ANNUAL REPORT 1999


                                   COVER PAGE
<PAGE>
                                FINANCIAL SUMMARY

<TABLE>
<CAPTION>
===================================================================================================================
                                                                                              98 TO 99     97 TO 98
At or For Year Ended November 30                1999            1998             1997         % CHANGE     % CHANGE
-------------------------------------------------------------------------------------------------------------------
<S>                                         <C>             <C>              <C>                 <C>          <C>
OPERATIONS
-------------------------------------------------------------------------------------------------------------------
Net revenues                                $ 5,818,222     $ 4,015,698      $ 4,076,897         44.9         (1.5)
Operating income (loss)                     $   257,662     $   (31,418)     $  (864,398)           *        (96.4)
Income (loss) before income taxes (benefit) $    19,753     $  (276,283)     $(1,060,360)           *        (73.9)
Net income (loss)                           $    19,753     $  (276,283)     $(1,060,360)           *        (73.9)
Weighted average common shares outstanding    3,458,552       3,453,451        3,453,451          0.1            -
-------------------------------------------------------------------------------------------------------------------
PER SHARE DATA^
-------------------------------------------------------------------------------------------------------------------
Net income (loss)                                 $ .01          $ (.08)          $ (.31)           *        (74.2)
Cash dividends                                      $ -             $ -              $ -           NA           NA
Stockholders' equity                              $ .13           $ .11            $ .19         18.2        (42.1)
-------------------------------------------------------------------------------------------------------------------
FINANCIAL POSITION
-------------------------------------------------------------------------------------------------------------------
Assets                                       $3,392,190      $2,706,650      $ 2,757,331         25.3         (1.8)
Working capital (deficit)                    $ (560,625)     $ (563,725)     $   570,259          0.5            *
Property and equipment                       $1,011,676      $1,059,912      $ 1,129,377         (4.6)        (6.2)
Long-term debt, less current maturities      $        -      $  114,889      $ 1,042,055       (100.0)       (89.0)
Stockholders' equity                         $  451,051      $  381,297      $   657,581         18.3        (42.0)
-------------------------------------------------------------------------------------------------------------------
Number of employees                              25              22               25
Number of stockholders                      approx. 800     approx. 800     approx. 1200
-------------------------------------------------------------------------------------------------------------------
 * Because the data changes from negative to positive, the percentage of change
   is not meaningful.
 ^ Earnings (loss) per share, assuming full dilution, are equivalent to earnings
   (loss) per share.
===================================================================================================================
                                                 INDEX
Financial Summary                                                              1
Letter to Shareholders                                                         2
Selected Financial Data                                                        4
Management's Discussion and Analysis                                           5
Independent Auditor's Report                                                  13
Balance Sheets                                                                14
Statements of Operations                                                      16
Statements of Stockholders' Equity                                            17
Statements of Cash Flows                                                      18
Notes to the Financial Statements                                             20
Shareholder Information                                                       32
Directors and Officers                                                        32
</TABLE>
                                       1
<PAGE>


                            DEAR FELLOW SHAREHOLDER:

================================================================================

The results in 1999 have indeed confirmed that our strategy of diversification
that was introduced in the fall of 1997 has allowed the Company to grow. Most
aspects of our business improved compared with 1998. Bookings and revenues have
increased approximately 50%, our backlog at the end of 1999 was twice as large
as that at the end of 1998, and we have returned the Company to profitability.
The major contributors to our improved performance in 1999 have been our AGV
system business and our product distribution business.

Other items in 1999 that contributed to the improved performance are the
introduction of an improved and even more user-friendly generation of the
Lazerway (TM) technology and the hiring of highly qualified people for our
engineering department. The Company implemented a re-organization effective
December 1, 1999 to focus its resources on future growth areas.

On September 13, 1999 the Company signed a merger agreement with Portec, Inc.,
which was later mutually terminated on November 15. Although the termination of
the merger was seen as a setback at the time, the improved performance of the
Company in 1999 should allow the Company to continue to grow from a stronger
platform.

The Company has invested considerable time and resources to develop a number of
strategic market segments for our AGV system solutions and technology during the
last two years. Our efforts have generated several new business opportunities.
We are very hopeful that we will see these opportunities come to fruition in the
next couple of years.

Some notable events in 1999:

         o  Through our partner, Harcon Engineering, we were awarded a large
            order from DaimlerChrysler for a turnkey AGV system to be installed
            and commence operation in the year 2000 at a new facility in
            Detroit.

         o  The Company received an order for a turnkey AGV system from one of
            the largest commercial printing companies in North America.

         o  The Company completed registration of its new trademark PowerWay(TM)
            under which it will market and sell batteries, chargers and other
            AGV-related products.

         o  A distribution agreement was signed with Micropower, a Swedish
            manufacturer of smart battery chargers, giving NDCA exclusive
            marketing rights for the AGV market in North America for an initial
            period of three years.

                                       2
<PAGE>

================================================================================

o             A distribution agreement was signed with a world leader in
              batteries, giving the Company exclusive marketing rights for the
              AGV market in North America for a new line of highly advanced
              batteries.

o             Several orders were received from the entertainment industry for
              the Company's line of drive motors and its new PowerWay product
              line of batteries and battery chargers.

o             Negotiations with the Raymond Corporation, a leading manufacturer
              of industrial "forklift" trucks, were concluded in December 1999
              for a cooperation agreement between the two companies, in which
              NDCA assumes the responsibility for the service and support of
              Raymond's installed base of AGV systems in North America. This
              agreement offers NDCA valuable access to a large number of Fortune
              500 companies and to Raymond's prominent dealer organization.

I want to take this opportunity to give a special thanks to Mr. Ralph Dollander
for all the hard work he performed while being President of the Company. He was
instrumental in turning the Company around in 1999 and we are now well
positioned to carry this positive trend into the new year. I also need to thank
the employees as well as the shareholders of NDC Automation for all your support
and loyalty during the past year as we continue our quest for a successful
future.


 February 2000


Sincerely yours,



Claude Imbleau
Chief Operating Officer

                                       3
<PAGE>
<TABLE>
<CAPTION>
                             SELECTED FINANCIAL DATA

==================================================================================================================================

                                                                          At or For Year Ended November 30
                                                   -------------------------------------------------------------------------------

                                                        1999           1998            1997            1996            1995
----------------------------------------------------------------------------------------------------------------------------------
Statements of Operations Data:
<S>                                                   <C>             <C>             <C>             <C>             <C>
    Net revenues                                      $ 5,818,222     $ 4,015,698     $ 4,076,897     $ 6,142,954     $ 7,851,147
    Cost of goods sold                                  3,614,922       2,387,342       2,695,289       3,864,393       5,597,305
----------------------------------------------------------------------------------------------------------------------------------
       Gross profit                                   $ 2,203,300     $ 1,628,356     $ 1,381,608     $ 2,278,561     $ 2,253,842
----------------------------------------------------------------------------------------------------------------------------------

Net gain from restructuring of operations                     $ -             $ -             $ -             $ -       $ 366,764
----------------------------------------------------------------------------------------------------------------------------------

Operating expenses:
    Selling                                             $ 723,162       $ 662,780       $ 693,106       $ 656,537       $ 776,907
    General and administrative                          1,222,476         996,994       1,552,900       1,422,586       3,288,619
    Research and development                                    -               -               -           3,942         141,220
----------------------------------------------------------------------------------------------------------------------------------
                                                      $ 1,945,638     $ 1,659,774     $ 2,246,006     $ 2,083,065     $ 4,206,746
----------------------------------------------------------------------------------------------------------------------------------
       Operating income (loss)                          $ 257,662       $ (31,418)     $ (864,398)      $ 195,496    $ (1,586,140)
----------------------------------------------------------------------------------------------------------------------------------

Net interest income (expense):
    Interest income                                           $ -             $ -             $ -         $ 7,771         $ 9,025
    Interest expense                                     (237,909)       (244,865)       (195,962)       (186,665)       (669,157)
----------------------------------------------------------------------------------------------------------------------------------
                                                       $ (237,909)     $ (244,865)     $ (195,962)     $ (178,894)     $ (660,132)
----------------------------------------------------------------------------------------------------------------------------------

Income (loss) before income taxes (benefit)              $ 19,753      $ (276,283)   $ (1,060,360)       $ 16,602    $ (2,246,272)
Federal and state income taxes (benefit)                        -               -               -         (28,829)         97,891
----------------------------------------------------------------------------------------------------------------------------------
       Net income (loss)                                 $ 19,753      $ (276,283)   $ (1,060,360)       $ 45,431    $ (2,344,163)
==================================================================================================================================

Weighted average number of
   common shares outstanding
  (Basic and fully diluted)                             3,458,552       3,453,451       3,453,451       3,453,451       2,904,322
==================================================================================================================================

Basic and diluted earnings (loss) per share                 $ .01          $ (.08)         $ (.31)          $ .01          $ (.81)
==================================================================================================================================

Cash dividend declared per common share                       $ -             $ -             $ -             $ -             $ -
==================================================================================================================================

Balance Sheets Data:
Working capital (deficit)                              $ (560,625)     $ (563,725)      $ 570,259     $ 1,416,912     $ 1,227,144
Total assets                                          $ 3,392,190     $ 2,706,650     $ 2,757,331     $ 4,556,794     $ 5,084,450
Long-term debt, less current maturities                       $ -       $ 114,889     $ 1,042,055     $ 1,102,264     $ 1,170,311
Total liabilities                                     $ 2,941,139     $ 2,325,353     $ 2,099,750     $ 2,838,853     $ 3,411,940
Stockholders' equity                                    $ 451,051       $ 381,297       $ 657,581     $ 1,717,941     $ 1,672,510
</TABLE>
                                       4
<PAGE>
                      MANAGEMENT'S DISCUSSION AND ANALYSIS

================================================================================

     The following discussion and analysis should be read in conjunction with
the financial statements (including the notes thereto) presented elsewhere
herein.

OVERVIEW
     The Company derives virtually all of its revenues from the sale of
hardware, software and engineering services in connection with projects
incorporating its Automated Guided Vehicle (AGV) control technology. In prior
years the Company's net revenues from AGV systems, vehicles and technology were
derived primarily from sales to customers serving two industries -- textiles and
newspaper publishing. Net revenues since 1995 however have been derived from
other industries, e.g. automotive, CD manufacturing, food, paper. The Company's
results of operations can be expected to continue to depend substantially upon
the capital expenditure levels in those industries and in other industries that
it may enter. During 1996 and for the first three quarters of 1997, the Company
refocused its sales efforts to existing original equipment manufacturers (OEMs)
and system integrators in the AGV systems industry. Such OEMs and system
integrators have historically sold products to end users to whom the Company
occasionally had direct sales. In September of 1997, however, the Company began
to again pursue AGV system sales in selected market niches to supplement
revenues obtained from sales to OEMs and system integrators.

     Due to the long sales cycle involved, uncertainties in timing of projects,
and the large dollar amount a typical project usually bears to the Company's
historical and current quarterly and annual net revenues, the Company has
experienced, and can be expected to continue to experience, substantial
fluctuations in its quarterly and annual results of operations.

     The Company sells its products and services primarily in two ways.
Vehicles, technology and other products and services may be sold in a "project"
that becomes an integrated AGV system. Another way is to sell hardware, software
and services as standard items, with less involvement by the Company in overall
system design. The Company generally would recognize lower net revenue but would
realize a higher gross profit margin percentage in selling standard items, in
each case compared to the sale of a project, due to the inclusion in project
sales of other vendors' products and services with margins generally lower than
the Company's own products and services. Between any given accounting periods,
the levels of and mixture of standard item sales and project sales can cause
considerable variance in net revenues, gross profit, gross profit margin,
operating income and net income.

     Revenues from standard item sales are recognized upon shipment, while
revenues from project sales are recognized under the "percentage of completion"
method. Under this method, with respect to any particular customer contract,
revenues are recognized as costs are incurred relative to each major component
of the project. Although the percentage of completion method will ordinarily
smooth out over time the net revenue and profitability effects of large
projects, such method nevertheless subjects the Company's results of operations
to substantial fluctuations dependent upon the progress of work on project
components. Such components can differ markedly from one another in amount and
in gross profit margin.

     Project contracts are billed upon attainment of certain "milestones." The
Company grants payment terms of 30 to 90 days to its customers. It typically
receives a cash advance ranging from 10% to 30% of the total contract amount.
Bills are thereafter delivered as milestones are reached. Upon delivery of the
project, the customer typically reserves a "retainage" of 10% to 20% pending
system acceptance.

     Notwithstanding the receipt by the Company of cash advances and periodic
payments upon reaching project milestones, the Company requires external
financing for its costs and estimated earnings in excess of billings on
uncompleted contracts, inventories, receivables and other assets.

     The Company's backlog consists of all amounts contracted to be paid by
customers but not yet recognized as net revenues by the Company.

                                       5
<PAGE>


                      MANAGEMENT'S DISCUSSION AND ANALYSIS

================================================================================

     TERMINATED ACQUISITION OF NDCA BY PORTEC: On September 13, 1999 the Company
entered into a definitive agreement to merge with a subsidiary of Portec, Inc.
Portec, Inc. is a subsidiary of J Richard Industries (See Company's 8-K filing
dated September 17, 1999). The transaction was structured as a merger in which a
newly-formed subsidiary of Portec would merge with and into the Company, with
the Company surviving as a wholly owned subsidiary of Portec. In the merger,
stockholders of the Company were to receive $0.75 per share in cash for a total
stock transaction value in excess of $2.5 million. In addition, as part of the
merger closing, the Company's bank debt (line of credit and mortgage) was to be
paid in full as well as the Netzler & Dahlgren note payable. It was estimated
that such debt would be in excess of $1.3 million at closing. The transaction
was subject to customary conditions including approval by the Company's
shareholders.

     The Company retained Willamette Management Associates as its financial
advisor. Willamette had rendered its opinion to the Board of Directors that the
consideration to be paid in the merger was fair to the stockholders from a
financial point of view.

      J Richard Industries, L.P. is a Toledo, Ohio-based manufacturer and
distributor of components used in the materials handling, sports, fitness and
automotive markets. Portec is a leading manufacturer of highly engineered
materials handling subsystems in the industrial automation market. Its products
include specialty conveyor systems such as power turns, spirals and chutes,
electronic wire guidance controllers for lift trucks, and conveyor systems used
in the material handling and sorting of recycled materials.

     The merger was expected to provide financial support for NDCA to pursue its
strategic business plan while providing a cash return to the Company's
shareholders.

        On November 15, 1999 the Company and Portec jointly announced the
termination of the Agreement and Plan of Merger dated as of September 13, 1999.
As a result of this termination, NDCA continued as a public company and was not
acquired by Portec.

         As part of the termination agreement, Portec reimbursed NDCA for
$75,000 in merger related expenses and J Richard Industries LP, provided $50,000
in equity in return for 133,000 newly issued common shares of NDCA. The $50,000
increased NDCA's working capital for general corporate purposes. The new shares
were restricted shares, meaning that they cannot be resold unless registered
under applicable securities laws or pursuant to an exemption from registration.

         NDCA will continue to actively pursue new business combinations and
financing to improve its working capital. Additional working capital, which was
one of the objectives of the merger, is primarily needed to secure proper
financing from banks to allow the Company to actively pursue its identified
strategic markets. Under present borrowing arrangements with NDCA's primary
bank, Netzler & Dahlgren Co AB has provided an irrevocable Letter of Credit of
$450,000, in order for the Company to retain its line of credit. Netzler &
Dahlgren subsequent to year end extended the irrevocable Letter of Credit to the
end of February 2001.

STRATEGY DIVERSIFICATION: The Company is continuing to pursue a strategy of
diversification to explore various ways to increase revenues and minimize
losses. These approaches include the following :

o   Establish and develop strategic alliances with selected customers

o   Pursue AGV system business in selected market niches

o   Grow the distribution business by adding supplementary products

o   Expand the aftermarket sales business

      Positive results from this diversification in terms of new business and
increased bookings and backlog have been noted, and the Company intends to
continue this strategy actively. However, there can be no assurance that these
approaches will continue to be successful.

                                       6
<PAGE>

     HARCON AGREEMENT AND NEW ORDERS: On January 27, 1999 the Company signed an
agreement with Harcon Engineering, Inc. ("Harcon") of Roseville, Michigan with
the objective of jointly pursuing material handling systems projects, primarily
in the automotive industry. The Company received in January 1999 an order from
Harcon for the design phase of a major laser guided AGV system to be installed
at a new DaimlerChrysler facility in the Detroit area. The design phase order
together with manufacturing orders received in May of 1999 in connection with
the project significantly increased the Company's revenues in 1999.


       ENTERTAINMENT INDUSTRY AND POWERWAY PRODUCTS: The Company received during
the second quarter an order of approximately $130,000 for its Powerway products
from a major entertainment customer. The order was important to the Company
because it was the first significant order for the Powerway product line. The
Powerway line was introduced as part of the Company's strategy to expand its
distribution revenues and profitability. This same major entertainment customer
ordered a pilot project involving the Company's AGV technology for a site
outside North America . As part of this project the Company received an order in
excess of $500,000 for Schabmuler drives and Powerway products. Although the
Company does not generate revenues from NDC products utilized from projects
outside its territory (such sales per the Master License Agreement are handled
by Netzler & Dahlgren or their licensees) these projects may provide significant
opportunities for the Company should similar projects be pursued in North
America.

       RAYMOND CORPORATION: In December, 1999, negotiations were finalized with
the Raymond Corporation, a leading manufacturer of industrial trucks ( "forklift
trucks"), with regard to a co-operation agreement whereby the Company assumes
the responsibility for Raymond's installed base of AGV systems in North America.
The Agreement will be implemented during the first quarter of Fiscal year 2000.

      YEAR 2000: The Company successfully installed new hardware and software
for its operations during 1999 and incurred no problems relating to the date
change in the new millennium. The Company also experienced no Y2K related
problems with its products supplied to customers.

      FORWARD-LOOKING STATEMENTS: This report (including information included or
incorporated by reference herein) contains certain forward-looking statements
with respect to the financial condition, results of operation, plans,
objectives, future performance and business of the Company.

      These forward-looking statements involve certain risk and uncertainties.
Factors that may cause actual results to differ materially from those
contemplated by such forward-looking statements include, among others, the
following possibilities:

a)  Revenues from end user systems sales, new OEMs and new niches may be lower
    than expected or delayed.

b)  New product lines of the Company (Thrige, Netzler & Dahlgren (Teach-in),
    Powerway) may not be well received in the North American industrial truck
    market or AGV market, thereby restricting growth opportunities for the
    Company.

c)  The Company might be unable to raise the additional working capital needed,
    directly or through a business combination, to finance the current business
    strategy, which would have a serious impact on the Company's ability to sell
    its current and future products, as well as to satisfy existing banking
    requirements.

d)  General economic or business conditions, either nationally or in the markets
    in which the Company is doing business, may be less favorable than expected
    resulting in, among other things, a deterioration of market share or reduced
    demand for its products.

                                       7
<PAGE>
                      MANAGEMENT'S DISCUSSION AND ANALYSIS

================================================================================

RESULTS OF OPERATIONS

     The table below shows the relationship of income and expense items relative
to net revenues for the fiscal years ended November 30, 1999, 1998 and 1997,
respectively.
<TABLE>
<CAPTION>
                                                                                           Percentage of Change
                                                                                             Period to Period
                                                  Percentage of net Revenues                Increase (Decrease)
----------------------------------------------------------------------------------------------------------------------
                                                                                      Year Ended       Year Ended
                                                        For year Ended                 November 30,    November 30,
                                                 1999        1998        1997         1998 to 1999     1997 to 1998
----------------------------------------------------------------------------------------------------------------------
<S>                                             <C>         <C>          <C>                <C>               <C>
Net Revenues                                     100.0  %    100.0  %     100.0 %        44.9   %        (1.5) %
Cost of  goods sold                               62.1        59.5         66.1          51.4           (11.4)
----------------------------------------------------------------------------------------------------------------------

Gross profit                                      37.9        40.5         33.9          35.3            17.9

Operating expenses:
   Selling                                        12.4        16.5         17.0           9.1            (4.4)
   General and administrative                     21.0        24.8         38.1          22.6           (35.8)
----------------------------------------------------------------------------------------------------------------------

                                                  33.4        41.3         55.1          17.2           (26.1)
----------------------------------------------------------------------------------------------------------------------

Operating income (loss)                            4.4        (0.8)       (21.2)            *           (96.4)
Net interest expense                              (4.1)        6.1          4.8          (2.8)           25.0
----------------------------------------------------------------------------------------------------------------------

Income (loss) before income
taxes (benefit)                                     .3        (6.9)       (26.0)            *           (73.9)
Income Tax (benefit)                                 -           -            -             -               -
----------------------------------------------------------------------------------------------------------------------

Net income (loss)                                   .3 %      (6.9) %     (26.0) %          *           (73.9) %
======================================================================================================================
*   Because the data changes from negative to positive, or from positive to
    negative, the percentage of change is not meaningful.
</TABLE>
                                       8
<PAGE>
                      MANAGEMENT'S DISCUSSION AND ANALYSIS

================================================================================

FISCAL YEAR ENDED NOVEMBER 30, 1999 COMPARED TO FISCAL YEAR ENDED NOVEMBER 30,
1998.

     Net revenues in 1999 increased significantly compared to the prior year.
Revenues increased by $1,802,524 or 44.9%, from $4,015,698 for the fiscal year
ended November 30, 1998 to $5,818,222 for the fiscal year ended November 30,
1999. The Company's strategy to increase revenues by selectively selling turnkey
systems to end users and system integrators in September of 1997 accounted for
the majority of the increase in revenues in 1999. The large order received from
the automotive market through Harcon was the primary reason for the increased
systems revenues. The Company also continued to aggressively pursue distribution
of new products and technology in 1999 to the AGVS market to increase its
revenues. The Company received two major orders from the entertainment industry
for its Motor-In-Wheel-Drive units, batteries and chargers which represented
approximately $450,000 in revenues in 1999. The Company will continue to focus
on increasing revenues in 2000 by providing more turnkey systems when
appropriate and expanding its existing product line.

     Cost of goods sold increased from $2,387,342 to $3,614,922, or 51.4%, due
primarily to the increased revenues. As a percentage of net revenues, cost of
goods sold increased to 62.1% compared to 59.5% the prior year. The primary
reason for the increase is the Company experienced lower margins on engineering
revenues. Margins on turnkey systems are generally lower than distribution
revenues. Gross profit increased by $574,944, or 35.3%, from $1,628,356 to
$2,203,300.

     Selling expenses increased from $662,780 to $723,162, or 9.1% due primarily
to increased travel, advertising and marketing expenses. General and
administrative expenses increased by $225,482 from $996,994 to $1,222,476, or
22.6%. The increase compared to the prior year was primarily due to the
following 1) an unusual expense of $67,000 relating to the terminated merger
with Portec 2) increased incentive to the officers of approximately $40,000, 3)
rent cost increases due to a new test facility of approximately $25,000 4) Y2K
related expense of approximately $20,000 and 5) increased expenses in
recruiting, training, personnel and other general expenses.

     Primarily as a result of the foregoing, the operating results improved by
$289,080 from an operating loss of $31,418 to an operating income of $257,662
for the current year.

     Net interest expense decreased from $244,865 to $237,909, a decrease of
2.8%.

     Primarily as a result of the foregoing, the net results improved by
$296,036 from a net loss of $276,283 to a net income of $19,753.

BACKLOG

     Backlog consists of all amounts contracted to be paid by customers but not
yet recognized as net revenues by the Company. At November 30, 1999, the Company
had a backlog of approximately $1,650,000 compared to approximately $780,000 one
year earlier.

                                       9
<PAGE>
                      MANAGEMENT'S DISCUSSION AND ANALYSIS

================================================================================

FISCAL YEAR ENDED NOVEMBER 30, 1998 COMPARED TO FISCAL YEAR ENDED NOVEMBER 30,
1997.

     Net revenues in 1998 did not change significantly compared to the prior
year. Revenues decreased by $61,199 or 1.5%, from $4,076,897 for the fiscal year
ended November 30, 1997 to $4,015,698 for the fiscal year ended November 30,
1998. The Company's strategy to increase revenues by selectively selling turnkey
systems to end users and system integrators in September of 1997 did not
generate significant revenues in 1998, but resulted in an expansion of its
customer base and markets. Orders were received in 1998 from such industries as
entertainment, automotive, postal service and airport security, some of which
were new to the Company. The Company's strategy to align itself with Munck
Automation, Inc. ("Munck") did not generate the projected business volume from
Munck. Munck was acquired by Swisslog Management Ltd. headquartered in Aurau,
Switzerland, a world leader in material handling equipment and solutions. In
December 1998 the Company terminated its strategic alliance agreement with Munck
in order to facilitate negotiations of a new agreement more consistent with the
future direction of both companies. The Company also aggressively pursued
distribution of new products and technology in 1998 to the AGVS market to
increase revenues. The primary products were motors for industrial truck
manufacturers and batteries and chargers for the AGV market. Such new products
did produce interest in the marketplace but did not result in significant
revenues for the Company in 1998.

     Cost of goods sold decreased from $2,695,289 to $2,387,342, or 11.4%, due
primarily to the lower engineering cost. As a percentage of net revenues, cost
of goods sold decreased to 59.5% compared to 66.1% the prior year. The primary
reason for the decrease is the Company experienced higher margins on revenues
related to its aftermarket and engineering revenues. Gross profit increased by
$246,748, or 17.9%, from $1,381,608 to $1,628,356 due to the same factors.


     Selling expenses decreased from $693,106 to $662,780, or 4.4% due primarily
to lower advertising and marketing expenses. General and administrative expenses
decreased from $1,552,900 to $996,994, or 35.8% primarily due to lower cost
related to depreciation, amortization of intangibles in 1998 compared to 1997.
The Company also did not write down any intangibles in 1998 compared to a write
down of $52,394 in 1997. Lower equipment leases cost, and general cost reduction
relating to a cutback in personnel in May of 1998 contributed to lower general
and administrative expenses compared to the prior year.

     Primarily as a result of the foregoing, the operating loss decreased by
$832,980 or 96.4%, from $864,398 in 1997 to an operating loss of $31,418 for
1998.

     Net interest expense increased from $195,962 to $244,865, an increase of
25.0%. The increase is primarily due to increased borrowings relating to a two
year term loan from Netzler and Dahlgren.

     Primarily as a result of the foregoing, the net loss decreased by $784,077
or 73.9%, from $1,060,360 in 1997 to a net loss of $276,283 in 1998.

                                       10
<PAGE>
                      MANAGEMENT'S DISCUSSION AND ANALYSIS

================================================================================

LIQUIDITY AND CAPITAL RESOURCES

The Company experiences needs for external sources of financing to support its
working capital, capital expenditures and acquisition requirements when such
requirements exceed its cash generated from operations in any particular fiscal
period. The amount and timing of external financing requirements depend
significantly upon the nature, size, number and timing of projects and
contractual billing arrangements with customers relating to project milestones.
The Company has relied upon bank financing under a revolving working capital
facility, long-term debt, capital leases and proceeds of its public and private
offerings, to satisfy its external financing needs.

During the year ended November 30, 1999 net cash provided from operating
activities was $395,332. However, as of November 30, 1999 the Company had been
delaying payments of approximately $200,000 in trade payables to Netzler &
Dahlgren due to cash not being available under the current line of credit.

During the third quarter the Company's working capital decreased by $1,070,046
to a deficit of $904,987 on August 31, 1999 compared to a working capital of
$165,059 on May 31,1999. The large decline in the Company's working capital was
the result of the Company's mortgage becoming a current liability in June of
1999 (see Note 4 of the Company's Financial Statements). The Company's working
capital deficit at year end was $560,625 compared to $563,725 in 1999.

The Company entered into an Inventory and Accounts Receivable Loan and Security
Agreement ("Loan Agreement") on February 28, 1997 with the National Bank of
Canada and National Canada Business Corp. (herein collectively called the
"Lender"). The Loan Agreement was amended and restated on April 30, 1999 and
allows the Company to borrow up to a maximum of $1,250,000. Loans made under the
new Loan Agreement are evidenced by a demand promissory Note. The Loan Agreement
allows the Company to borrow pursuant to a borrowing formula which is secured by
the Company's personal property as collateral. The Company's outstanding loan
amount at any one time shall not exceed the lesser of (a) U.S $1,250,000 or (b)
80% of i) Qualified Accounts receivable (as defined in the Loan Agreement) that
are non-project Qualified Accounts and ii) Qualified Accounts that are project
Qualified Accounts plus 50% of all eligible inventory ( as defined in the Loan
Agreement) , but in no event shall (A) Inventory Value be in excess of $300,000
and (B) Inventory Value and Qualified Accounts that are project Qualified
Accounts be in excess of $450,000. The borrowed funds will bear interest at the
Lender's prime rate plus 2.75% per annum. The Loan Agreement is further secured
by 1) an Inventory Repurchase Agreement and 2) a $450,000 irrevocable Letter of
Credit issued by a Swedish bank. Netzler & Dahlgren Co. AB (NDCab) is obligated
to repay the letter of credit bank any funds it disburses under the Letter of
Credit. The Company is ultimately responsible to repay to NDCab for any amounts
it pays in reimbursing the letter of credit bank. The Repurchase Agreement
guarantees that NDCab will repurchase from the Company on certain conditions up
to $300,000 worth of inventory, thereby providing funds to pay the Lender should
the Company default on its loan obligations.

The lender, at its discretion, may demand payment upon written notice to the
Company. The maturity date has been extended to January 31, 2001, or upon demand
by the Bank. The extension was approved when Netzler & Dahlgren extended its
$450,000 irrevocable Letter of Credit to the Bank through February 28, 2001. To
further secure Netzler & Dahlgren for providing the Letter of Credit the Company
entered into a Reimbursement Agreement under which the Company granted to
Netzler and Dahlgren a security interest in the Company's land and building;
such collateral is a junior lien to the primary mortgage lender's security
interest.

The Company's strategy depends heavily on securing project business to grow.
Such business is traditionally not financed by the banking community due to
perceived risk associated with such jobs. In addition, in 1999 the Company was
informed by the lender that unless the Company's assets or equity were
significantly higher and the Company could show consistent earnings that such
project receivable financing would not be readily available. Under the present
banking relationship the Company can realistically only borrow approximately
$250,000 for such project receivables when the availability needed for inventory
is taken into account. At the end of November 1999 the Company had approximately
$1,100,000 of such project receivables which could not be fully utilized by the
present borrowing formulae. By not being able to fully utilize its project
assets for the line of credit, the Company experiences negative

                                       11
<PAGE>
cash flows until such cash is received from the customer. Due to the above
factors the Company delayed payments of approximately $200,000 to its affiliate
Netzler & Dahlgren so not to exceed current borrowing maximums from the demand
promissory note. Such past due payable is accruing interest at 16% per annum.
The Company was current at November 30, 1999 on the Note payable to Netzler &
Dahlgren.

The Company had difficulty obtaining an adequate line of credit to meet its
operating needs due to the poor results of the 1997 and 1998 and the Company's
low equity position. Bank relations have improved especially since the new
bookings received during the second quarter, and the positive results of 1999,
but the banks are still very cautious. This was evidenced by short extensions of
credits, increased interest rates and the continued requirement to have
guarantees from Netzler & Dahlgren. One of the primary reasons for the merger
with Portec was to provide adequate financing for the continued operations of
the Company. When the merger was terminated, Netzler & Dahlgren extended its
letter of credit to the bank to February 2001. The last quarter results
considerably improved the financial condition compared to the end of the third
quarter, Netzler & Dahlgren , however, must continue to accept delayed payments
from the Company. Netzler & Dahlgren presently does not have the financial
resources to properly finance the growth of the Company under the current
strategy.

The Company had been exploring the possibility of raising additional equity
capital, or subordinated debt, either directly or possibly through a business
combination, in order to improve its financial position, its independence and
have the working capital to address potential growth opportunities. Management
currently believes that its present working capital needs are close to or
greater than $1.5 million. The Company will continue to pursue equity and/or
debt financing, unless revenues that can be financed by the banking community
increase substantially to consistently provide earnings for the Company. There
can be no assurance that the Company will be successful in raising the
additional capital or subordinated debt to improve its financial position

During May 1999, the mortgage loan maturity date was extended for thirteen
months from May 16, 1999 to June 16, 2000. The interest rate on the note
remained at 9.5%, and the combined principal and interest monthly payment of
$13,912 was also unchanged. The Company has made all payments on a timely basis
on the mortgage.

                                       12
<PAGE>
                                                    Independent Auditor's Report


To the Board of Directors
NDC Automation, Inc.

Charlotte, North Carolina

We have audited the accompanying balance sheets of NDC Automation, Inc. as of
November 30, 1999 and 1998, and the related statements of operations,
stockholders' equity, and cash flows for each of the three years in the period
ended November 30, 1999. 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 audit provides 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 NDC Automation, Inc. as of
November 30, 1999 and 1998, and the results of its operations and its cash flows
for each of the three years in the period ended November 30, 1999 in conformity
with generally accepted accounting principles.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern.  As discussed in Note 14 to the
financial statements, there is substantial doubt about the Company's ability to
continue as a going concern. Management's plans in regard to these matters are
also described in Note 14. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.


                                                         McGLADREY & PULLEN, LLP

Charlotte, North Carolina
January 14, 2000, except for the last
sentence of the second paragraph of
Note 4, as to which the date is February 22, 2000

                                       13
<PAGE>
                                 BALANCE SHEETS
<TABLE>
<CAPTION>
=====================================================================================================================

                                                                                      November 30,
                                                                                 1999              1998
---------------------------------------------------------------------------------------------------------------------

      ASSETS (Note 4)

CURRENT ASSETS
<S>                                                                                 <C>               <C>
     Cash and cash equivalents (Note 12)                                            $ 45,240          $ 62,923
     Accounts receivable, net (Notes 2 and 5)                                      1,882,293           805,891
     Inventories (Note 8)                                                            366,365           593,794
     Costs and estimated earnings in excess of
            billings on uncompleted contracts (Note 3)                                35,024           136,547
     Prepaid expenses and other assets                                                51,592            47,583
---------------------------------------------------------------------------------------------------------------------
              Total current assets                                               $ 2,380,514       $ 1,646,738
---------------------------------------------------------------------------------------------------------------------

PROPERTY AND EQUIPMENT
      Land                                                                         $ 300,000         $ 300,000
      Building and improvements                                                    1,126,623         1,126,623
      Furniture, fixtures, and office equipment                                      168,505           138,746
      Machinery and equipment                                                         63,415            59,325
---------------------------------------------------------------------------------------------------------------------
                                                                                 $ 1,658,543       $ 1,624,694
       Less accumulated depreciation                                                 646,867           564,782

---------------------------------------------------------------------------------------------------------------------
                                                                                 $ 1,011,676       $ 1,059,912

---------------------------------------------------------------------------------------------------------------------
                                                                                 $ 3,392,190       $ 2,706,650
=====================================================================================================================
</TABLE>
See Notes to Financial Statements

                                       14
<PAGE>
                                 BALANCE SHEETS
<TABLE>
<CAPTION>
=====================================================================================================================

                                                                                      November 30,
                                                                                  1999              1998
---------------------------------------------------------------------------------------------------------------------

      LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
<S>                                                                                 <C>              <C>
     Note payable, bank (Note 4)                                                    $ 168,153        $ 346,657
     Current maturities of long- term debt (Note 4)                                 1,087,740        1,239,472
     Accounts payable and accrued expenses;
             including affiliates $416,581 at 1999
             and $169,837 at 1998 (Note 8)                                          1,475,974          508,002
     Billings in excess of costs and estimated
              earnings on uncompleted contracts (Note 3)                              209,272          116,332

---------------------------------------------------------------------------------------------------------------------
              Total current liabilities                                           $ 2,941,139      $ 2,210,463
---------------------------------------------------------------------------------------------------------------------
LONG-TERM DEBT (Note 4)                                                                   $ -        $ 114,889
---------------------------------------------------------------------------------------------------------------------

COMMITMENTS AND CONTINGENCIES (Note  9 )

STOCKHOLDERS' EQUITY (Notes 10 and 11)
       Preferred stock, par value $.01 per share
             authorized 1,000,000 shares; no shares issued                                $ -              $ -
       Common stock, par value $.01 per share;
                11,000,000 shares authorized
                at 1999 and 1998; 3,586,451 shares
                and 3,453,551 were issued at 1999
                and 1998, respectively                                                 35,864           34,534
       Additional paid-in capital                                                   4,260,236        4,211,566
       Accumulated deficit                                                         (3,845,049)      (3,864,803)
---------------------------------------------------------------------------------------------------------------------
                                                                                    $ 451,051        $ 381,297

---------------------------------------------------------------------------------------------------------------------
                                                                                  $ 3,392,190      $ 2,706,649
=====================================================================================================================
</TABLE>

                                       15
<PAGE>
                            STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
======================================================================================================================

                                                                               Years ended November 30,
                                                                       1999              1998              1997
----------------------------------------------------------------------------------------------------------------------
<S>                                                                    <C>               <C>              <C>
Net revenues (Notes 5 and 8)                                           $ 5,818,222       $ 4,015,698      $ 4,076,897
Cost of goods sold (Note 8)                                              3,614,922         2,387,342        2,695,289
----------------------------------------------------------------------------------------------------------------------
    Gross profit                                                       $ 2,203,300       $ 1,628,356      $ 1,381,608
----------------------------------------------------------------------------------------------------------------------

Operating expenses:
      Selling                                                            $ 723,162         $ 662,780        $ 693,106
      General and administrative (Note 9)                                1,222,476           996,994        1,552,900
----------------------------------------------------------------------------------------------------------------------
                                                                       $ 1,945,638       $ 1,659,774      $ 2,246,006
----------------------------------------------------------------------------------------------------------------------
            Operating income (loss)                                      $ 257,662         $ (31,418)      $ (864,398)
----------------------------------------------------------------------------------------------------------------------

Net interest expense (Note 8):                                          $ (237,909)       $ (244,865)      $ (195,962)
----------------------------------------------------------------------------------------------------------------------

Income (loss) before income taxes                                         $ 19,753        $ (276,283)    $ (1,060,360)

Federal and state income taxes (benefit) (Note 6)                                -                 -                -
----------------------------------------------------------------------------------------------------------------------
           Net income (loss)                                              $ 19,753        $ (276,283)    $ (1,060,360)
======================================================================================================================

Basic and diluted earnings (loss) per share                                  $ .01            $ (.08)          $ (.31)
======================================================================================================================

Weighted average common shares outstanding                               3,458,552         3,453,451        3,453,451
======================================================================================================================

Dividends per common share                                                     $ -               $ -              $ -
======================================================================================================================
</TABLE>
See Notes to Financial Statements

                                       16
<PAGE>
                       STATEMENTS OF STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
====================================================================================================================================

                                                                                 Years Ended November 30,
------------------------------------------------------------------------------------------------------------------------------------
                                                           1999                          1998                         1997
                                                  AMOUNT         SHARES          Amount       Shares         Amount          Shares
                                                  ------         ------          ------       ------         ------          ------
COMMON STOCK:
<S>                                              <C>          <C>               <C>           <C>             <C>          <C>
        Balance, beginning                       $ 34,534     3,453,451         $ 34,534      3,453,451       $ 34,534     3,453,451
        Stock options exercised (Note 11)               -             -                -              -              -             -
        Issuance of common stock (Note 10)          1,330       133,000                -              -              -             -
------------------------------------------------------------------------------------------------------------------------------------
        Balance, ending                            35,864     3,586,451         $ 34,534      3,453,451       $ 34,534     3,453,451
====================================================================================================================================

ADDITIONAL PAID-IN CAPITAL:
       Balance, beginning                      $4,211,566                    $ 4,211,566                   $ 4,211,566
       Stock options exercised (Note 11)                -                              -                             -
       Issuance of common stock (Note 10)        $ 48,670                              -                             -
------------------------------------------------------------------------------------------------------------------------------------
       Balance, ending                         $4,260,236                    $ 4,211,566                   $ 4,211,566
====================================================================================================================================

ACCUMULATED DEFICIT:
       Beginning deficit                     $ (3,864,802)                   $(3,588,519)                 $ (2,528,159)
       Net income (loss)                           19,753                       (276,283)                   (1,060,360)
------------------------------------------------------------------------------------------------------------------------------------
       Ending deficit                        $ (3,845,049)                   $(3,864,802)                 $ (3,588,519)
====================================================================================================================================


------------------------------------------------------------------------------------------------------------------------------------
Stockholders' Equity at November 30             $ 451,051     3,586,451        $ 381,298      3,453,451      $ 657,581     3,453,451
====================================================================================================================================
</TABLE>
See Notes to Financial Statements

                                       17
<PAGE>
                            STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
======================================================================================================================

                                                                                      Years ended November 30,
                                                                                1999            1998            1997
----------------------------------------------------------------------------------------------------------------------

CASH FLOWS FROM OPERATING ACTIVITIES
<S>                                                                           <C>           <C>          <C>
         Net income (loss)                                                    $ 19,753      $ (276,283)  $ (1,060,360)
         Adjustments to reconcile net income (loss) to net
             cash provided by (used in) operating activities:
            Depreciation                                                        82,085          82,825        114,564
            Amortization                                                             -               -         89,818
            Increase (decrease) in provision for doubtful accounts                   -          (5,000)        26,281
            (Gain) loss  on sale of property and equipment                           -          (1,637)        26,027
            Write-off of intangibles                                                 -               -         52,394
            Loss (gain) on foreign currency exchange rate                      (15,959)         (7,715)         3,652
        Change in assets and liabilities:
            (Increase) decrease in accounts receivable                      (1,076,402)       (130,402)       829,620
            Decrease in inventories                                            227,429         220,071        312,533
            (Increase) decrease in costs and estimated earnings in
                excess of billings on uncompleted contracts                    101,523        (113,141)        25,871
            (Increase) decrease in prepaid expenses
                and other assets                                                (4,009)            243          4,109
            (Increase) decrease in other assets                                      -               -         21,281
            Decrease (increase) in accounts payable
                and accrued expenses                                           967,972         (27,199)      (167,104)
            Increase (decrease) in billings in excess of costs and
               estimated earnings on uncompleted contracts                      92,940          86,494        (88,819)
----------------------------------------------------------------------------------------------------------------------
            NET CASH PROVIDED BY (USED IN)
                OPERATING ACTIVITIES                                         $ 395,332      $ (171,744)     $ 189,867
----------------------------------------------------------------------------------------------------------------------

CASH FLOWS FROM INVESTING ACTIVITIES
        Proceeds from the sale of property and equipment                           $ -         $ 2,142        $ 6,535
        Purchase of property and equipment                                     (33,849)        (13,865)       (36,703)
----------------------------------------------------------------------------------------------------------------------
            NET CASH  USED IN
                 INVESTING ACTIVITIES                                        $ (33,849)      $ (11,723)     $ (30,168)
----------------------------------------------------------------------------------------------------------------------
</TABLE>
See Notes to Financial Statements

                                       18
<PAGE>
                            STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
======================================================================================================================

                                                                                      Years ended November 30,
                                                                                1999            1998            1997
-----------------------------------------------------------------------------------------------------------------------
<S>                                                                               <C>           <C>            <C>
CASH FLOW FROM FINANCING ACTIVITIES
        Net borrowings (payments) on revolving credit  agreement             $ (178,504)      $ (80,977)    $ (419,583)
        Proceeds from current and long-term borrowings                                -         402,183              -
        Principle payments on long-term borrowings                             (266,621)       (154,899)       (63,597)
        Net proceeds  from common stock issued                                   50,000               -              -
-----------------------------------------------------------------------------------------------------------------------

            NET CASH  PROVIDED BY (USED IN)
                 FINANCING ACTIVITIES                                        $ (395,125)      $ 166,307     $ (483,180)
-----------------------------------------------------------------------------------------------------------------------
       Effect of foreign currencies exchange rate changes
          on cash and cash equivalents                                         $ 15,959         $ 7,715       $ (3,652)
-----------------------------------------------------------------------------------------------------------------------
       Decrease in cash and cash equivalents                                  $ (17,683)       $ (9,445)    $ (327,133)

      Cash and cash equivalents:

           Beginning                                                             62,923          72,368        399,501
-----------------------------------------------------------------------------------------------------------------------
           Ending                                                              $ 45,240        $ 62,923       $ 72,368
=======================================================================================================================

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
       Cash payments for :
           Interest                                                           $ 233,533       $ 244,828      $ 204,684
</TABLE>
                                       19
<PAGE>
                          NOTES TO FINANCIAL STATEMENTS

================================================================================

NOTE 1.  NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

NATURE OF BUSINESS:

The Company was formed to acquire, develop, market, and sell hardware, software
and engineering services that are incorporated into and used to control
automatic guided vehicle systems ("AGVS"). The Company markets its products and
services to designers of integrated automation systems, original equipment
manufacturers, and end users primarily within the North American continent.

A summary of the Company's significant accounting policies follows:

REVENUE RECOGNITION:

The Company recognizes revenue from the sales of commercial products as
shipments are made.

The Company recognizes revenues under long-term contracts on the percentage of
completion method, measured by the percentage of each component cost incurred to
date to estimated total component contract costs for each component in the
contract. Component costs include material, direct labor, subcontracts,
engineering overhead, and miscellaneous costs. Provisions for estimated losses
are made in the period in which they first become determinable.

"Costs and estimated earnings in excess of billings on uncompleted contracts"
represent revenue recognized in excess of amounts billed. "Billings in excess of
costs and estimated earnings on uncompleted contracts" represent billings in
excess of revenues recognized.

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 the 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 these estimates.

CASH AND CASH EQUIVALENTS:

For purposes of reporting the statements of cash flows, the Company considers
all cash accounts (see Note 12), and all highly liquid debt instruments
purchased with a maturity of three months or less, to be cash equivalents. The
Company maintains demand deposits with a financial institution which are in
excess of the federally insured amount.

INVENTORIES:

The inventories are priced at the lower of cost or market, with cost being
determined by the weighted average method. Inventories consist primarily of
parts for computerized material handling systems purchased from the affiliate
Netzler & Dahlgren and motor-in-wheel drive units purchased from Schabmuller
GMBH.

                                       20
<PAGE>
                          NOTES TO FINANCIAL STATEMENTS

================================================================================

NOTE 1.  NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

PROPERTY AND EQUIPMENT:

Property and equipment is stated at cost. Depreciation and amortization are
primarily computed using the straight-line method over the following useful
lives:
                                                                  Years
                                                                  -----

          Building and improvements                               21-28
          Furniture, fixtures and office equipment                  4-7
          Machinery and equipment                                   3-5
          Vehicles                                                  3-5


FOREIGN CURRENCY TRANSLATION:

Payables to foreign companies that are denominated in foreign currencies are
translated at rates that approximate the year-end foreign exchange rates.
Resultant gains or losses are reflected in cost of goods sold. The costs of
items of foreign origin which are included in inventory have been translated at
historical exchange rates prevailing at the date of acquisition.


INCOME TAXES:

Provisions for income taxes are provided on a liability method whereby deferred
tax assets are recognized for deductible temporary differences, operating
losses, and tax credit carryforwards, and deferred tax liabilities are
recognized for taxable temporary differences. Temporary differences are the
differences between the reported amounts of assets and liabilities and their tax
bases. Deferred tax assets are reduced by a valuation allowance when, in the
opinion of management, it is more likely than not that some portion or all of
the deferred tax assets will not be realized. Deferred tax assets and
liabilities are adjusted for the effects of changes in tax laws and rates on the
date of enactment.

                                       21
<PAGE>
                          NOTES TO FINANCIAL STATEMENTS

================================================================================

NOTE 1.  NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)


EARNINGS (LOSSES) PER COMMON SHARE:

The Company adopted Statement of Financial Accounting Standards No. 128 (SFAS
No.128) Earnings Per Share, which supersedes APB Opinion No. 15. SFAS No. 128
requires the presentation of earnings per share by all entities that have common
stock or potential common stock, such as options, warrants, and convertible
securities, outstanding that trade in a public market. Basic per share amounts
are computed, generally, by dividing net income or loss by the weighted-average
number of common shares outstanding. Diluted per share amounts assume the
conversion, exercise, or issuance of all potential common stock instruments
unless the effect is antidilutive, thereby reducing a loss or increasing the
income per common share. The Company initially applied Statement No. 128 for the
year ended November 30, 1998, and as required by the statement, has restated the
per share information for the the prior years to conform to the statement. As
described in Note 11, at November 30, 1999, 1998 and 1997 the Company had
options outstanding to purchase a total of 134,092, 81,777 and 146,833 shares of
common stock, respectively, at a weighted-average exercise price of varying
amounts. The inclusion of those potential common shares in the calculation of
diluted loss per share would have an antidilutive effect. Therefore, basic and
diluted loss per share amounts are the same in 1999, 1998 and 1997.


ADVERTISING:

The Company follows the policy of charging production cost of advertising to
expense as incurred. Advertising expenses for the years ending November 30,
1999, 1998 and 1997 were $21,759, $15,640, and $91,340 respectively.

                                       22
<PAGE>
                          NOTES TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
====================================================================================================================

NOTE 2. ACCOUNTS RECEIVABLE

Accounts receivable consist of the following at November 30, 1999 and 1998,
respectively:

                                                                                         1999               1998

----------------------------------------------------------------------------------------------------------------------
<S>                                                                                   <C>                  <C>
Trade and contract                                                                    $  1,926,825         $  850,336

Less: Allowance for doubtful accounts                                                      (50,000)           (50,000)
----------------------------------------------------------------------------------------------------------------------
                                                                                      $  1,876,825         $  800,336
Other                                                                                          364              1,847

Officers and employees                                                                       5,104              3,708
----------------------------------------------------------------------------------------------------------------------
                                                                                      $  1,882,293         $  805,891
======================================================================================================================

NOTE 3.  COSTS AND ESTIMATED EARNINGS ON UNCOMPLETED CONTRACTS

Costs and estimated earnings on uncompleted contracts consist of the following
at November 30, 1999 and 1998, respectively:
<CAPTION>
                                                                                         1999               1998

----------------------------------------------------------------------------------------------------------------------
<S>                                                                                   <C>                 <C>
Costs incurred on uncompleted contracts                                               $  1,524,468        $   591,370
Estimated earnings                                                                         699,610            232,273
----------------------------------------------------------------------------------------------------------------------
                                                                                      $  2,224,708        $   823,643
Less billings to date                                                                   (2,398,326)          (803,428)
----------------------------------------------------------------------------------------------------------------------

                                                                                     $  ( 174,148)         $   20,215
======================================================================================================================

Included in the accompanying balance sheets under the following captions:
<CAPTION>
                                                                                         1999               1998

----------------------------------------------------------------------------------------------------------------------
<S>                                                                                       <C>               <C>
Costs and estimated earnings in excess of billings
     on uncompleted contracts                                                           $   35,024        $   136,547
Billings in excess of costs and estimated earnings
     on uncompleted contracts                                                             (209,272)          (116,332)
----------------------------------------------------------------------------------------------------------------------

                                                                                      $  (174 ,148)        $   20,215
======================================================================================================================
</TABLE>

                                       23
<PAGE>
                          NOTES TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
===================================================================================================================
<S>                                                                                      <C>                <C>
NOTE 4.  PLEDGED ASSETS, NOTE PAYABLE, BANK AND LONG-TERM DEBT

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

Note Payable Agreement that allows the Company to borrow up to $1,250,000 and
bears interest at the lender's prime rate plus 2.75% per annum . The Company's
loan outstanding shall not exceed the lesser of (a) U.S. $1,250,000 or (b) 80%
of i) Qualified Accounts receivable (as defined in the Loan Agreement) that are
non-project Qualified Accounts and ii) Qualified Accounts that are project
Qualified Accounts (as defined in the Loan Agreement) plus 50% of all eligible
inventory, but in no event shall (A) Inventory Value be in excess of $300,000
and (B) Inventory Value and Qualified Accounts that are project Qualified
Accounts be in excess of $450,000. The loan agreement is further secured by 1)
an Inventory Repurchase Agreement and 2) a $450,000 irrevocable Letter of Credit
issued by a Swedish Bank. Netzler & Dahlgren Co. AB (NDCab) is obligated to
repay the letter of credit bank any funds it disburses under the Letter of
Credit. The Company is ultimately responsible to repay to NDCab any amounts it
pays in reimbursing the Letter of Credit Bank . The Repurchase Agreement
guarantees that NDCab will repurchase on certain conditions up to $300,000 worth
of inventory, thereby providing funds to pay lender should the Company be in
default on its loan obligations. The Loan Agreement terminates upon demand by
the Bank or January 31, 2001. (1)(2)                                                      $  168,153      $   346,657
======================================================================================================================
Long-term debt consists of the following :
----------------------------------------------------------------------------------------------------------------------

Mortgage note payable to a bank, based on a 9.5% fixed rate. Original principal
balance of $1,013,484 to be repaid in twelve (12) consecutive monthly principal
and interest payments of $13,912, with one final payment of Approximately
$939,666 due on June 16, 2000 . The note is collaterized by the Company's land
and building with a carrying value of $937,621. The loan also contains certain
financial covenants to which the Company must adhere. As of November 20, 1999,
the Company obtained waivers for certain financial covenants as specified by the
Mortgage note agreement.
                                                                                          $  977,846       $ 1,042,520

Note payable to Netzler & Dahlgren Co AB, based on a 16.0% fixed rate. Original
principal balance to be repaid in twenty-four (24) consecutive monthly principal
payments of 133,529 Swedih Krona, or approximately US$16,757 depending on the
exchange rate at time of payment, plus interest. The note is collaterized by the
Company's land and building with a carrying value of $937,621.
                                                                                             109,894          311,841
----------------------------------------------------------------------------------------------------------------------
Less current maturities:                                                                   1,087,740        1,239,472
----------------------------------------------------------------------------------------------------------------------
                                                                                            $      -        $  114,889
======================================================================================================================
(1) The prime rate at November 30, 1999 was 8.50% and 7.75% at November 30,
1998.
(2) The line of credit is secured by a first priority security interest in the
Company's accounts receivable, inventory, software and intangibles.

Maturities of long-term debt at November 30, 1999 are as follows:

Year Ending
November 30
----------------------------------------------------------------------------------------------------------------------
2000                                                                                                        $1,087,740
2001                                                                                                                -
----------------------------------------------------------------------------------------------------------------------
                                                                                                            $1,087,740
======================================================================================================================
</TABLE>

                                       24
<PAGE>
                          NOTES TO FINANCIAL STATEMENTS

================================================================================

NOTE 5.  MAJOR CUSTOMERS

Net revenues and accounts receivable as of and for the years ended November 30,
1999, 1998, and 1997, respectively, include sales to the following major
customers (each of which accounted for 10% or more of the total net revenues of
the Company for those years):

                                            Amount of Net Revenues
                                           Year Ended November 30,

CUSTOMER                             1999            1998            1997
-------------------------------------------------------------------------------

A                                   $ 1,410,915        $     *         $     *
B                                            *         482,826               *
C                                            *         457,365               *
D                                            *         488,603               *
E                                            *               *         612,226
F                                            *               *         590,588

                                             Accounts Receivable
                                                 November 30,

                                     1999            1998            1997
-------------------------------------------------------------------------------

A                                     $ 629,890        $     *         $     *
B                                            *          63,108               *
C                                            *         162,899               *
D                                            *           51,711              *
E                                            *               *          61,075
F                                            *               *         295,363

*Not a major customer.

                                       25
<PAGE>
                          NOTES TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
===================================================================================================================

NOTE 6.   INCOME TAXES

Income taxes (benefit) consist of the following components for the years ended
November 30, 1999, 1998, and 1997, respectively:
                                                                   1999                1998               1997
----------------------------------------------------------------------------------------------------------------------
<S>                                                           <C>                <C>                  <C>
Current                                                       $        -         $         -          $        -
Deferred                                                               -                   -                   -
----------------------------------------------------------------------------------------------------------------------
                                                              $        -         $         -          $        -
======================================================================================================================

Net deferred tax assets consist of the following components as of November 30,
1999 and 1998, respectively:

Deferred tax assets:
   Allowance for doubtful accounts                                                $   19,558              $     19,558
   Inventory valuation reserves                                                       27,381                    15,646
   Capitalized cost in ending inventory                                                3,857                     8,757
   Net operating loss carryforward                                                 1,480,171                 1,479,799
   General business credit carryforwards                                              45,367                    45,367
   Depreciation                                                                       20,257                    13,847
   Other reserves                                                                     12,838                    17,236
                                                                                           -                         -
----------------------------------------------------------------------------------------------------------------------
                                                                                  $1,609,429              $  1,600,210

   Less valuation allowance                                                        1,609,429                 1,600,210
----------------------------------------------------------------------------------------------------------------------

   Net deferred taxes                                                             $        -              $          -
======================================================================================================================

The changes in the valuation allowance for the years ended November 30, 1999,
1998 and 1997 were $9,219, $95,299 and $406,909, respectively. The valuation
reserve is the result of management's determination that the Company may not be
able to generate sufficient future taxable income to realize the recorded
deferred tax assets.

A reconciliation of the statutory income tax to the income tax expense (benefit)
included in the Statements of Operations is as follows:
<CAPTION>
                                                                 Years Ended November 30,
                                               1999                        1998                       1997
----------------------------------------------------------------------------------------------------------------------
                                                  % OF                        % of                        % of
                                     DOLLAR       PRE-TAX       Dollar        Pre-tax       Dollar        Pre-tax
                                     AMOUNT       INCOME        Amount        Income        Amount        Income
----------------------------------------------------------------------------------------------------------------------
<S>                                   <C>          <C>           <C>           <C>           <C>           <C>
Statutory federal income
  tax (benefit)                     6,716   $      34.0       $(93,936)      (34.0)        $(360,522)      (34.0)
Increase (decrease) in
taxes resulting from:
State income taxes                    988            5.0       (13,814)       (5.0)         (53,018)        (5.0)
Changes in valuation allowance     (9,219)         (46.7)       95,299        34.0          406,909         38.0
Other                               1,515            7.7        12,451         5.0            6,631          1.0
----------------------------------------------------------------------------------------------------------------------
                                  $     -              -       $     -           -          $     -            -
======================================================================================================================
</TABLE>
                                       26
<PAGE>
                          NOTES TO FINANCIAL STATEMENTS

================================================================================

NOTE 7.   401(K) PROFIT SHARING PLAN

The Company has a profit sharing plan, the contributions to which are
discretionary.

The Company established a 401(k) profit sharing plan to which both the Company
and eligible employees may contribute. The Company may, at its discretion, match
the participant's contribution quarterly, up to a maximum of $700 per plan year.
The Company's contribution for the years ended November 30, 1999, 1998 and 1997
amounted to $15,225, $13,587, and $17,340, respectively.

NOTE 8.   RELATED PARTY TRANSACTIONS

The Company is related to NDC, Netzler & Dahlgren Co. AB (Netzler & Dahlgren)
through common ownership .

Netzler & Dahlgren is the Company's largest supplier of AGVS control technology.
Accordingly, the Company's success is dependent upon its ability to obtain such
products on a timely basis. Although the Company has entered into a written
agreement with Netzler & Dahlgren for the supply of such products, there can be
no assurance that this company will continue to fulfill its obligations under
the agreement.

On November 30, 1995, the Company signed a ten (10) year master license
agreement with Netzler & Dahlgren to purchase certain products at stipulated
prices. The Master License Agreement provides for certain royalty payments based
on 10% of revenues on license fee contracts entered into after November 30,
1995.

On November 30, 1995 the Company sold certain intangibles related to its laser
technology and its stock in NDC Laser to Netzler & Dahlgren for $1,000,000. As
part of the sales price the Company receives contingent laser fees from Netzler
& Dahlgren for the years ending 1997 and 1998. For the year ending November 30,
1998 and 1997 the Company earned and netted against trade payables $59,250 and
$109,750 respectively, in laser fees from Netzler & Dahlgren.

The Company had the following transactions with Netzler & Dahlgren for the years
ended November 30, 1999, 1998, and 1997, respectively:
<TABLE>
<CAPTION>
                                                                   1999                1998               1997
----------------------------------------------------------------------------------------------------------------------
<S>                                                                 <C>                <C>                <C>
Revenues                                                            $   77,986         $   252,621        $   153,176
======================================================================================================================
Purchases of hardware, software & engineering services              $  844,414         $   490,656        $   689,059
======================================================================================================================
Interest expense                                                    $   70,178         $    76,499        $    17,968
======================================================================================================================
</TABLE>
There was no royalty expense for the three years ended November 30, 1999.

                                       27
<PAGE>
                          NOTES TO FINANCIAL STATEMENTS

================================================================================

NOTE 9.  COMMITMENTS

At November 30, 1999, the Company had no outstanding forward exchange contracts.
These contracts are purchased as needed from time to time to hedge identifiable
foreign currency commitments.

The Company leases property and equipment under long-term operating leases
expiring on various dates through August, 2001. In addition, the Company has
rental expenses for facilities rented on a short term basis and on a
month-to-month basis, such expenses were $38,610, $15,187, and $16,103 for the
years ended November 30, 1999, 1998, and 1997, respectively.

Minimum rental commitments under long-term operating leases at November 30, 1999
were as follows:

2000                        $  39,574
2001                           29,174
2002                           13,142
2003                              951
                     -----------------
                            $   82,841
                     =================


The Company has an employment contract with the Chief Operating Officer which
provides for a minimum annual base salary of $110,000. The base salary is
subject to annual reviews. The contract expires on March 1, 2002.

NOTE 10.  ISSUANCE OF COMMON STOCK

On November 15, 1999, the Company sold 113,000 shares of common stock, par value
$.01 per share in a private placement . The net proceeds to the Company from the
sale of the shares was $50,000. The Company applied the proceeds to working
capital needs and other general corporate needs.

                                       28
<PAGE>
                          NOTES TO FINANCIAL STATEMENTS

================================================================================

NOTE 11.  STOCK OPTION PLANS

The Company has adopted Statement of Financial Accounting Standards (`SFAS') No.
123, Accounting for Stock-Based Compensation. FASB Statement No.123, requires
that the Company account for its stock based compensation plans using a fair
value based method which measures compensation cost at the grant date based upon
the value of the awards, which is then recognized over the vesting period. The
accounting requirements of the statement apply to awards to employees entered
into fiscal years that begin after December 15, 1995 and to transactions with
non-employees entered into after December 15, 1995. The Statement allows and the
Company has elected to continue to use APB Opinion No. 25 Accounting for Stock
Issued to Employees to measure compensation cost, but is required to disclose
the pro forma effect on net income and earnings per share to reflect the
difference between the compensation cost from applying APB Opinion No. 25 and
the related cost measured by the fair value method defined in the statement for
all awards granted in years beginning after December 15, 1994. The Statement did
not change the reporting required for the Plans discussed below.

1990 AND 1993 STOCK OPTION PLANS:

On October 10, 1990, the Compensation Committee of the Board of Directors
adopted the NDC Automation, Inc. 1990 Stock Option Plan ("the 90 Plan"), the
adoption of which was ratified by the shareholders at the annual meeting held on
April 10, 1991. In September 1992, the Company registered up to 178,613 shares
of common stock for issuance. On October 23, 1993, the Compensation Committee of
the Board of Directors adopted the NDC Automation, Inc. 1993 Stock Option Plan
("the 93 Plan"), the adoption of which was ratified by the shareholders at the
annual meeting held on May 5, 1994.

Options to purchase 174,375 shares of common stock were granted pursuant to the
90 Plan and are available for exercise upon achievement by the Company of
certain financial performance targets set by the Board of Directors on an annual
basis. The options will be exercisable for a term of ten years, commencing on
the date of the grant at an exercise price of $.7917 to $1.56 for new employees.
The 93 Plan authorized 100,000 options to purchase common stock, of which
100,000 were granted and are available for exercise upon achievement by the
Company of certain financial performance targets set by the Board of Directors
on an annual basis. On October 24, 1994, the 93 Plan options were repriced with
approval by the Compensation Committee at an exercise price of $1.56.

Of the 274,375 total shares of common stock granted, the Compensation Committee
granted to the Company's current and former executive officers options to
purchase 120,375 shares of common stock at an exercise price of $.7917 for the
90 Plan, and 18,000 shares of common stock for the 93 Plan at an exercise price
of $1.56. The exercise price of the options granted is based on the average fair
market value of the common stock for the five business days preceding the date
of the grant.

1997 STOCK OPTION PLAN:

On December 7, 1996 , the Compensation Committee of the Board of Directors
adopted The NDC Automation, Inc. 1997 Stock Option Plan ("the 97 Plan"), the
adoption of which was ratified by the shareholders at the annual meeting held
April 25, 1997. The 97 Plan authorized 225,000 options to all officers and
employees in the form of incentive stock options, of which 210,000 were granted
in January 1997 at an exercise price of $0.50 per share upon achievement by the
Company of certain financial performance targets set by the Board of Directors
on an annual basis. No pro forma compensation expense has been disclosed due to
financial performance targets not being obtained in 1998 or 1997 and due to
uncertainty of financial performance targets being obtained prospectively.

                                       29
<PAGE>
                          NOTES TO FINANCIAL STATEMENTS

================================================================================

NOTE 11.  STOCK OPTION PLANS ( CONTINUED)


Transactions involving these plans for the years ended November 30, 1999, 1998
and 1997 respectively, are summarized as follows:
<TABLE>
<CAPTION>
STOCK OPTIONS                          1999*                                  1998*
---------------------------------------------------------------------------------------------------
                         90 PLAN  93 PLAN  97 PLAN    TOTAL      90 Plan  93 Plan   97 Plan  Total
                         -----------------------------------    ----------------------------------
<S>                   <C>         <C>       <C>       <C>         <C>       <C>     <C>       <C>
Outstanding, December 1  29,677   52,100   167,250 249,027       63,233    83,600 199,520  346,333
Granted                       -        -         -        -           -        -        -       -
Canceled                  (135)    (300)   (9,000)  (9,435)     (33,556) (31,500) (32,250) (97,306)
Exercised                     -        -         -        -           -        -        -       -
------------------------------------------------------------    ----------------------------------

Outstanding, November    29,542   51,800   158,250  239,592      29,677    52,100  167,250 249,027
30
============================================================    ==================================

Exercisable, November    29,542   51,800    52,750  134,092      29,677    52,100       -   81,777
30
============================================================    ==================================
<CAPTION>
STOCK OPTIONS                          1997*
------------------------------------------------------------
                         90 Plan  93 Plan  97 Plan    Total
                         -----------------------------------
<S>                   <C>         <C>        <C>       <C>
Outstanding, December 1  63,233   84,100            147,333
Granted                       -        -   210,000  210,000
Canceled                      -    (500)  (10,500)  (11,000)
Exercised                     -        -         -        -
------------------------------------------------------------

Outstanding, November    63,233   83,600   199,500  346,333
30
============================================================

Exercisable, November    63,233   83,600         -  146,833
30
============================================================
</TABLE>

* The weighted average exercise price per share of options outstanding, granted,
canceled, exercised, or exercisable for the 90 Plan is $0.7917, for the 93 Plan
is $1.56 and for the 97 Plan is $0.50.

                                       30
<PAGE>
                          NOTES TO FINANCIAL STATEMENTS

================================================================================


NOTE 12.  RESTRICTED CASH AND CREDIT RISK

Under the Company's line of credit agreement, the Company's cash disbursements
are controlled and approved by the bank. Cash received by the Company is
deposited into bank-monitored cash collateral accounts where cash funds are used
to pay down the bank line of credit. Daily cash operating requirements of the
Company are then funded through advances under the borrowing base formula of the
line of credit (see Note 4).


NOTE 13.  FASB AND PROPOSAL REGULATIONS

The FASB has issued SFAS No. 133, ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND
HEDGING ACTIVITIES, which the Company has not been required to adopt as of
November 30, 1999. This Statement, which is effective for fiscal years beginning
after June 15, 2000, establishes accounting and reporting standards for
derivative instruments, including certain derivative instruments embedded in
other contracts, (collectively referred to as derivatives) and for hedging
activities. It requires that an entity recognize all derivatives as either
assets or liabilities in the statement of financial position and measure those
instruments at fair value. If certain conditions are met, a derivative may be
specifically designated as (a) a hedge of the exposure to changes in the fair
value of a recognized asset or liability or an unrecognized firm commitment, (b)
a hedge of the exposure of variable cash flows of a forecasted transaction, or
(c) a hedge of the foreign currency exposure of a net investment in a foreign
operation, an unrecognized firm commitment, an available for sale security, or a
foreign currency denominated forecasted transaction. The statement is not
expected to have a significant impact on the Company.

NOTE 14.  CONTINUED OPERATIONS

The Company has historically suffered operating losses with a small net income
in 1999. This has left the Company with limited equity and negative working
capital. The Company is also not in compliance with convenants of certain debt
agreements. These issues raise substantial doubt about the Company's ability to
continue as a going concern.

Management has made plans in regards to these matters to develop an operating
plan that will increase revenues and minimize losses. This plan includes a
reorganization of present resources to support the following:

o  Establish and develop strategic alliances with selected customers
o  Pursue AGV system business in selected market niches
o  Grow the distribution business by adding new supplementary products
o  Expand the aftermarket sales business

The Company is also pursuing raising additional equity to assist in reaching its
goals.

Although the Company believes that its strategic plans will permit it to meet
its 2000 working capital needs, there can be no assurance that the Company can
successfully meet the objectives of such plans.

                                       31
<PAGE>
                             SHAREHOLDER INFORMATION
<TABLE>
<CAPTION>
====================================================================================================================================
<S>                                                                <C>
ANNUAL MEETING                                                 DIRECTORS
       The annual meeting will be held at 10:00 am, Friday,
       May 5, 2000, at NDC Automation's Corporate offices      Goran P.R. Netzler
       in Charlotte, North Carolina.                           Chairman of the Board of Directors, NDC Automation, Inc.
                                                               President
SHAREHOLDER RELATIONS                                          Netzler and Dahlgren Co. AB
       A COPY OF NDC'S ANNUAL REPORT AND FORM 10-KSB,
       WHICH IS FILED WITH THE SECURITIES AND EXCHANGE         Jan H.L. Jutander
       COMMISSION, WILL BE SENT TO ANY SHAREHOLDER UPON        Vice President, Operation
       WRITTEN REQUEST TO MANAGER-INVESTOR RELATIONS           Netzler and Dahlgren Co. AB
       NDC AUTOMATION, INC.,
       3101 LATROBE DRIVE                                      Richard D. Schofield
       CHARLOTTE, NORTH CAROLINA 28211-4849                    Director

CORPORATE OFFICES                                              Raymond O. Gibson
       NDC Automation, Inc.                                    VP Operations
       3101 Latrobe Drive                                      Terion, Inc.
       Charlotte, North Carolina 28211-4849

        (704) 362-1115 Telephone
        (704) 364-4039 Facsimile

STOCK EXCHANGE LISTINGS                                        OFFICERS
       Over the Counter: OTC Bulletin Board
       OTC Symbol: "AGVS"                                      Ralph Dollander
                                                               President and
TRANSFER AGENT                                                 Chief Executive Officer (prior to March 1, 2000)
       First Citizens bank
       Raleigh, North Carolina                                 Claude Imbleau
                                                               Chief Operating Officer
LEGAL COUNSEL                                                  Chief Financial Officer
       Parker, Poe, Adams and Bernstein, LLP
       Charlotte, North Carolina                               E. Thomas Watson
                                                               Secretary, NDC Automation, Inc.
       Shumaker, Loop and Kendrick, LLP                        Partner
       Charlotte, North Carolina                               Parker, Poe, Adams and Bernstein LLP

AUDITORS
       McGladrey & Pullen, LLP
       Charlotte, North Carolina
<CAPTION>
====================================================================================================================================

COMMON STOCK DATA
                                                                           Market Price Per Share
                                       ---------------------------------------------------------------------------------------------
                                          1999                                        -        1998
                                       -------------------------------------------           ---------------------------------------
Quarter Ended                                  High                 Low                         High                 Low
                                          Bid        Ask     Bid         Ask               Bid       Ask        Bid        Ask
------------------------------------------------------------------------------------------------------------------------------------
<S>                                      <C>        <C>      <C>         <C>               <C>        <C>        <C>         <C>
 February 28                             0.40       0.65     0.15        0.15              9/32       13/32      5/32        3/16
 May 31                                  0.79       0.90     0.31        0.53              11/32      7/16       9/32      11/32
 August 31                               0.72       0.88     0.22        0.38               .32       7/16       3/16       .24
 November 30                             0.63       0.88     0.26        0.34               .22       .28        .125       .14
====================================================================================================================================
</TABLE>