications
-----------------

Certain amounts have been reclassified to conform to current year presentation.

2.   NOTES PAYABLE TO BANKS:
     -----------------------

During fiscal 1999 the Company entered into a new line of credit  agreement with
a bank which provides a $3 million line of credit. The interest rate is equal to
the prime rate less 1/4%,  which at November  30,  1999,  was 8.5%.  The line of
credit expires  September 6, 2000. As of November 30, 1999,  there were no loans
outstanding under the line of credit  agreement.  During fiscal 1998 the Company
had a line of credit  agreement  with a bank which provided a $3 million line of
credit.  The  interest  rate was equal to the prime  rate  less  1/4%,  which at
November 30, 1998, was 7.75%.  The line of credit expired  September 6, 1999. As
of November 30, 1998, there were no loans  outstanding  under the line of credit
agreement.

3.   RELATED PARTIES:
     ----------------

The Company  leases a building from the Company's  Chairman of the Board.  A new
lease was  signed on July 1, 1999 for a term of five (5) years and  expiring  on
June 30, 2004.  The lease was renewed under similar terms and  conditions as the
prior lease. Amounts paid under the old and new lease in 1999 were approximately
$35,000 and $34,000 in 1998.

4.   LEASE COMMITMENTS:
     ------------------

Rent expense for the years ended November 30, 1999 and 1998,  was  approximately
$42,000 and $39,000 respectively.

Future minimum lease payments under  non-cancelable  operating leases for office
and  manufacturing  space  with  remaining  terms  in  excess  of one  year  are
approximately:

                2000                        $35,000
                2001                         35,000
                2002                         35,000
                2003                         35,000
                2004                         20,400

5.   EMPLOYEE BENEFITS:
     ------------------

The Company  sponsors an Employees'  Profit Sharing Plan and Trust (the "Plan").
Pursuant to section  401(k) of the Internal  Revenue Code, the Plan is available
to  substantially  all employees of the Company.  Employee  contributions to the
Plan are matched by the Company at amounts up to 6% of the participant's salary.
Contributions  made by the  Company  were  approximately  $125,000  in 1999  and
$43,000 in 1998. Employees become vested at 20% after three years and 100% after
seven  years.  The  Company  matches  100%  of  the  employee   contribution  in
anticipation that the employee will be with the Company the full seven years. If
the  employee  leaves the Company  prior to being  fully  vested,  the  unvested
portion of the Company's  contributions  are forfeited and such  forfeitures are
used to lower future Company contributions.

The Company does not offer other post retirement benefits to its employees.



                                      -15-

<PAGE>


<TABLE>

<CAPTION>

6.   INCOME TAXES:
     -------------

The Company  accounts for its income  taxes  according to Statement of Financial
Accounting Standard No. 109, "Accounting for Income Taxes."

The income tax provision consisted of the following for the years ended November
30:

                                                                          1999          1998
                                                                       ---------      --------
<S>                                                                    <C>            <C>        <C>

                  Current (Benefit) Provision-
                      Federal                                           $(14,000)     $238,000
                      State                                               23,000        62,000
                                                                       ---------      -------
                                                                           9,000       300,000
                  Deferred Provision (Benefit)-

                      Federal                                             52,000       (47,000)
                                                                       ---------      --------

                               Total                                     $61,000      $253,000
                                                                       =========      ========


The  provision  for income  taxes  differs  from that  computed  at the  federal
statutory corporate tax rate as follows:

                                                                         1999            1998
                                                                       ---------       ---------

         Tax at 34% statutory rate                                      $239,000       $238,000
         State income taxes, net of federal benefit                       15,000         41,000
         Non taxable life insurance benefit                             (212,000)       -
         Other                                                            19,000        (26,000)
                                                                       ---------       --------

                  Income tax provision                                 $  61,000       $253,000
                                                                       =========       ========


The  components  and  changes in  deferred  tax assets and  liabilities  were as
follows:

                                                                                  Deferred
                                                                                 (Provision)
                                                          November 30, 1999        Benefit       November 30,1998
                                                          -----------------    ---------------   ----------------
         Current Deferred Tax Assets-

              Allowance for doubtful accounts                 $  34,000          $  (5,000)          $  39,000
              Inventory                                         148,000            (22,000)            170,000
              Accrued liabilities and other                      67,000            (25,000)             92,000
                                                              ---------          ----------          ---------

                  Net current deferred tax                     $249,000           $(52,000)           $301,000
                                                               ========           ========            ========

         Non-current Deferred Tax Liabilities-

              Depreciation and other                          $  43,000                              $  43,000
                                                              ---------                              ---------

              Net noncurrent deferred tax                     $  43,000                              $  43,000
                                                              =========                              =========

      Deferred tax provision                                                      $(52,000)
                                                                                  ========

</TABLE>



                                      -16-

<PAGE>


7.   SIGNIFICANT CUSTOMER INFORMATION:
     ---------------------------------

The Company's primary line of business relates to the design,  manufacture,  and
sale of hybrid microcircuits and optoelectronic components and assemblies. Sales
result primarily from  subcontracts  with customers for ultimate  production and
delivery  to the United  States  government.  Sales to primary  contractors  for
defense and space related contracts accounted for 72% of total sales in 1999 and
80% of total sales in 1998.  Customer  credit is granted and maintained for both
United States and European customers by the Corporate  Accounting  Department in
Garland,  Texas.  During 1999,  the Company had two customers that accounted for
18.8% and 11.8%  respectively of the Company's  annual sales. The Company had no
customers  that  accounted for more than 10% of the  Company's  annual sales for
fiscal 1998.









                                      -17-




<PAGE>



                             DIRECTORS AND OFFICERS
                             ----------------------
                                NOVEMBER 30, 1999



                                NICHOLAS NADOLSKY
                           Chief Executive Officer and
                              Chairman of the Board

                               HEINZ-WERNER HEMPEL
                             Chief Operating Officer
       Hanseatishe Waren Handelsgesellschaft MBH & Co. KG, Bremen, Germany


                                  H. KENT HEARN
                                   Stockbroker
                          Milkie-Fergerson, Dallas, Tx.

                                JAMES K. MURPHEY
                               Corporate Attorney
                       Secore & Waller, L.L.P. Dallas, Tx.


                                   CONNIE WOOD
                      President and Chief Operating Officer


LEGAL COUNSEL                                         TRANSFER AGENT & REGISTRAR
SECORE & WALLER, L.L.P.                               SECURITIES TRANSFER CORP.
ONE GALLERIA TOWER, SUITE 2290                        16910 DALLAS PARKWAY
13355 NOEL ROAD, L.B. 75                              SUITE 100
DALLAS, TEXAS   75240-6657                            DALLAS, TEXAS 75248





                                      -18-