##### Table of Contents



SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-KSB
  þ
    
    Annual Report under Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the fiscal year ended November 30, 2005
 o
    
    Transition Report under Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the transition period from to
 Commission
file number 1-13484
 COHESANT TECHNOLOGIES INC.
  Delaware
(State or Other Jurisdiction
of Incorporation or Organization)
    
    34-1775913
(I.R.S. Employer
Identification No.)5845 West 82nd Street, Ste. 102, Indianapolis, Indiana
(Address of Principal Executive Offices)
Issuers Telephone Number, Including Area Code:
    
    46278
(Zip Code)
(317) 871-7611
   o
 þ o
 þ
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TABLE OF CONTENTS
 PAGEPART IItem 1. Description of Business
    
    3Item 2. Properties
    
    13Item 3. Legal Proceedings
    
    13Item 4. Submission of Matters to a vote of Security Holders
    
    13PART IIItem 5. Market for Registrants Common Equity and Related
Stockholders Matters
    
    13Item 6. Managements Discussion and Analysis of Financial
Condition and Results of Operations
    
    15Item 7. Financial Statements
    
    21Item 8. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure
    
    21Item 8A. Controls and Procedures
    
    21Item 8B. Other Information
    
    21PART IIIItem 9. Directors, Executive Officers, Promoters and
Control Persons; Compliance with Section 16(a)
    
    22Item 10. Executive Compensation
    
    23Item 11. Security Ownership of Certain Beneficial Owners
and Management
    
    25Item 12. Certain Relationships and Related Transactions
    
    26Item 13. Exhibits
    
    27Item 14. Principle Accounting Fees and Services
    
    28Index to Financial Statements
    
    F-1Signatures and ExhibitsEX-10.5 Amendment to Employment AgreementEX-10.6 Lease Agreement as AmendedEX-10.7 Amended and Restated Administrative Support AgreementEX-10.8 2005 Long-Term Incentive PlanEX-21 Subsidiaries of the RegistrantEX-23 Consent of Independent Registered Public Accounting FirmEX-31.1 302 Certification for CEOEX-31.2 302 Certification for CFOEX-32 906 Certification for CEO and CFO
  2




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FORWARD LOOKING STATEMENTS
  
 PART I
 
 ITEM 1. DESCRIPTION OF BUSINESS
     3




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nd www.cohesant.com
       4




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Narrative Description of Business
 PRODUCTS
 GlasCraft, Inc.
  5




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Fiberglass reinforced plastic dispense equipment systems.
  Polyurea and polyurethane coatings dispense equipment systems.
 Polyurethane foam dispense equipment systems.
 6




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Raven Lining Systems
  Raven Products
  AquataPoxy Products
 7




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CuraFlo Group
  Dealer Network.
 8




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Rehabilitation.
 MARKETING
 Distributors, Certified Applicators and Licensed Dealers
    9




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Brochures, Advertising and Trade Shows
  MANUFACTURING AND RAW MATERIALS SUPPLY
   COMPETITION
  10




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RESEARCH AND DEVELOPMENT
  GOVERNMENT REGULATION
 11
    Table of Contents      PATENTS, TRADEMARKS AND PROPRIETARY INFORMATION
  â â â â â â
  EMPLOYEES
 12
    Table of Contents  ITEM 2. PROPERTIES
  
 ITEM 3. LEGAL PROCEEDINGS
   
 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  
 PART II
 
 ITEM 5. MARKET FOR REGISTRANTS COMMON EQUITY AND RELATED STOCKHOLDERS MATTERS
 13
    Table of Contents  Bid PriceCommon Stock
    
    High
    
    LowYear Ended November 30, 2004First Quarter
    
    $
    7.63
    
    
    $
    5.75Second Quarter
    
    
    11.15
    
    
    
    6.20Third Quarter
    
    
    14.97
    
    
    
    6.95Fourth Quarter
    
    
    13.25
    
    
    
    8.88Year Ended November 30, 2005First Quarter
    
    $
    15.38
    
    
    $
    9.22Second Quarter
    
    
    10.98
    
    
    
    7.06Third Quarter
    
    
    10.00
    
    
    
    8.00Fourth Quarter
    
    
    9.80
    
    
    
    7.36
   PerShareRecord Date
    
    Payment Date
    
    AmountNovember 18, 2005
    
    November 30, 2005
    
    $
    0.135May 18, 2005
    
    May 27, 2005
    
    
    0.135November 30, 2004
    
    December 10, 2004
    
    
    0.13June 28, 2004
    
    July 8, 2004
    
    
    0.13
   14
    Table of Contents  Number of securities
    
    
    Weighted-averageto be issued upon
    
    
    exercise price of
    
    
    Number of securitiesexercise of
    
    
    outstanding
    
    
    remaining available foroutstanding options,
    
    
    options, warrants
    
    
    future issuances underPlan Category
    
    warrants and rights
    
    
    and rights.
    
    
    equity compensation plans.Equity compensation
Plans approved by
Security holders
    
    
    209,175
    (1)
    
    $
    3.54
    
    
    
    298,650
    (2)Equity compensation
Plans not approved
by Security holders
    
    
    65,525
    (3)
    
    
    N/A
    
    
    
    0Total
    
    
    274,700
    
    
    $
    3.54
    
    
    
    298,650
 
 (1)
    
    Represent shares granted under the Companys 1994 Employee Stock Option Plan,
as amended.(2)
    
    Represent shares available for grant under the Companys 2005 Long-Term
Incentive Plan.(3)
    
    Represents restricted stock awards granted to employees in fiscal 2004. At
November 30, 2005 40,702 of these shares were not vested. 
 ITEM 6. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 Acquisition
  15
    Table of Contents     Results of Operations
 Fiscal Year Ended November 30, 2005 as compared to Fiscal Year Ended November 30, 2004
   16
    Table of Contents         17
    Table of Contents  Liquidity and Capital Resources
       18
    Table of Contents  Critical Accounting Policies
    Revenue Recognition.
    19
    Table of Contents    Accounts receivable.
 Inventory .
 Goodwill.
  New Accounting Standards
 20
    Table of Contents    
 ITEM 7. FINANCIAL STATEMENTS
  
 ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
  
 ITEM 8A. CONTROLS AND PROCEDURES
    
 ITEM 8B. OTHER INFORMATION
  21




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PART III
 
 ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION
16(a)
  DIRECTORNAME
    
    PRINCIPAL OCCUPATION AND AGE
    
    SINCEDwight D. Goodman
    
    Chairman; age 72
    
    
    1994Morris H. Wheeler
    
    President and Chief Executive Officer,
Acting President of GCI; age 45
    
    
    1996J. Stewart Nance
    
    President of Raven Lining Systems Inc.;
age 49
    
    
    N/ARobert W. Pawlak
    
    Chief Financial Officer and Secretary;
age 37
    
    
    N/AMichael L. Boeckman
    
    Chief Financial Officer and
Administrative Partner of Cohen & Co.;
age 58
    
    
    1994Morton A. Cohen
    
    Chairman and Chief Executive Officer of
Clarion Corp.; age 70
    
    
    1994Richard L. Immerman
    
    President of BleachTech LLC; age 55
    
    
    1998
 DWIGHT D. GOODMAN
 MORRIS H. WHEELER 22
    Table of Contents    J. STEWART NANCE
 ROBERT W. PAWLAK
 Michael L. Boeckman
 Morton A. Cohen
 Richard L. Immerman
  
 ITEM 10. EXECUTIVE COMPENSATION
 23
    Table of Contents  SUMMARY COMPENSATION TABLE
 Long-TermCompensation AwardsSecuritiesRestricted
    
    UnderlyingOther Annual
    
    Stock
    
    Options
    
    All otherName and Principal
    
    Fiscal
    
    
    
    
    
    Bonus
    
    Compensation
    
    Awards($)
    
    (shares)
    
    CompensationPosition
    
    Year
    
    Salary
    
    (1)
    
    (2)
    
    (3)
    
    (4)
    
    (5)Morris H. Wheeler
    
    
    2005
    
    
    $
    175,000
    
    
    $
    132,619
    
    
    $
    0
    
    
    $
    0
    
    
    
    16,800
    
    
    $
    7,099President, Chief
    
    
    2004
    
    
    
    153,010
    
    
    
    91,869
    
    
    
    0
    
    
    
    70,125
    
    
    
    0
    
    
    
    6,510Executive Officer &
Acting President of
GCI
    
    
    2003
    
    
    
    143,000
    
    
    
    50,050
    
    
    
    0
    
    
    
    107,998
    
    
    
    0
    
    
    
    6,259J. Stewart Nance
    
    
    2005
    
    
    
    120,000
    
    
    
    94,894
    
    
    
    0
    
    
    
    0
    
    
    
    11,500
    
    
    
    7,106President  Raven
    
    
    2004
    
    
    
    111,500
    
    
    
    96,500
    
    
    
    0
    
    
    
    36,525
    
    
    
    0
    
    
    
    6,533Lining Systems,
Inc.
    
    
    2003
    
    
    
    107,500
    
    
    
    92,500
    
    
    
    0
    
    
    
    16,442
    
    
    
    0
    
    
    
    6,493Robert W. Pawlak
    
    
    2005
    
    
    
    98,000
    
    
    
    50,139
    
    
    
    0
    
    
    
    0
    
    
    
    5,200
    
    
    
    4,317Chief Financial
    
    
    2004
    
    
    
    88,275
    
    
    
    39,732
    
    
    
    0
    
    
    
    25,950
    
    
    
    0
    
    
    
    4,235Officer & Secretary
    
    
    2003
    
    
    
    82,500
    
    
    
    28,875
    
    
    
    0
    
    
    
    30,270
    
    
    
    0
    
    
    
    3,552
 
 (1)
    
    In the 2005 period includes reimbursement of $18,119 each for Mr. Wheeler and Mr.
Nance and $12,079 for Mr. Pawlak for forgiveness of a portion of the loans for restricted
stock which were repaid.(2)
    
    Excludes perquisites and other benefits, unless the aggregate amount of such
compensation is greater than 10 percent of the total of annual salary and bonus reported for
the named executive officer.(3)
    
    The restricted stock awards reflect (i) in the 2004 period shares granted in June
2004 which are subject to continued employment vesting and may vest earlier based on certain
performance objectives being met and shares granted in December 2004 which are fully vested
(ii) in the 2003 period the amount presented represents shares granted in March 2004 as long
term incentive compensation for fiscal 2003 which are subject to continued employment vesting
and included a portion of cash compensation paid to cover employees withholding taxes on the
grant. The dollar value of the restricted shares issued to the individuals are based on the
Companys stock prices on the dates of issue. The number and value of the aggregate
restricted stock holdings on November 30, 2005 for individuals named in the table are as
follows: Morris H. Wheeler 21,700 shares ($162,034), J. Stewart Nance 6,650 shares
($49,656), Robert W. Pawlak 7,150 shares ($53,389).(4)
    
    Options were granted in December 2005 as long term incentive compensation for fiscal
2005.(5)
    
    Includes corporate contributions to the Companys 401(k) Plan and dollar value of
additional life insurance paid by the Company as reported on form W-2. Option Grants in Last Fiscal Year (Individual Grants)
  24
    Table of Contents  Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option Values
  Value of UnexercisedNumber of Unexercised
    
    In-The-Money Options atOptions at November 30, 2005
    
    November 30, 2005SHARESACQUIRED ON
    
    VALUENAME
    
    EXERCISE
    
    REALIZED
    
    EXERCISABLE
    
    UNEXERCISABLE
    
    EXERCISABLE
    
    UNEXERCISABLEMorris H. Wheeler
    
    
    0
    
    
    
    0
    
    
    
    62,500
    
    
    
    12,500
    
    
    $
    255,375
    
    
    $
    41,875J. Stewart Nance
    
    
    0
    
    
    
    0
    
    
    
    15,500
    
    
    
    2,500
    
    
    
    63,885
    
    
    
    8,375Robert W. Pawlak
    
    
    0
    
    
    
    0
    
    
    
    13,000
    
    
    
    5,000
    
    
    
    50,910
    
    
    
    16,750
 Long-Term Incentive Plans  Awards in Last Fiscal Year
  
 ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
  PERCENTAGE OFNAME AND ADDRESS
    
    AMOUNT AND NATURE OF
    
    OUTSTANDINGOF BENEFICIAL OWNER
    
    BENEFICIAL OWNERSHIP
    
    SHARES OWNEDMorton A. Cohen
1801 East 9th Street
Cleveland, Ohio 44114
    
    
    1,268,980
    (1)(2)
    
    
    40.0
    %Clarion Capital Corporation
1801 East 9th Street
Cleveland, Ohio 44114
    
    
    1,175,980
    
    
    
    37.2
    %4279 Investments Ltd.
    
    
    461,124
    
    
    
    14.6
    %
 25
    Table of Contents  PERCENTAGE OFNAME AND ADDRESS
    
    AMOUNT AND NATURE OF
    
    OUTSTANDINGOF BENEFICIAL OWNER
    
    BENEFICIAL OWNERSHIP
    
    SHARES OWNEDMichael L. Boeckman
    
    
    13,283
    (2)
    
    
    *Dwight D. Goodman
    
    
    63,155
    (2)
    
    
    2.0
    %Richard L. Immerman
    
    
    52,000
    (2)
    
    
    1.6
    %J. Stewart Nance
    
    
    142,724
    (2)(3)(4)
    
    
    4.4
    %Robert W. Pawlak
    
    
    55,233
    (2)(3)
    
    
    1.7
    %Morris H. Wheeler
    
    
    142,724
    (2)(3)
    
    
    4.4
    %All directors and executive
officers as a group (7
persons)
    
    
    1,722,899
    (4)(5)
    
    
    52.3
    %
 
 *
    
    Represents less than 1%(1)
    
    Includes 1,175,980 shares owned of record by Clarion Capital Corporation
(Clarion), an entity of which Mr. Cohen is a principal.(2)
    
    Includes shares issuable upon exercise of options exercisable within 60 days of the
date hereof as follows: Mr. Cohen 5,000 shares, Mr. Boeckman 5,000 shares, Mr. Goodman 7,500
shares, Mr. Immerman 10,000 shares, Mr. Nance 16,750 shares, Mr. Pawlak 15,500 shares, and Mr.
Wheeler 68,750 shares.(3)
    
    Includes shares owned in the Company sponsored 401k Plan as of December 31, 2005 as
follows: Mr. Nance 40,026 shares, Mr. Pawlak 4,065 shares, and Mr. Wheeler 4,594 shares.(4)
    
    Includes 4,285 shares owned by children of Mr. Nance.(5)
    
    Includes 128,500 shares issuable upon exercise of options exercisable within 60 days
of the date hereof. Includes 48,685 shares owned in the Company sponsored 401k Plan as of
December 31, 2005. 
 ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
    26
    Table of Contents      
 ITEM 13. EXHIBITS
 *3.1
    
    Certificate of Incorporation of the Company, as corrected.**3.2
    
    By-Laws of the Company, as amended.***4.1
    
    Credit and Security Agreement, dated May 15, 1998, by and
between the Company and NBD Bank, N.A.###4.2
    
    Amendment to Credit and Security Agreement, dated April 29,
2005, by and between the Company and Union Planters Bank, N.A.,
the successor to NBD Bank, N.A.****10.2
    
    Lease Agreement between GlasCraft, Inc. and ProLogis North
Carolina Limited Partnership.##10.3
    
    Amendment to Lease Agreement between GlasCraft, Inc. and
ProLogis North Carolina Limited Partnership.*****10.4
    
    Employment Agreement with Morris Wheeler, Chief Executive
Officer.10.5
    
    Amendment to Employment Agreement with Morris Wheeler, Chief
Executive Officer.10.6
    
    Lease Agreement & Amendment between Raven Lining Systems,
Inc/Cohesant Materials Inc. and Kansas City Life Insurance
Company.10.7
    
    Office Space and Administrative Support Agreement between
Cohesant Technologies Inc. and Drummond Road
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Capital.10.8
    
    The Companys 2005 Long-Term Incentive Plan####14
    
    Code of Ethics for Executive Officers and All Senior Financial
Officers.21
    
    Subsidiaries of the Registrant.23
    
    Consent of Independent Public Accountants31.1
    
    302 Certification of Chief Executive Officer31.2
    
    302 Certification of Chief Financial Officer32
    
    906 Certification of Principal Executive and Financial Officers
 *
    
    Incorporated herein by reference to the Exhibit to the Companys Annual Report on Form 10-KSB for the year ended November 30, 1995.**
    
    Incorporated here in by reference to the Exhibit included to the Companys Registration Statement on Form SB-2 dated November 29, 1994 (No. 33-82732).***
    
    Incorporated herein by reference to Exhibit 4.1 included in the Companys Quarterly report on Form 10-QSB for the quarter ended May 31, 1998.****
    
    Incorporated herein by reference to the Exhibit to the Companys Annual Report on Form 10-KSB for the year ended November 30, 1998.*****
    
    Incorporated herein by reference to the Exhibit to the Companys Annual Report on Form 10-KSB for the year ended November 30, 2001.##
    
    Incorporated herein by reference to the Exhibit to the Companys Quarterly report on Form 10-QSB for the quarter ended August 31, 2003.###
    
    Incorporated herein by reference to Exhibit 4.2 included in the Companys Quarterly report on Form 10-QSB for the quarter ended May 31, 2005.####
    
    Incorporated herein by reference to the Exhibit to the Companys Annual Report on Form 10-KSB for the year ended November 30, 2003.
 28




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ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
  Fiscal
    
    
    Fiscal2005
    
    
    2004Audit Fees
    
    $
    111,000
    
    
    $
    68,325Audit Related Fees
    
    
    353,857
    
    
    
    3,275Tax Fees
    
    
    57,015
    
    
    
    23,675All Other Fees
    
    
    0
    
    
    
    1,800$
    521,872
    
    
    $
    97,075
 Audit Fees:
 Audit Related Fees:
 Tax Fees:
 All Other Fees:
   29




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COHESANT TECHNOLOGIES INC.
 
 INDEX TO FINANCIAL STATEMENTS
 PageReport of Independent Registered Public Accounting Firm
    
    F-2Consolidated Balance Sheets as of November 30, 2005 and
2004
    
    F-3Consolidated Statements of Income for the Years Ended,
November 30, 2005 and 2004
    
    F-5Consolidated Statements of Shareholders Equity
for the Years Ended November 30, 2005 and 2004
    
    F-6Consolidated Statements of Cash Flows for the Years Ended
November 30, 2005 and 2004
    
    F-7Notes to Consolidated Financial Statements
    
    F-8
 F - 1




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COHESANT TECHNOLOGIES INC.
 CONSOLIDATED
BALANCE SHEETS
 AS OF NOVEMBER 30, 2005 AND 2004
 ASSETS
 2005
    
    
    2004ASSETS:Cash and cash equivalents
    
    $
    2,238,281
    
    
    $
    5,036,582Accounts receivable, net of allowance for doubtful accounts of
$284,628 and $302,000, respectively
    
    
    4,125,062
    
    
    
    3,297,305Inventories
    
    
    3,490,087
    
    
    
    3,367,947Prepaid expenses and other
    
    
    333,751
    
    
    
    272,032Deferred tax assets
    
    
    240,200
    
    
    
    210,000Total current assets
    
    
    10,427,381
    
    
    
    12,183,866Property, plant and equipment, net
    
    
    991,730
    
    
    
    520,866License agreements, patents and other intangibles, net of
accumulated amortization of $223,474 and $139,278, respectively
    
    
    1,392,499
    
    
    
    125,296Goodwill
    
    
    8,223,913
    
    
    
    840,254Other noncurrent assets
    
    
    8,484
    
    
    
    1,815Total assets
    
    $
    21,044,007
    
    
    $
    13,672,097
  F -3




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COHESANT TECHNOLOGIES INC.
 CONSOLIDATED BALANCE SHEETS
 AS OF NOVEMBER 30, 2005 AND 2004
 LIABILITIES AND SHAREHOLDERS EQUITY
 2005
    
    
    2004LIABILITIES:Accounts payable
    
    $
    1,622,153
    
    
    $
    983,798Accrued salaries, benefits and commissions
    
    
    1,047,938
    
    
    
    786,713Accrued taxes
    
    
    387,242
    
    
    
    240,860Dividends payable
    
    
    
    
    
    
    347,005Billings in excess of costs and estimated earnings
    
    
    133,844
    
    
    
    Due to former owners of acquired business
    
    
    473,707
    
    
    
    Other current liabilities
    
    
    480,787
    
    
    
    197,119Total current liabilities
    
    
    4,145,671
    
    
    
    2,555,495Deferred tax liability
    
    
    243,700
    
    
    
    228,200Total liabilities
    
    
    4,389,371
    
    
    
    2,783,695COMMITMENTS AND CONTINGENCIES(Notes 11 and 12)SHAREHOLDERS EQUITY:Common stock ($.001 par value; 10,000,000 shares authorized and
3,123,089 and 2,613,965 shares issued and outstanding, respectively)
    
    
    3,123
    
    
    
    2,614Additional paid-in capital
    
    
    11,230,959
    
    
    
    6,313,774Accumulated other comprehensive income
    
    
    11,384
    
    
    
    Retained earnings
    
    
    5,409,170
    
    
    
    4,572,014Total shareholders equity
    
    
    16,654,636
    
    
    
    10,888,402Total liabilities and shareholders equity
    
    $
    21,044,007
    
    
    $
    13,672,097
  F -4




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COHESANT TECHNOLOGIES INC.
 CONSOLIDATED STATEMENTS OF INCOME
 FOR THE YEARS ENDED NOVEMBER 30, 2005 AND 2004
 2005
    
    
    2004NET SALES
    
    $
    22,197,702
    
    
    $
    19,312,180COST OF SALES
    
    
    11,802,995
    
    
    
    9,384,241Gross profit
    
    
    10,394,707
    
    
    
    9,927,939RESEARCH AND DEVELOPMENT EXPENSES
    
    
    934,460
    
    
    
    1,009,349SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
    
    
    7,043,393
    
    
    
    6,088,932TOTAL OPERATING EXPENSES
    
    
    7,977,853
    
    
    
    7,098,281Income from operations
    
    
    2,416,854
    
    
    
    2,829,658OTHER INCOME:Interest income
    
    
    86,972
    
    
    
    34,893Other income, net
    
    
    23,001
    
    
    
    36,483INCOME BEFORE TAXES
    
    
    2,526,827
    
    
    
    2,901,034INCOME TAX PROVISION
    
    
    898,648
    
    
    
    1,098,767NET INCOME
    
    $
    1,628,179
    
    
    $
    1,802,267EARNINGS PER SHARE BASIC
    
    $
    0.58
    
    
    $
    0.69EARNINGS PER SHARE DILUTED
    
    $
    0.57
    
    
    $
    0.67WEIGHTED AVERAGE SHARES OF COMMON STOCK
OUTSTANDINGBasic
    
    
    2,784,810
    
    
    
    2,593,759Diluted
    
    
    2,879,598
    
    
    
    2,698,662CASH DIVIDENDS PER SHARE
    
    $
    0.27
    
    
    $
    0.26COMPREHENSIVE INCOMENet Income
    
    $
    1,628,179
    
    
    $
    1,802,267Foreign currency translation adjustment
    
    
    11,384
    
    
    
    COMPREHENSIVE INCOME
    
    $
    1,639,563
    
    
    $
    1,802,267
  F -5




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COHESANT TECHNOLOGIES INC.
 CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY
 Common Stock
    
    
    Additional
    
    
    
    
    
    
    Other
    
    
    
    
    
    
    TotalPaid-in
    
    
    Retained
    
    
    Comprehensive
    
    
    Treasury
    
    
    ShareholdersShares
    
    
    Amount
    
    
    Capital
    
    
    Earnings
    
    
    Income
    
    
    Stock
    
    
    EquityBALANCE, November 30, 2003
    
    
    2,638,965
    
    
    $
    2,639
    
    
    $
    6,254,394
    
    
    $
    3,458,709
    
    
    $
    
    
    
    
    ($201,370
    )
    
    $
    9,514,372Exercise of stock options
and related tax benefits
    
    
    20,400
    
    
    
    21
    
    
    
    107,815
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    107,836Treasury Stock Retired
    
    
    (57,600
    )
    
    
    (58
    )
    
    
    (201,312
    )
    
    
    
    
    
    
    
    
    
    
    201,370
    
    
    
    Dividends Declared
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (688,962
    )
    
    
    
    
    
    
    
    
    
    
    (688,962
    )Interest on notes for
restricted stock
    
    
    
    
    
    
    
    
    
    
    (11,806
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (11,806
    )Non-cash compensation
    
    
    12,200
    
    
    
    12
    
    
    
    164,683
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    164,695Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,802,267
    
    
    
    
    
    
    
    
    
    
    
    1,802,267BALANCE, November 30, 2004
    
    
    2,613,965
    
    
    
    2,614
    
    
    
    6,313,774
    
    
    
    4,572,014
    
    
    
    
    
    
    
    
    
    
    
    10,888,402Exercise of stock options
and related tax benefits
    
    
    27,175
    
    
    
    27
    
    
    
    158,710
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    158,737Dividends Declared
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (791,023
    )
    
    
    
    
    
    
    
    
    
    
    (791,023
    )Interest on notes for
restricted stock
    
    
    
    
    
    
    
    
    
    
    (11,421
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (11,421
    )Non-cash compensation
    
    
    20,825
    
    
    
    21
    
    
    
    243,266
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    243,287Stock issued in connection
with the CuraFlo
Acquisition
    
    
    461,124
    
    
    
    461
    
    
    
    4,264,936
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,265,397Foreign Currency Translation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11,384
    
    
    
    
    
    
    
    11,384Payment of notes for
restricted stock
    
    
    
    
    
    
    
    
    
    
    261,694
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    261,694Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,628,179
    
    
    
    
    
    
    
    
    
    
    
    1,628,179BALANCE, November 30, 2005
    
    
    3,123,089
    
    
    $
    3,123
    
    
    $
    11,230,959
    
    
    $
    5,409,170
    
    
    $
    11,384
    
    
    
    
    
    
    $
    16,654,636
  F -6




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##### Table of Contents



COHESANT TECHNOLOGIES INC.
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 FOR THE YEARS ENDED NOVEMBER 30, 2005 AND 2004
 2005
    
    
    2004CASH FLOWS PROVIDED BY OPERATING ACTIVITIES:Net income
    
    $
    1,628,179
    
    
    $
    1,802,267Adjustments to reconcile net income to net cashDepreciation and amortization
    
    
    315,627
    
    
    
   247,169Non-cash compensation
    
    
    149,087
    
    
    
    164,695Loss on asset disposal
    
    
    450
    
    
    
    275Deferred tax provision
    
    
    8,700
    
    
    
    156,839Provision for doubtful accounts
    
    
    22,012
    
    
    
    26,390Net change in assets and liabilities-Accounts and note receivable
    
    
    47,286
    
    
    
    (78,907
    )Inventories
    
    
    (68,710
    )
    
    
    (168,717
    )Prepaid expenses and other
    
    
    (61,719
    )
    
    
    (22,219
    )Accounts payable
    
    
    447,176
    
    
    
    69,750Billings in excess of costs and estimated earnings
    
    
    126,719
    
    
    
    Deferred revenue
    
    
    (173,524
    )
    
    
    Other current liabilities
    
    
    650,335
    
    
    
    55,629Other noncurrent assets
    
    
    (12,079
    )
    
    
    (11,806
    )Net cash provided by operating activities
    
    
    3,079,539
    
    
    
    2,241,365CASH FLOWS USED IN INVESTING ACTIVITIES:Patent and trademark additions
    
    
    (6,637
    )
    
    
    (19,783
    )Property and equipment additions
    
    
    (434,964
    )
    
    
    (143,717
    )Proceeds from sales of property and equipment
    
    
    13,420
    
    
    
    Acquisition of CuraFlo
    
    
    (4,732,063
    )
    
    
    Net cash used in investing activities
    
    
    (5,160,244
    )
    
    
    (163,500
    )CASH FLOWS USED IN FINANCING ACTIVITIES:Proceeds from notes receivable restricted stock
    
    
    261,694
    
    
    
    Proceeds from exercise of stock options
    
    
    158,737
    
    
    
    107,836Cash dividends paid to stockholders
    
    
    (1,138,027
    )
    
    
    (987,298
    )Net cash used in financing activities
    
    
    (717,596
    )
    
    
    (879,462
    )NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
    
    
    (2,798,301
    )
    
    
    1,198,403CASH AND CASH EQUIVALENTS, beginning of year
    
    
    5,036,582
    
    
    
    3,838,179CASH AND CASH EQUIVALNETS, end of year
    
    $
    2,238,281
    
    
    $
    5,036,582SUPPLEMENTAL DISCLOSURES:Cash paid during the year for-Interest

    
    $
    
    
    
    $
    Income taxes
    
    $
    676,800
    
    
    $
    916,588
  F -7




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##### Table of Contents



COHESANT TECHNOLOGIES INC.
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 NOVEMBER 30, 2005 AND 2004
 1. NATURE OF BUSINESS
    2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 Principles of Consolidation
  Revenue Recognition
   F - 8




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##### Table of Contents



Basic and Diluted Earnings Per Share
  2005
    
    
    2004Income available to common stockholders
    
    $
    1,628,179
    
    
    $
    1,802,267Basic earnings per share:Weighted-average number of common shares outstanding
    
    
    2,784,810
    
    
    
    2,593,759Basic earnings per share
    
    $
    0.58
    
    
    $
    0.69Diluted earnings per shareWeighted-average number of common shares outstanding
    
    
    2,784,810
    
    
    
    2,593,759Stock Options
    
    
    87,106
    
    
    
    97,027Restricted Stock
    
    
    7,682
    
    
    
    7,876Diluted weighted-average number of common shares
outstanding
    
    
    2,879,598
    
    
    
    2,698,662Diluted earnings per share
    
    $
    0.57
    
    
    $
    0.67
 Statements of Cash Flows
   F - 9




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##### Table of Contents



Cash and Cash Equivalents
  Allowance of Doubtful Accounts
  Inventories
  Costs and Estimated Earnings on Uncompleted Contracts
  Costs incurred on uncompleted contracts
    
    $
    890,291Estimated earnings to date
    
    
    224,575Subtotal
    
    
    1,114,865Less  Billings to date
    
    
    (1,248,709
    )Total
    
    $
    (133,844
    )Included in the accompanying balance sheet under the
following caption:Costs and estimated earnings in excess of billings
    
    $
    Billings in excess of costs and estimated earnings
    
    
    (133,844
    )Total
    
    $
    (133,844
    )
  Property, Plant and Equipment
  F - 10




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##### Table of Contents



Leasehold improvements
    
    1-5 yearsMachinery and equipment
    
    3-10 yearsDisplays, demos and lab equipment
    
    3-5 years
  2005
    
    
    2004Leasehold improvements
    
    $
    160,165
    
    
    $
    153,714Machinery and equipment
    
    
    2,121,381
    
    
    
    1,531,914Displays, demos and lab equipment
    
    
    450,428
    
    
    
    392,3602,731,974
    
    
    
    2,077,988Less accumulated deprecation
    
    
    (1,740,244
    )
    
    
    (1,557,122
    )$
    991,730
    
    
    $
    520,866
  Goodwill and Intangible Assets
 Goodwill
  Raven
    
    
    CuraFlo
    
    
    TotalBalance as of November 30, 2004
    
    $
    840,254
    
    
    $
    
    
    
    $
    840,254CuraFlo acquisition
    
    
    
    
    
    
    7,383,659
    
    
    
    7,383,659Balance as of November 30, 2005
    
    $
    840,254
    
    
    $
    7,383,659
    
    
    $
    8,223,913
  Intangibles
  F - 11




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##### Table of Contents



Research and Development
  Income Taxes
  Shipping and Handling Fees and Costs
  Impairment of Long-Lived Assets
  Estimates and Reclassifications
  F - 12




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##### Table of Contents



New Accounting Standards
  Stock Options
  Year EndedNovember 302005
    
    
    2004Net income, as reported
    
    $
    1,628,179
    
    
    $
    1,802,267Add: Stock-based employee compensation
expense included in reported net income,
net of related tax effects
    
    
    92,433
    
    
    
    112,638Deduct: Total stock-based employee
compensation expense determined under fair
value based method for all awards, net of
related tax effects
    
    
    (142,558
    )
    
    
    (171,005
    )Pro forma net income
    
    $
    1,578,054
    
    
    $
    1,743,900Earnings per share:Basicas reported
    
    $
    0.58
    
    
    $
    0.69Basicpro forma
    
    $
    0.57
    
    
    $
    0.67Dilutedas reported
    
    $
    0.57
    
    
    $
    0.67Dilutedpro forma
    
    $
    0.55
    
    
    $
    0.65
 F - 13




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##### Table of Contents



3. ACQUISITION OF CURAFLO
    Current assets
    
    $
    1,000,592Property & equipment
    
    
    227,483Intangible assets
    
    
    1,343,000Goodwill
    
    
    7,383,659Total assets acquired
    
    
    9,954,734Liabilities assumed
    
    
    (957,274
    )Net assets acquired
    
    $
    8,997,460
 Unaudited pro forma results
  F - 14




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##### Table of Contents



Twelve Months Ended November30,2005
    
    2004Revenue
    
    $
    25,989,251
    
    
    $
    22,702,559Net Income
    
    
    1,953,658
    
    
    
    1,896,523Basic earnings per share
    
    
    0.63
    
    
    
    0.62Diluted earnings per share:
    
    
    0.61
    
    
    
    0.60
  4. SHAREHOLDERS EQUITY
 Dividends
  Per ShareRecord Date
    
    Payment Date
    
    AmountNovember 18, 2005
    
    November 30, 2005
    
    $
    0.135May 18, 2005
    
    May 27, 2005
    
    
    0.135November 30, 2004
    
    December 10, 2004
    
    
    0.13June 28, 2004
    
    July 8, 2004
    
    
    0.13
 Capital Stock
  Restricted Stock
  F - 15




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##### Table of Contents



F - 16




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##### Table of Contents



5. REVOLVING LINE OF CREDIT
  6. LONG-TERM INCENTIVE PLAN
  Stock Options
   Number of
    
    
    Weighted-AverageOptions
    
    Shares
    
    
    Exercise PriceNovember 30, 2003
    
    
    274,250
    
    
    $
    3.52Exercised
    
    
    (20,400
    )
    
    $
    3.25Canceled
    
    
    (16,000
    )
    
    $
    3.83November 30, 2004
    
    
    237,850
    
    
    $
    3.52Exercised
    
    
    (27,175
    )
    
    $
    3.37Canceled
    
    
    (1,500
    )
    
    $
    3.97November 30, 2005
    
    
    209,175
    
    
    $
    3.54
 F - 17




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##### Table of Contents



At November 30, 2005Options Outstanding
    
    Options ExercisableNumber of
    
    Remaining
    
    
    
    
    
    Number ofExercise
    
    Options
    
    Contractual
    
    Exercise
    
    Options
    
    ExercisePrices
    
    Outstanding
    
    Life
    
    Price
    
    Exercisable
    
    Price3.20
    
    
    132,675
    
    
    
    0.9
    
    
    
    3.20
    
    
    
    132,675
    
    
    
    3.204.12
    
    
    76,500
    
    
    
    2.1
    
    
    
    4.12
    
    
    
    34,750
    
    
    
    4.12$3.20-$4.12
    
    
    209,175
    
    
    
    1.3
    
    
    $
    3.54
    
    
    
    167,425
    
    
    $
    3.39
 At November 30, 2004Options Outstanding
    
    Options ExercisableNumber of
    
    Remaining
    
    
    
    
    
    Number ofExercise
    
    Options
    
    Contractual
    
    Exercise
    
    Options
    
    ExercisePrices
    
    Outstanding
    
    Life
    
    Price
    
    Exercisable
    
    Price2.83
    
    
    8,000
    
    
    
    0.7
    
    
    
    2.83
    
    
    
    8,000
    
    
    
    2.833.20
    
    
    143,725
    
    
    
    1.9
    
    
    
    3.20
    
    
    
    124,725
    
    
    
    3.204.12
    
    
    86,125
    
    
    
    3.1
    
    
    
    4.12
    
    
    
    21,625
    
    
    
    4.12$2.83-$4.12
    
    
    237,850
    
    
    
    2.3
    
    
    $
    3.52
    
    
    
    154,350
    
    
    $
    3.31
  7. RETIREMENT PLANS
  8. INCOME TAXES
  2005
    
    
    2004CURRENTU.S. Federal
    
    $
    714,357
    
    
    $
    774,418State
    
    
    161,661
    
    
    
    167,510Canadian
    
    
    13,930
    
    
    
    Total current
    
    
    889,948
    
    
    
    941,928Deferred
    
    
    8,700
    
    
    
    156,839INCOME TAX PROVISION
    
    $
    898,648
    
    
    $
    1,098,767
 F - 18




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##### Table of Contents



2005
    
    2004Federal statutory rate
    
    
    34.0
    %
    
    
    34.0
    %State taxes, net of federal benefit
    
    
    4.0
    
    
    
    4.8Foreign sales corporation or equivalent
    
    
    (1.6
    )
    
    
    (1.4
    )Other
    
    
    (0.6
    )
    
    
    0 .5Effective tax rate
    
    
    35.6
    %
    
    
    37.9
    %
  2005
    
    
    2004Deferred Tax (Liability)Asset:Financial reporting reserves not yet deductible
    
    $
    240,200
    
    
    $
    210,000Property plant and equipment
    
    
    (243,700
    )
    
    
    (228,200
    )NET DEFERRED TAX LIABILITY
    
    $
    (3,500
    )
    
    $
    (18,200
    )
 9. RELATED PARTY TRANSACTIONS
    10. SEGMENT INFORMATION
  F - 19




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##### Table of Contents



CuraFlo
    
    GCI
    
    Raven
    
    Corporate
    
    Eliminations
    
    ConsolidatedNet Sales:2005External customers
    
    $
    1,682,494
    
    
    $
    13,741,283
    
    
    $
    6,773,925
    
    
    $
    
    
    
    $
    
    
    
    $
    22,197,702Intersegment sales
    
    
    
    
    
    
    
    
    
    
    99,960
    
    
    
    
    
    
    
    (99,960
    )
    
    
    Total net sales
    
    $
    1,682,494
    
    
    $
    13,741,283
    
    
    $
    6,873,885
    
    
    $
    
    
    
    $
    (99,960
    )
    
    $
    22,197,7022004
    
    
    
    
    
    
    13,269,067
    
    
    
    6,043,113
    
    
    
    
    
    
    
    
    
    
    
    19,312,180Depreciation and
amortization:2005
    
    
    85,365
    
    
    
    182,207
    
    
    
    42,153
    
    
    
    5,902
    
    
    
    
    
    
    
    315,6272004
    
    
    
    
    
    
    186,670
    
    
    
    52,506
    
    
    
    7,993
    
    
    
    
    
    
    
    247,169Net income (loss):2005
    
    
    88,232
    
    
    
    1,537,663
    
    
    
    1,005,690
    
    
    
    (1,003,406
    )
    
    
    
    
    
    
    1,628,1792004
    
    
    
    
    
    
    1,596,127
    
    
    
    965,884
    
    
    
    (759,744
    )
    
    
    
    
    
    
    1,802,267Identifiable assets:2005
    
    
    10,173,829
    
    
    
    6,086,128
    
    
    
    2,513,319
    
    
    
    2,270,731
    
    
    
    
    
    
    
    21,044,0072004
    
    
    
    
    
    
    5,744,669
    
    
    
    2,512,310
    
    
    
    5,415,118
    
    
    
    
    
    
    
    13,672,097Capital expenditures:2005
    
    
    29,522
    
    
    
    392,219
    
    
    
    11,383
    
    
    
    1,840
    
    
    
    
    
    
    
    434,9642004
    
    
    
    
    
    
    110,368
    
    
    
    24,165
    
    
    
    9,184
    
    
    
    
    
    
    
    143,717
  Region
    
    2005
    
    2004United States
    
    
    66
    %
    
    
    66
    %Asia/Pacific Rim
    
    
    10
    
    
    
    12Canada
    
    
    10
    
    
    
    5Europe
    
    
    10
    
    
    
    12Other
    
    
    4
    
    
    
    5Total
    
    
    100
    %
    
    
    100
    %
 F - 20




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##### Table of Contents



2005
    
    
    2004Equipment and Parts
    
    $
    14,528,485
    
    
    
    65.4
    %
    
    $
    13,851,974
    
    
    
    71.7
    %Coatings
    
    
    6,470,706
    
    
    
    29.2
    
    
    
    5,386,106
    
    
    
    27.9Licensee
    
    
    83,646
    
    
    
    0.4
    
    
    
    74,100
    
    
    
    0.4Rehabilitation
    
    
    1,114,865
    
    
    
    5.0
    
    
    
    
    
    
    
    Total
    
    $
    22,197,702
    
    
    
    100
    %
    
    $
    19,312,180
    
    
    
    100
    %
 11. COMMITMENTS
 Fiscal Year
    
    Amount2006
    
    $
    361,2092007
    
    
    315,8562008
    
    
    305,9392009
    
    
    132,1382010
    
    
    97,071Thereafter
    
    
    30,800
  12. CONTINGENCIES
  13. UNAUDITED QUARTERLY CONSOLIDATED FINANCIAL DATA
 Fiscal Quarter
    
    FiscalFirst
    
    Second
    
    Third
    
    Fourth
    
    Year2005:Net Sales
    
    $
    4,260,799
    
    
    $
    5,702,957
    
    
    $
    5,620,990
    
    
    $
    6,612,956
    
    
    $
    22,197,702Gross Profit
    
    
    2,025,844
    
    
    
    2,601,952
    
    
    
    2,716,952
    
    
    
    3,049,959
    
    
    
    10,394,707Net Income
    
    
    237,635
    
    
    
    406,986
    
    
    
    451,244
    
    
    
    532,314
    
    
    
    1,628,179Earnings Per Share Diluted
    
    
    0.09
    
    
    
    0.15
    
    
    
    0.16
    
    
    
    0.17
    
    
    
    0.572004:Net Sales
    
    $
    4,235,450
    
    
    $
    5,290,141
    
    
    $
    5,116,265
    
    
    $
    4,670,324
    
    
    $
    19,312,180Gross Profit
    
    
    2,081,826
    
    
    
    2,703,603
    
    
    
    2,748,011
    
    
    
    2,394,499
    
    
    
    9,927,939Net Income
    
    
    288,500
    
    
    
    529,153
    
    
    
    541,724
    
    
    
    442,890
    
    
    
    1,802,267Earnings Per Share Diluted
    
    
    0.11
    
    
    
    0.20
    
    
    
    0.20
    
    
    
    0.16
    
    
    
    0.67
 F - 21




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##### Table of Contents



SIGNATURES
   COHESANT TECHNOLOGIES INC.BY:
    
    /s/ Morris H. WheelerMorris H. WheelerPresident and Chief Executive Officer
  /s/ Dwight D. Goodman

Dwight D. Goodman
    
    Chairman of the Board of Directors
    
    February 20, 2006/s/ Morris H. Wheeler

Morris H. Wheeler
    
    President and Chief Executive
Officer (Principal Executive
Officer) and Director
    
    February 20, 2006/s/ Michael L. Boeckman
    
    Director
    
    February 20, 2006Michael L. Boeckman/s/ Morton A. Cohen
    
    Director
    
    February 20, 2006Morton A. Cohen/s/ Richard L. Immerman
    
    Director
    
    February 20, 2006Richard L. Immerman/s/ Robert W. Pawlak

Robert W. Pawlak
    
    Chief Financial Officer
(Principal Financial and
Accounting Officer)
    
    February 20, 2006