<PAGE>   1


                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                  FORM 10-KSB
(Mark One)
[X]      Annual Report under Section 13 or 15(d)of the Securities Exchange Act 
         of 1934

For the fiscal year ended                November 30, 1998
                          ------------------------------------------------------

[ ]      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.
              (Exact name of Small Business Issuer in Its charter)

Delaware                                                  34-1775913
(State or Other Jurisdiction                         (I.R.S. Employer
of Incorporation or Organization)                    Identification No.)

         5845 West 82nd Street, Ste. 102, Indianapolis, Indiana 46278
         (Address of Principal Executive Offices)                 (Zip Code)
Issuer's Telephone Number, Including Area Code:  (317) 875-5592

Securities registered under to Section 12(b)of the Act: Common Stock, $.001 Par
Value; Common Stock Purchase Warrants, registered on the Boston Stock Exchange

Securities registered under to Section 12(g)of the Act: Common Stock, $.001 Par
Value; Common Stock Purchase Warrants

         Check whether the issuer: (1) filed all reports required to be filed
by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for
such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for past 90 days. Yes  X
No_____

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

         State issuer's revenues for its most recent fiscal year.  $11,735,872.

         State the aggregate market value of the voting stock held by
non-affiliates computed by reference to the average bid and asked prices of
such stock, as of February 3, 1999. $4,448,717.

         As of February 3, 1999, the Issuer had 2,372,333 shares of Common
Stock, $.001 par value, outstanding.

Documents incorporated by reference: Registrant intends to file with the
Securities and Exchange Commission a definitive Proxy Statement pursuant to
Regulation 14A of the Securities Exchange Act of 1934 within 120 days of the
close of its fiscal year ended November 30, 1998, portions of which document
shall be deemed to be incorporated by reference in Part III of this Annual
Report on Form 10-K from the date such document is filed.


<PAGE>   2



ITEM 1.  BUSINESS

(a)      General Development of Business
         -------------------------------

         Cohesant Technologies Inc. ("Company" or "Cohesant") is engaged in the
design, development, manufacture and sale of specialized two component spray
finishing and coating application equipment, replacement parts and supplies
used in the operation of this equipment and specialty two component epoxy
coating and grout products.

         The Company's spray finishing and coating application equipment
systems are designed specifically for use with multiple component formulations
such as fiberglass reinforced plastics and polyurethane foam. These equipment
systems commonly are employed in the construction, transportation and marine
industries to apply insulation, protective coating, sealant and anti-corrosive
products and to create packaging and to fill molds for diverse products such as
recreational boat hulls and plumbing fixtures. The Company also maintains an
extensive inventory of replacement parts and supplies.

         The Company manufactures the AquataPoxy and Raven lines of epoxy
coating and grout products. These high performance operator and environmentally
safe formulations provide protection from corrosion caused by infiltration,
atmospheric conditions and chemical attack. Although the Company believes there
are many more uses for the AquataPoxy and Raven products, they have most
prevalently been used in the construction, repair, rehabilitation and
maintenance of water and wastewater treatment, distribution and collection
systems, food & beverage, industrial and recreational facilities.

         For the years ended November 30, 1998 and 1997, the Company had net
sales of $11,736,000 and $9,831,000, respectively, of which $9,468,000 and
$8,633,000, respectively, were for equipment systems, replacement parts and
supplies and $2,268,000 and $1,198,000, respectively, were for coating and
grout products.

         The Company, which was organized in 1994, conducts business through
its subsidiaries, Glas-Craft, Inc. ("GCI"), an Indiana corporation, and Raven
Lining Systems ("Raven"), an Oklahoma corporation. As used herein, the term
"Company" includes the operations of Cohesant, and its wholly-owned
subsidiaries GCI and Raven, unless the context indicates otherwise.


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(b)      Narrative Description of Business
         ---------------------------------

PRODUCTS

  Specialized Spray Equipment. The Company designs and manufactures a wide
range of spray and application equipment systems and supplies to spray
multi-component formulations such as fiberglass reinforced plastics and
polyurethane foam. Net sales of spray equipment systems amounted to $4,472,000
and $4,084,000 for the fiscal years ended November 30, 1998 and 1997,
respectively, representing 38.1% and 41.5%, respectively, of net sales.

  Fiberglass reinforced plastic spray equipment. The predecessor to GCI
developed spray and applications equipment systems for the modern method of
fiberglass reinforced plastic product manufacturing known as the `spray up'
method. The spray up manufacturing process is quicker and more cost effective
than the `hand layup' and mass production molding methods of reinforced
fiberglass products manufacturing and can be used to manufacture a wide variety
of products, including such diverse products as boat hulls and plumbing and
bathroom fixtures. The spray up method is ideally suited for small quantity and
custom production.

         The United States Occupational Safety and Health Administration
("OSHA") and environmental regulatory agencies in the United States and abroad
regulate the use of various volatile organic chemicals such as styrene,
acetone, methylene chloride and organic peroxides. These chemicals are often
used in the application of fiberglass by the spray up method. GCI's spray
equipment systems use air assist containment ("AAC") to reduce spray emissions
and overspray and increase transfer efficiency and spray control. Improved
containment limits emissions of environmentally and occupationally hazardous
chemicals. Greater transfer efficiency results in less waste of product.

  Other multi-component spray equipment. The Company also designs and
manufactures spray and applications equipment systems for dispensing
polyurethane and other multi-component materials and foams. Polyurethane is
used for insulation, packaging, flotation devices and many other uses. Foams
are used for insulation and protective coatings and for the manufacture of
formed plastic products such as automobile and aircraft components and marine
products. The Company's technology has many applications in the plastics and
coatings industries. Consequently, the Company continuously seeks and develops
new and different uses for its equipment. The Company, when necessary, will
modify existing equipment designs or will design new equipment to meet the
requirements of new plastics and other 


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products as well as changing regulation and manufacturing methods.

  Replacement and spare parts. A significant portion of the Company's equipment
business is the sale of replacement and spare parts and supplies for its
current and discontinued spray equipment systems. The Company maintains an
inventory of approximately 5,900 items to enable it to efficiently fill orders
and service repairs. Net sales of replacement and spare parts and supplies
amounted to $4,996,000 and $4,549,000, representing 42.6% and 46.3% of net
sales for the fiscal years ended November 30, 1998 and 1997, respectively.

Raven Lining Systems

         Raven produces products under the Raven and AquataPoxy brands.
AquataPoxy and Raven product brands utilize proprietary formulations of and
application methods for solvent-free coatings and grouts that contain no
volatile organic compounds ("VOC's"). As with GCI, Raven benefits significantly
from increasing government regulation of VOC's and the resulting trend towards
low VOC products. Additionally, Raven fulfills specifying engineer's desires
for manufactured certified professional applications.

  AquataPoxy Products. The AquataPoxy line of solvent-free epoxy coating and
grout products is designed to extend the life of a structure by protecting it
from corrosion. These products are formulated with higher performance
characteristics compared with competitive products, including excellent
resistance to moisture, corrosion and chemical attack. AquataPoxy products are
used in the construction, repair, rehabilitation and maintenance of food
processing and water storage structures, waste water treatment and collection
systems of municipalities, industrial and recreational facilities. AquataPoxy
products are unique with their high moisture tolerant characteristics that
allow them to be applied to underwater and moisture filled concrete surfaces.
AquataPoxy is ideally suited for the rapidly growing market in underground
rehabilitation of infrastructure. AquataPoxy is therefore being specified for
use by many leading consultants, design engineers and governmental agencies in
connection with the rehabilitation of potable and/or wastewater facilities by
trained applicators. The Company is aggressively demonstrating and testing
AquataPoxy to expand awareness of its unique attributes and the application and
marketing benefits of its certified applicator program.

         AquataPoxy products contain no solvents or VOC's. Properly applied,
AquataPoxy products are inert once cured and do not release harmful by-products
into air, water or the environment. Conversely, competitive solvent-borne and
isocyanate-based coatings have the potential to release carcinogens and other


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hazardous substances into the environment and generally are not desirable for
applications that involve contact with food, drinking water, animals or people.
The Company maintains certification under the National Sanitation Foundation
Standard 61 and meets qualifications of the United States Department of
Agriculture for agricultural applications, food processing and potable water
facilities and marine environments.

  Raven Products. Raven extends the Company's presence in the protective
coating and lining marketplace. Raven's unique high performance line of
products and network of Certified Applicators provide access to specialty
coating contractors and key end-users in the wastewater, pulp and paper,
petrochemical, power and other industries. Raven's sprayable epoxies were
formulated for ultra high-build (20-250 mils per coat) application on concrete,
masonry and steel surfaces providing protection from atmospheric and chemical
corrosion. The high physical strengths of some Raven formulations permit the
epoxy to enhance the structural integrity of the structure. Raven products can
be quickly applied under harsh environmental conditions providing quick return
to service and substantial savings for industrial facilities by lessening
downtime. The life span of infrastructure exposed to these conditions can
increase dramatically with the use of high performance protective coatings and
linings such as Raven.

         Raven coatings and grouts are also solventless, nontoxic, 100% solids
epoxy products, emitting no VOC's. These products offer safe working
environments while complying with the existing United States Environmental
Protection Agency ("EPA") regulations.

         Net sales of AquataPoxy and Raven products amounted to $2,268,000 and
$1,198,000, representing 19.3% and 12.2% of net sales for the fiscal years
ended November 30, 1998 and 1997, respectively.

RTM Systems, Inc.

         GCI has a one-third interest in RTM Systems, Inc. ("RTM"), an Indiana
corporation organized in 1989. RTM markets equipment which produces injection
molded fiberglass reinforced plastic products. The RTM equipment is designed
for low-pressure injection molding, thereby allowing injection of catalyzed
resin under low pressure into a closed mold containing a pre-cut fiberglass mat
which strengthens the finished product. This method, like most molding
processes, permits the resin to displace all of the air in the mold, completely
saturating the fiberglass mat which is then allowed to cure. Products
manufactured using this process are characterized by the strength enhancing
properties of fiberglass while being cost effectively 



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produced. RTM also sells products and equipment used to build molds.

MARKETING

  Distributors and Certified Applicators

         The Company's products are sold through a growing network of
independent distributors and Certified Applicators in the United States and
overseas.

         Generally, the products of GCI are sold through over 100 independent
domestic and foreign equipment distributors. Most of these distributors are
engaged in the sale of polyester resins and gel coats, fiberglass strand and
mat, polyurethane foams and coatings and similar items. Many of the foreign
distributors sell only industrial equipment. For the fiscal years ended
November 30, 1998 and 1997, GCI's ten largest distributors accounted for 46%
and 41%, respectively, of equipment system and replacement and spare parts
sales. Of the foregoing, four of the distributors in fiscal 1998 and five of
the distributors in fiscal 1997 were foreign based. Generally, GCI has written
distribution agreements that are cancelable upon 30 days notice with its
foreign distributors. GCI provides training to the distributors and customers
in the use of its equipment systems and products.

         Raven markets its products, application and spray technology through
domestic and foreign independent distributors, manufacture representatives and
Certified Applicators. Raven presently has twenty domestic Certified
Applicators located in seventeen states.

  Brochures, Advertising and Trade Shows

         The Company supports its marketing with internally prepared brochures,
sales catalogues, direct mailings and media insertions in various trade
publications. In connection with coating and grout products, the Company also
prepares media promotion kits and product demonstration kits for use by
Certified Applicators and distributors. Company personnel, representatives and
distributors attend trade shows in the United States and overseas. Typically,
these shows are attended by potential customers and distributors. In addition,
these shows afford the Company the opportunity to keep abreast of its
competitors' products and developments in the industry. Company personnel also
participate in various industry organizations and work with complimentary
technologies to present educational and technical seminars. These seminars
assist in industry growth and guides prospective customers to the Company's
products and methods.

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<PAGE>   7

MANUFACTURING AND RAW MATERIALS SUPPLY

         The Company assembles its equipment system products from commercially
available components and components manufactured to specification by a variety
of vendors. Minimal fabrication of components is performed by the Company. The
Company is not dependent upon any single vendor for the conduct of its
business, and generally has alternative sources for all necessary components.

         Similarly, there are a number of alternative sources of the raw
materials used in the manufacture of the coating and grout products of the
Company. The Company maintains good working relationships with all major resin
suppliers. The Company does not believe that it is dependent on any one vendor
of raw materials for its coating and grout products and the Company does not
believe the loss of any one supplier would have a material adverse impact on
the Company.

COMPETITION

         The markets for all of the Company's products are highly competitive.
The Company competes with numerous well-established companies, most of which
possess substantially greater financial, marketing, personnel and other
resources than those of the Company.

         There are a number of competitive equipment manufacturers, which
include the Binks division of ITW, Inc. and the Venus-Gusmer division of PMC,
Inc. Competitors of the Company's AquataPoxy and Raven products include
Carboline Company, Tnemec Company, Inc. and International Protective Coatings.
The Company competes by continually broadening awareness of its unique products
through engineering, research and development, by continuing to offer its
entire product line on a price competitive basis, and through acquisition or
product line extensions.

         The markets for the Company's products are characterized by changing
technology and industry standards. Accordingly, the ability of the Company to
compete is dependent upon the Company's ability to complete development and
effectively market its state-of-the-art equipment and coating products.

RESEARCH, DEVELOPMENT AND ENGINEERING

         The Company has a research and development program to continually
improve all of its existing products, to develop new products and to custom
engineer equipment and products to meet



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specific customer requests. The Company has thirteen full-time employees
devoted to engineering, research and development. Virtually all of the products
marketed by the Company were developed internally, either by the Company or its
predecessor companies. Research, development and engineering expenses for the
fiscal year ended November 30, 1998 and 1997 were approximately $832,000 and
$848,000 respectively, or 7.1% and 8.6%, respectively, of net sales. The
Company expects this level of research, development and engineering expense to
continue or slightly increase in the future.

GOVERNMENT REGULATION

         The Company is subject to regulations administered by the EPA, OSHA,
various state agencies, county and local authorities acting in cooperation with
Federal and state authorities and foreign governmental regulatory agencies.
Among other things, these regulatory bodies impose restrictions to control air,
soil and water pollution, to protect against occupational exposure to
chemicals, including health and safety risks, and to require notification or
reporting of the storage, use and release of certain hazardous chemicals and
substances. The extensive regulatory framework imposes significant compliance
burdens and risks on the Company's operating subsidiaries. Governmental
authorities have the power to enforce compliance with these regulations and to
obtain injunctions or impose civil and criminal fines in the case of
violations.

         The Company has in place programs to achieve and maintain substantial
compliance with the currently existing environmental and worker exposure laws
and regulations which materially affect the Company's continuing businesses. As
of the date of this Report, based on its experience and consultations with
environmental consultants, management believes that the Company is taking or
has taken all necessary measures to comply with all applicable Federal, state
and local environmental laws and regulations and worker exposure regulations.

         As a product exporter, the Company is subject to regulation by foreign
governments. There can be no assurance that the Company will be in compliance
with or achieve compliance with laws and regulations enacted by foreign
government in the future.

PATENTS, TRADEMARKS AND PROPRIETARY INFORMATION

         The Company holds nine U.S. patents and three U.S. patent
applications, of which five patents and one patent application are applicable
to AAC(R) methods and apparatus of the Company. The Company's AAC(R) methods
and apparatus use a flow of compressed air 



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to contain and reduce over spray and vapor emissions and increase transfer
efficiency and spray control.

         The Company believes that product recognition is an important
competitive factor in the equipment and chemical industries. Accordingly, the
Company promotes the "GLAS-CRAFT" and "RAVEN" trademarks in connection with its
marketing activities and holds a United States trademark registration for
AAC(R).

         The Company also relies on proprietary know-how and confidential
information and employs various methods to protect the processes, concepts,
ideas and documentation associated with its products.

EMPLOYEES

         As of January 22, 1999, the Company employs approximately 70 full time
persons, 15 of whom are in sales, 9 are in engineering, 7 are in research and
development and service, 4 are in quality control, 22 are in manufacturing and
13 are in accounting and administration. The Company believes its relations
with its employees are good.

ITEM 2.  PROPERTIES

         The Company's executive offices are located in Indianapolis, Indiana,
with its principal manufacturing, warehouse and distribution facilities located
in Indianapolis, Indiana and Tulsa, Oklahoma. GCI leases approximately 38,400
square feet of office, manufacturing and warehouse space in Indianapolis,
Indiana through January, 2004. Raven leases approximately 10,000 square feet of
combined office and manufacturing space in Tulsa, Oklahoma through February,
2001. The Company believes its facilities are adequate to meet its current and
prospective needs.

         The Company owns two adjacent buildings in St. Louis, Missouri which
are being marketed for sale. The St. Louis buildings were utilized by the
discontinued operations of American Chemical Company, a Company subsidiary.

ITEM 3.  LEGAL PROCEEDINGS

         There are no pending legal proceedings to which the Company is
subject, nor to the knowledge of the Company are any legal proceedings
threatened, other than for ordinary, routine proceedings incidental to its
business, except as follows:

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         The Company is proceeding to investigate and remediate the
environmental condition of its St. Louis property in order that the property
can be marketed and sold. The work includes soil remediation required by the
Missouri Department of Natural Resources in connection with the closure of
underground storage tanks. The Missouri Department of Natural Resources has
also requested that an additional soil and groundwater contamination
investigation plan be submitted for the site to fully define the extent of
groundwater contamination. The Company accrues costs for an estimated
environmental liability when management becomes aware that a liability is
probable and is able to reasonably estimate the Company's cost. Generally, that
occurs no later than when feasibility studies and related cost assessments of
remedial techniques are completed, and the extent to which other potentially
responsible parties (if any), can be expected to contribute is determined.
Outside consultants are being used to perform site investigation work and to
advise management on the findings and remediation alternatives. In management's
opinion, the liabilities for the environmental matter mentioned above which are
probable and reasonably estimable are accrued. As of November 30, 1998, the
environmental reserve was approximately $220,000. The reserve is reflected as
an adjustment to the carrying value of the property held for sale. The actual
costs to be incurred by the Company will be dependent on final delineation of
contamination, final determination of remedial action required, negotiations
with federal and state agencies with respect to cleanup levels, changes in
regulatory requirements, innovations in investigatory and remedial technologies
and effectiveness of remedial technologies employed.

         A former employee of ACC has filed a workers' compensation claim
related to injuries incurred in connection with the August 1996 fire at the
facility. In the claim, the employee is requesting payment of an additional 15%
award of compensation, approximately, $150,000, claiming ACC violated a
Missouri safety statute in connection with the occurrence of his injury. As of
November 30, 1998, the Company has not recorded a provision for this matter as
management intends to vigorously defend these allegations and believes the
payment of the penalty is not probable.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         No matters were submitted to a vote of the Company's stockholders
during the fourth quarter of the fiscal year ended November 30, 1998.


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ITEM 4.1 EXECUTIVE OFFICERS OF THE REGISTRANT

         This information is included in this Report pursuant to Instruction 3
of Item 401(b) of Regulation S-K. The following is a list of the executive
officers of the Company and a brief description of their business experience.
Each executive officer will hold office until his successor is chosen and
qualified.

         MORTON A. COHEN has been Chairman of the Board since the Company's
inception in July 1994, and served as the Company's Chief Executive Officer
from July 1994 to January 1998. Mr. Cohen has been Chairman of the Board of
Directors and Chief Executive Officer of Clarion Capital Corporation
("Clarion"), a private, small business investment company, for more than five
years. He is also a director of Sentex Sensing Technologies, Inc., a
manufacturer of instrumentation measuring devices; Zemex Corporation, an
industrial minerals company; Gothic Energy Corporation, a developer and
operator of oil and gas producing properties and DHB Capital Group, Inc., a
holding company with a diversified portfolio. Mr. Cohen is the father-in-law of
Morris H. Wheeler, a director.

         DWIGHT D. GOODMAN has been a Director of the Company since its
inception and has been the Chief Executive Officer of the Company since January
1998 and President of the Company since July 1996. From May 1996 until June
1998, Mr. Goodman had been the Chief Financial Officer; from May 1996 until
July 1996, Mr. Goodman had been the Company's Executive Vice President and
Chief Financial Officer. Mr. Goodman had been the President and Chief Executive
Officer of GCI from 1984 to 1996.

         RICHARD A. MORDARSKI has been an executive officer of the Company
since June 1998 and has been President of GCI since May 1996. Prior thereto,
Mr. Mordarski served for 15 years as Director of Marketing of GCI.

         J. STEWART NANCE has been an executive officer of the Company since
June 1998 and has been President of Raven since December 1995. Mr. Nance was
part owner and President of Raven Management Services Inc., from whom the
Assets of Raven were acquired, from 1992 to 1995.

         ROBERT W. PAWLAK has been Vice President-Finance and Chief Financial
Officer of the Company since June 1998, Secretary of the Company since June
1997 and Controller of the Company since October 1996. Mr. Pawlak held various
accounting positions for GCI since March 1994.


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PART II

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDERS MATTERS

         The Common Stock and Warrants of the Company are quoted on NASDAQ
under the symbols "COHT" and "COHTW", respectively. The Company's Common Stock
and Warrants are also listed on the Boston Stock Exchange.

         The following table sets forth the high and low closing bid prices of
the Company's Common Stock and Warrants for each quarter in the two year period
ended November 30, 1998, as reported by NASDAQ. Bid quotations represent high
and low prices quoted between dealers, do not reflect retail mark-up, mark-down
or commission, and do not necessarily represent actual transactions.
<TABLE>
<CAPTION>

COMMON STOCK                                                                                  Bid Price
------------                                                                                  ---------

                          Year Ended November 30, 1997                               High                       Low
                          ----------------------------                               ----                       ---
                          <S>                                                       <C>                       <C>    
                                First Quarter                                       $1.5625                   $0.9375
                                Second Quarter                                       1.2812                    0.8125
                                Third Quarter                                        1.8125                    0.9375
                                Fourth Quarter                                       1.50                      1.0625

                          Year Ended November 30, 1998
                          ----------------------------
                                First Quarter                                       $1.75                     $1.0312
                                Second Quarter                                       2.344                     1.406
                                Third Quarter                                        2.344                     1.75
                                Fourth Quarter                                       1.922                     1.375
WARRANTS

                          Year Ended November 30, 1997
                          ----------------------------
                                First Quarter                                       $0.125                    $0.0625
                                Second Quarter                                       0.0937                    0.0312
                                Third Quarter                                        0.0937                    0.0312
                                Fourth Quarter                                       0.125                     0.0312

                          Year Ended November 30, 1998
                          ----------------------------
                                First Quarter                                       $0.156                    $0.0312
                                Second Quarter                                       0.281                     0.125
                                Third Quarter                                        0.25                      0.094
                                Fourth Quarter                                       0.188                     0.063
</TABLE>

         In October 1998 the Company announced its plans to purchase up to
400,000 shares of its common stock, or approximately 15% of its outstanding
shares. As of January 31, 1999 the Company has repurchased 375,400 shares. The
Company sold 61,890 shares in December 1998 to the Company sponsored
401(k)plan.

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<PAGE>   13

         On January 29, 1999, the Company had approximately 490 beneficial
holders of its Common Stock.

         The Company has not paid any cash dividends on its Common Stock to
date and does not anticipate paying any in the foreseeable future. The Board of
Directors intends to retain earnings, if any, to support the growth of the
Company's business.


ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS


RESULTS OF OPERATIONS

         Fiscal Year Ended November 30, 1998 as compared to Fiscal Year Ended
November 30, 1997

         Net sales for the fiscal year ended November 30, 1998, were
$11,736,000 representing an increase of $1,905,000 or 19.4%, from fiscal 1997
net sales of $9,831,000. The increase consisted of a $1,070,000 or 89.3%
increase in net sales of coating and grout products to $2,268,000 in fiscal
1998. This increase was primarily attributable to increasing acceptance and
specification of AquataPoxy and Raven products. Equipment systems and parts
sales increased to $9,468,000, an $835,000 or 9.7% increase from fiscal 1997
net sales. The increase in equipment systems and parts sales was attributable
to a 22% gain in domestic sales offset by a 3% decrease in foreign sales. The
decrease in foreign sales was primarily due to a 21% drop in sales to the
Asian/Pacific region offset somewhat by increased sales in Europe and South
America.

         For the fiscal years ended November 30, 1998 and 1997,respectively,
gross margins as a percentage of net sales were 43.9% and 43.5%, respectively.
The slight increase in gross margin in fiscal 1998 was due to increased sales
volume of the higher margin coating and grout products, offset by a decrease in
equipment margins attributable to competitive pricing primarily in the China
and Spain markets. Also, a product mix consisting of increased sales of OEM
systems with lower margins than standard system sales attributed to a decrease
in equipment gross profit margins.

          Research, development and engineering expenses were approximately
$832,000 and $848,000 in the years ended November 30, 1998 and 1997,
respectively. This decrease was attributable to several personnel changes.

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         Selling, general and administrative expenses for the fiscal years
ended November 30, 1998 and 1997, were $3,695,000 and $3,167,000, respectively,
representing an increase of approximately 16.7% or $528,000. Approximately
$390,000 of the increase was due to additional marketing expenses at Raven that
contributed directly to the increased sales volume. GCI's increased marketing
costs of $264,000 were attributable to the addition and expenses associated
with outside sales staff and increased advertising. Administrative expenses
decreased approximately $126,000. This decrease was a result of lower expenses
associated with professional services in addition to an adjustment of $45,000
as a result of a final negotiated payment from previously accrued professional
services.

Other income, net of other expenses for the fiscal year ended November 30, 1998
increase approximately $87,000 from the fiscal 1997 period. This increase was
due principally to income derived from amortization of a noncompetition
agreement executed by the Company with the buyer of certain assets of American
Chemicals Company's discontinued operation, offset by increased interest
expense and a decrease in income derived from the unconsolidated affiliate.


DISCONTINUED OPERATIONS

         On November 30, 1997, the Company's Board of Directors signed an
agreement to sell certain assets of ACC's adhesive, private label and toll
manufacturing business (the "discontinued operation") and management decided to
discontinue this business. The operating activity performed during fiscal 1998
includes sales through the closing and tolling activities for the buyer
thereafter. Such tolling activity expired in the second quarter. The
discontinued operation recorded sales totaling $722,879 and $5,762,053 for the
fiscal years ended November 30, 1998 and 1997, respectively. Total operating
losses from the discontinued operation were $454,059 and $1,712,136 for the
fiscal years ended November 30, 1998 and 1997, respectively. The 1998 losses
have been reflected as a reduction to the Accrued Liabilities Related to
Discontinued Operations in the accompanying Condensed Consolidated Balance
Sheet.

On January 14, 1998, the Company completed the sale of certain of the assets of
the discontinued operation and signed a three-year agreement not to compete in
this business. The purchase price was approximately $1,350,000, including
$350,000 for the non-compete agreement. The purchase price was paid in cash
except for a $300,000 promissory note bearing 8% interest and due in three
years. The note was prepaid in September 1998 for $250,000 cash, which
approximated the carrying value of the note. The 



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<PAGE>   15

$350,000 non-compete agreement is being amortized to income over the three-year
contract period. The Company has disposed of the remaining personal property
and is in the process of making the real property ready for sale or lease while
it continues to investigate and remediate the environmental issues associated
with the property.

LIQUIDITY AND CAPITAL RESOURCES

         On May 15, 1998, the Company entered into a revolving line of credit
agreement with a bank. This $3,500,000 credit facility is subject to a
borrowing base and accrues interest at the bank's prime lending (7.75% as of
November 30, 1998). The credit facility is fully secured by a lien on all
assets of the Company and its operating subsidiaries. The credit facility
expires on May 1, 1999. This agreement requires that the Company meets certain
covenants including financial ratios. As of November 30, 1998, the Company is
in compliance with the financial covenants. As of November 30, 1998, the
outstanding balance under this agreement was $868,472.


         In October 1998, the Company announced a 400,000 share repurchase
program. Through January 31, 1999, the Company has repurchased 375,400 shares
for approximately $665,000.

          As of January 31, 1999, the Company had approximately $1,650,000 in
unused revolving credit borrowings.

         The Company has placed $200,000 in short-term U.S. government money
market funds, to secure a continuing contractual payment obligation. The
Company has classified such funds as restricted, temporary investments under
non-current assets in its financial statements.

         As of November 30, 1998, the Company's working capital increased to
$3,158,832 from $2,500,151 at November 30, 1997 and includes cash of $119,967.

         The Company believes that its existing cash resources and working
capital coupled with its bank line will be adequate to meet its capital needs
for the foreseeable future.

YEAR 2000

The "Year 2000 Issue" refers to the inability of computers and applications to
correctly interpret and process Year 2000 dated transactions. The software
problem results from a memory-saving practice of using two digits instead of
four to denote years in a program. Computer systems that are not Year 



                                      15
<PAGE>   16

2000 compliant may not be able to be relied upon to process data accurately for
transactions dated after the year 1999.

The Company has developed a plan to address possible exposures related to the
impact of the Year 2000 Issue. Possible exposures include the Company's ability
to procure and manage inventory, ship product and bill and collect from
customers. The Company is in the process of testing and confirming the
readiness of its mainframe computer system which has recently been upgraded.
Also, the Company has identified other software and systems with potential Year
2000 problems. The Company estimates that costs associated with making internal
information systems Year 2000 compliant will not be material, and thus will not
have a material impact on the Company's financial position.

In addition, the Company has identified and is assessing the readiness of third
parties, primary suppliers and customers. There is no guarantee that the
systems of these third parties will be timely converted, however, the Company
plans to devote the necessary resources to resolve any potentially significant
Year 2000 issues facing it, whether from within its operations or as a result
of its interaction with these third parties, in a timely manner.

NEW ACCOUNTING STANDARD

         The Financial Accounting Standards Board (FASB) released a new
accounting standard SFAS No. 131, Disclosure about Segments of an Enterprise,
which is effective for fiscal periods beginning after December 15, 1997. Under
the provisions of this statement, the Company will be required to modify or
expand the financial statement disclosures for operating segments, products and
services, and geographic areas. The implementation of this pronouncement will
not affect the Company's financial position or results of operations.


ITEM 7.  FINANCIAL STATEMENTS

         This information appears in a separate section of this report
following Part III.

ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND 
         FINANCIAL DISCLOSURE

         None.

                                    PART III

ITEM 9.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

                                      16
<PAGE>   17

         The Company incorporates herein by reference the information appearing
under the caption "Election of Directors" and "Section 16(a) Beneficial
Ownership Reporting Compliance" of the Company's definitive Proxy Statement to
be filed with the Securities and Exchange Commission on or about March 25,
1999. Information with respect to the Company's executive officers appear at
the end of PART I of this Form 10-KSB.



ITEM 10. EXECUTIVE COMPENSATION

         The Company incorporates herein by reference the information appearing
under the caption "Executive Compensation" of the Company's definitive Proxy
Statement to be filed with the Securities and Exchange Commission on or about
March 25, 1999.


ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         The Company incorporates herein by reference the information appearing
under the caption "Ownership of Voting Securities" of the Company's definitive
Proxy Statement to be filed with the Securities and Exchange Commission on or
about March 25, 1999.


ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

                  The Company incorporates herein by reference the information
appearing under the caption "Certain Relationships and Related Transactions" of
the Company's definitive Proxy Statement to be filed with the Securities and
Exchange Commission on or about March 25, 1999.


                                      17
<PAGE>   18


ITEM 13. EXHIBITS, LIST AND REPORTS ON FORM 8-K

     (a)      Exhibits

          #2.1    Asset Purchase Agreement by and among TACC International
                  Corporation, American Chemcial Company, and Cohesant
                  Technologies, Inc.
          *3.1    Certificate of Incorporation of the Company, as corrected.
         **3.2    By-Laws of the Company, as amended.
         **4.1    Form of Underwriter's Unit Purchase Option.
         **4.2    Form of Public Warrant Agreement.
         **4.3    Form of Registration Rights Agreement.
        ***4.4    Credit and Security Agreement, dated May 15, 1998, by and
                  between the Company and NBD Bank, N.A.
        **10.1    The Company's 1994 Employee Stock Option Plan.
          10.2    Lease Agreement between Glas-Craft, Inc. and ProLogis North
                  Carolina Limited Partnership.
      ****10.4    Financial Advisory Agreement between Clarion Management Ltd.
                  and the Company dated June 1, 1996.
          21.1    Subsidiaries of the Registrant.
          23      Consent of Accountants
          27      Financial Data Schedule

#        Incorporated herein by reference to the Exhibit to the Company's
         Annual Report on Form 10-KSB for the year ended November 30, 1997.

*        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, 1996.



         (b)      Reports on Form 8-K. - none


                                      18


<PAGE>   19
                                                                  
                           COHESANT TECHNOLOGIES INC.

                         INDEX TO FINANCIAL STATEMENTS



                                                                       Page
                                                                       ----

Report of Independent Public Accountants                               F-2
Consolidated Balance Sheets as of November 30, 1998 and
     1997                                                              F-3
Consolidated Statements of Operations for the Years Ended,
         November 30, 1998 and 1997                                    F-5
Consolidated Statements of Shareholders' Equity
         for the Years Ended November 30, 1998 and 1997                F-6
Consolidated Statements of Cash Flows for the Years Ended
         November 30, 1998 and 1997                                    F-7
Notes to Consolidated Financial Statements                             F-8




                                     F - 1







<PAGE>   20


                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS




To the Shareholders of
Cohesant Technologies Inc.:

We have audited the accompanying consolidated balance sheets of COHESANT
TECHNOLOGIES INC. (a Delaware corporation) and subsidiaries as of November 30,
1998 and 1997, and the related consolidated statements of operations,
shareholders' equity and cash flows for the years then ended. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Cohesant Technologies Inc. and
subsidiaries as of November 30, 1998 and 1997, and the results of their
operations and their cash flows for the years then ended in conformity with
generally accepted accounting principles.




                                                        ARTHUR ANDERSEN LLP



Indianapolis, Indiana,
December 22, 1998.





                                     F - 2

<PAGE>   21


                                            COHESANT TECHNOLOGIES INC.

                                            CONSOLIDATED BALANCE SHEETS

                                         AS OF NOVEMBER 30, 1998 AND 1997

                                                      ASSETS
<TABLE>
<CAPTION>

                                                                                         1998                       1997
                                                                                   -----------------        -----------------
ASSETS:
<S>                                                                                       <C>                       <C>      
  Cash and cash equivalents                                                               $  119,967                $  59,863
  Accounts receivable, net of allowance for doubtful accounts of $85,370 and
       $73,948 in 1998 and 1997, respectively                                              1,947,626                1,533,127
  Inventory                                                                                3,421,531                3,181,912
  Prepaid expenses                                                                           152,371                  104,684
  Deferred tax assets                                                                        165,600                  165,600
  Current assets - discontinued operations                                                         -                1,719,047
                                                                                          ----------               ----------
          Total current assets                                                             5,807,095                6,764,233

  Restricted, temporary investments                                                          215,617                  205,791
  Property, plant and equipment, net of accumulated depreciation of $588,113
         and $409,034 in 1998 and 1997, respectively                                         605,740                  627,855

  Investment and advances in unconsolidated affiliate                                         83,120                  105,502
  Patents and other intangibles, net of accumulated amortization of $
       78,571    and $ 81,243  in 1998 and 1997, respectively                                123,989                  135,082
  Goodwill, net of accumulated amortization of $110,628 and $73,752 in 1998
       and 1997, respectively                                                                658,644                  576,556
  Other noncurrent assets                                                                      6,039                   16,409
  Noncurrent assets - discontinued operations, held for sale                                  71,237                  445,396
                                                                                          ----------               ----------
          Total assets                                                                    $7,571,481               $8,876,824
                                                                                          ==========               ==========

</TABLE>






         The accompanying notes are an integral part of these consolidated
balance sheets.

                                     F - 3

                                     
<PAGE>   22



                                            COHESANT TECHNOLOGIES INC.

                                            CONSOLIDATED BALANCE SHEETS

                                         AS OF NOVEMBER 30, 1998 AND 1997

                                       LIABILITIES AND SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>


                                                                                         1998                      1997
                                                                                   -----------------        -----------------

<S>                                                                                       <C>                    <C>         
LIABILITIES:
  Revolving line of credit                                                                $  868,472             $  1,552,280
  Current maturities of long-term liabilities                                                163,335                   63,639
  Accounts payable                                                                         1,057,753                1,567,432
  Accrued wages and benefits                                                                  28,596                  129,488
  Accrued liabilities related to discontinued operation                                       62,890                  579,000
  Other current liabilities                                                                  498,044                  372,243
                                                                                          ----------             ------------
          Total current liabilities                                                        2,679,090                4,264,082

  Other noncurrent liabilities                                                               151,735                   62,673
                                                                                          ----------             ------------
          Total liabilities                                                                2,830,825                4,326,755

COMMITMENTS AND CONTINGENCIES (Notes 10 and 11)


SHAREHOLDERS' EQUITY:
  Common stock ($.001 par value; 10,000,000 shares authorized and
          2,688,343 shares issued)                                                             2,688                    2,688
  Additional paid-in capital                                                               6,450,360                6,450,360
  Retained deficit                                                                        (1,206,638)              (1,902,979)
  Treasury stock at cost, (280,600 shares)                                                  (505,754)                       -
                                                                                          ----------             ------------
          Total shareholders' equity                                                       4,740,656                4,550,069
                                                                                          ----------             ------------
          Total liabilities and
            shareholders' equity                                                          $7,571,481             $  8,876,824
                                                                                          ==========             ============


</TABLE>







                                     F - 3





         The accompanying notes are an integral part of these consolidated
balance sheets.
<PAGE>   23




                                            COHESANT TECHNOLOGIES INC.

                                       CONSOLIDATED STATEMENTS OF OPERATIONS

                                  FOR THE YEARS ENDED NOVEMBER 30, 1998 AND 1997
<TABLE>
<CAPTION>


                                                                                              1998                          1997
                                                                                        ---------------               --------------

<S>                                                                                         <C>                        <C>         
NET SALES                                                                                   $ 11,735,872               $  9,830,598

COST OF SALES                                                                                  6,577,665                  5,559,342
                                                                                            ------------               ------------
          Gross profit                                                                         5,158,207                  4,271,256

RESEARCH, DEVELOPMENT AND ENGINEERING EXPENSES                                                   831,968                    848,266

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES                                                   3,695,061                  3,166,579
                                                                                            ------------               ------------
          Income from operations                                                                 631,178                    256,411

OTHER INCOME (EXPENSE):
  Interest expense                                                                               (95,407)                   (82,238)
  Interest income                                                                                  9,826                     11,672
  Equity in earnings of unconsolidated affiliate                                                  32,334                     41,452
  Other income, net                                                                              118,410                      6,862
                                                                                            ------------               ------------
INCOME FROM CONTINUING OPERATIONS BEFORE
INCOME TAXES                                                                                     696,341                    234,159

INCOME TAX BENEFIT                                                                                  --                       20,100
                                                                                            ------------               ------------
INCOME FROM CONTINUING OPERATIONS                                                                696,341                    254,259

DISCONTINUED OPERATIONS:
  Loss from discontinued operations                                                                 --                   (1,559,136)
  Loss on disposal of discontinued operations                                                       --                     (153,000)
                                                                                            ------------               ------------
                                                                                                    --                   (1,712,136)
                                                                                            ------------               ------------
NET INCOME (LOSS)                                                                           $    696,341               $ (1,457,877)
                                                                                            ============               ============

NET INCOME (LOSS) PER SHARE (BASIC AND DILUTED)
     CONTINUING OPERATIONS                                                                  $       0.26               $       0.10
     DISCONTINUED OPERATIONS                                                                        --                        (0.64)
                                                                                            ------------               ------------
  NET INCOME (LOSS) PER SHARE (BASIC AND DILUTED)                                           $       0.26               $      (0.54)
                                                                                            ============               ============
AVERAGE SHARES OF COMMON STOCK OUTSTANDING                                                     2,655,587                  2,688,343
                                                                                            ============               ============

</TABLE>


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


                                     F - 5
<PAGE>   24
<TABLE>
<CAPTION>


                                            COHESANT TECHNOLOGIES INC.

                                  CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

                                  FOR THE YEARS ENDED NOVEMBER 30, 1998 AND 1997


                                                    Additional
                                                      Paid-in          Retained          Treasury
                                  Common Stock        Capital           Deficit           Stock             Total
                                  ------------     ------------      ------------      -----------      ------------

<S>                               <C>              <C>               <C>               <C>               <C>        
BALANCE, November 30, 1996        $     2,688      $ 6,450,360       $  (445,102)      $      --         $ 6,007,946


  Net loss                               --               --          (1,457,877)             --          (1,457,877)
                                  -----------      -----------       -----------       -----------       -----------
BALANCE, November 30, 1997              2,688        6,450,360        (1,902,979)             --           4,550,069

  Repurchase of  280,600 shares
      of common stock                    --           (505,754)         (505,754)

  Net income                             --               --             696,341              --             696,341
                                  -----------      -----------       -----------       -----------       -----------
BALANCE, November 30, 1998        $     2,688      $ 6,450,360       $(1,206,638)      $  (505,754)      $ 4,740,656
                                  ===========      ===========       ===========       ===========       ===========
</TABLE>

















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


                                     F - 6

<PAGE>   25

<TABLE>
<CAPTION>

                                             COHESANT TECHNOLOGIES INC.

                                       CONSOLIDATED STATEMENTS OF CASH FLOWS

                                  FOR THE YEARS ENDED NOVEMBER 30, 1998 AND 1997

                                                                                 1998                    1997
                                                                         -------------------      ----------------
<S>                                                                             <C>                 <C>        
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income (loss) -                                                           696,341             (1,457,877)
  Adjustments to reconcile net income (loss)
    to net cash used in continuing operations-
      Loss from discontinued operations                                            --                1,559,136
      Loss on disposal of discontinued operations                                  --                  153,000
      Depreciation and amortization                                             266,962                228,102
      Deferred tax benefit                                                         --                  (20,100)
      Provision for doubtful accounts                                            51,161                 84,718
      Equity in income of unconsolidated affiliate                              (32,334)               (41,452)
      Net change in current assets and current liabilities-
          Accounts receivable                                                  (465,660)              (323,469)
          Tax refund receivable                                                    --                   93,700
          Inventories                                                          (266,918)            (1,001,383)
          Prepaid expenses                                                      (47,687)                 5,508
          Accounts payable                                                     (509,679)               (80,512)
          Other current liabilities                                            (489,049)               262,609
          Increase in other noncurrent assets                                    (2,792)                (8,404)
          Increase (decrease) in other noncurrent liabilities                    89,062                (12,541)
                                                                            -----------            -----------
          Net cash used in continuing operations                               (710,593)              (558,965)
          Net cash provided by (used in) discontinued operations              1,916,097               (925,931)
                                                                            -----------            -----------
          Net cash provided by (used in) operating activities                 1,205,504             (1,484,896)
                                                                            -----------            -----------

CASH FLOWS PROVIDED BY (USED IN) INVESTING
  ACTIVITIES:
  Purchase of patents                                                            (1,736)                (9,518)
  Property and equipment additions                                             (164,507)              (255,355)
  Property and equipment additions of discontinued operations                      --                 (303,499)
  Insurance proceeds related to discontinued operations                         177,109                200,000
  Payments from unconsolidated affiliate                                         54,716                 77,257
                                                                            -----------            -----------
          Net cash provided by  (used in) investing activities                   65,582               (291,115)
                                                                            -----------            -----------

CASH FLOWS PROVIDED BY  (USED IN) FINANCING
  ACTIVITIES:
  Borrowings (payments) under revolving line of credit                         (683,808)             1,402,280
  Principal payments under capital lease obligations                            (21,420)               (12,705)
  Repurchase of common stock                                                   (505,754)                  --
                                                                            -----------            -----------
          Net cash provided by (used in) financing activities                (1,210,982)             1,389,575
                                                                            -----------            -----------

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
                                                                                 60,104               (386,436)
CASH AND CASH EQUIVALENTS, at beginning of  period                               59,863                446,299
                                                                            -----------            -----------
CASH AND CASH EQUIVALENTS, at end of period                                 $   119,967            $    59,863
                                                                            ===========            ===========
SUPPLEMENTAL DISCLOSURES:
  Cash paid during the year for-
    Interest                                                                $    95,407            $    90,795
                                                                            ===========            ===========
    Income taxes                                                                      0                      0
                                                                            ===========            ===========

</TABLE>

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

                                     F - 7


<PAGE>   26


                           COHESANT TECHNOLOGIES INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                           NOVEMBER 30, 1998 AND 1997


1.  NATURE OF BUSINESS
    ------------------

Cohesant Technologies Inc. and its subsidiaries (the "Company" or "Cohesant")
are engaged in the design, development, manufacture and sale of specialized
spray finishing and coating application equipment, replacement parts and
supplies used in the operation of the equipment and specialty coating and grout
products.

The Company's direct, wholly owned subsidiaries, Glas-Craft Inc. ("GCI") and
Raven Lining Systems Inc. ("Raven") sell their products through a network of
independent distributors and Certified Applicators in the United States and
overseas. Industries served include: construction, transportation and marine.

The Company's executive offices are located in Indianapolis, Indiana with its
principal manufacturing, warehouse and distribution facilities located in
Indianapolis, Indiana and Tulsa, Oklahoma.

2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
    ------------------------------------------

     a.  Basis of Presentation
         ---------------------

The consolidated financial statements include the accounts of the Company and
its direct, wholly owned subsidiaries, GCI and Raven. The former adhesives,
private label and toll manufacturing operations of American Chemical Company
("ACC") also have been included in the accompanying financial statements but
are presented as discontinued operations (Note 13). Intercompany accounts and
transactions have been eliminated. The Company's noncontrolling investment in
an affiliate is accounted for under the equity method.

     b.  Income Taxes
         ------------

The Company files a consolidated Federal income tax return with its wholly
owned subsidiaries. Income taxes are provided based on the liability method of
accounting pursuant to Statement of Financial Accounting Standards No. 109
(SFAS 109), "Accounting for Income Taxes." The liability method measures the
effective tax impact of future taxable income or deductions resulting from
differences in the tax and financial reporting bases of assets and liabilities
reflected in the consolidated balance sheets and the expected tax impact of
carryforwards for tax purposes.



                                     F - 8
<PAGE>   27


     c. Earnings Per Share
        ------------------

The Company adopted Statement of Financial Accounting Standards (SFAS) No. 128,
Earnings per Share in 1998. Basic earnings per share were computed based upon
the weighted average number of shares of common stock outstanding during the
period. The weighted average number of shares used in the computation for 1998
and 1997 were 2,655,587 and 2,688,343, respectively. Diluted earnings per share
was computed based upon the weighted average shares that would have been
outstanding if all dilutive potential common shares would have been converted
into shares at the earliest date possible. After considering outstanding stock
options, the diluted weighted average number of shares used in the computation
for 1998 and 1997 was 2,697,095 and 2,688,343, respectively. In determining
diluted earnings per share, the warrants, the underwriter's purchase option and
related warrants (Note 4) were not included in the calculation of diluted
earnings per share because they would have an antidilutive effect.

     d.  Statements of Cash Flows
         ------------------------

For purposes of the Statements of Cash Flows, all highly liquid investments
purchased with an original maturity of 90 days or less are classified as cash
and cash equivalents. Cash equivalents consist of securities of the U.S.
Government and its agencies.

Certain noncash investing activities are described below:

During the fiscal years ended November 30, 1998 and 1997, the Company
transferred $27,300 and $83,642 of inventory to property and equipment,
respectively. During 1998, the Company recorded a payable to the former owners
of Raven and increased goodwill by $118,964 under its contingent purchase price
obligations.

     e.  Inventories
         -----------

Inventories are stated at the lower of cost or market, with cost determined
using the first-in, first-out method. Inventory costs include raw material,
labor (including material handling) and overhead costs. An inventory reserve is
provided for obsolete and slow-moving inventory to reduce the carrying amount
to its estimated net realizable value. The inventory reserve is not material.

At November 30, 1998 and 1997, the net carrying value of inventories consisted
of the following:
<TABLE>
<CAPTION>

                                                    1998                       1997
                                                ------------              -----------

<S>                                             <C>                        <C>       
Raw materials                                   $2,803,719                 $2,676,953
Work-in-process                                    222,547                     73,156
Finished goods                                     395,265                    431,803
                                                ----------                 ----------
                                                $3,421,531                 $3,181,912
                                                ==========                 ==========
</TABLE>




                                     F - 9
<PAGE>   28

     f.  Property, Plant and Equipment
         -----------------------------

Property and equipment are carried at cost. Depreciation of property and
equipment is provided by use of the straight-line method over the estimated
useful lives of the assets as follows:

           Machinery and equipment                         3-10 years
           Furniture and fixtures                          5-10 years
           Leasehold improvements                           3-5 years
           Displays, demos and lab equipment                3-5 years

Property and equipment consist of the following:
<TABLE>
<CAPTION>

                                                   1998                       1997
                                             -------------              --------------
<S>                                           <C>                        <C>        
Leasehold improvements                        $    91,653                $    79,031
Machinery and equipment                           884,278                    735,024
Displays, demos and lab equipment                 217,922                    222,834
                                              -----------                -----------
                                                1,193,853                  1,036,889
Less accumulated deprecation                     (588,113)                  (409,034)
                                              -----------                -----------
                                              $   605,740                $   627,855
                                              ===========                ===========
</TABLE>

     g.  Intangible Assets
         -----------------

The initial purchase price in excess of the fair value of identifiable net
assets acquired of Raven, goodwill, is being amortized on a straight-line basis
over 17 years. Additional goodwill resulting from future contingent purchase
price payments earned will be amortized on a straight-line basis over the
remaining life of the original 17-year period. The earnout agreement provides
for contingent payments, not to exceed $600,000, payable in cash or the
Company's stock, based on the profitability of Raven over a four year period
from the acquisition date.

Legal and related external costs of patents is being amortized using the
straight-line method over their estimated useful lives (approximately 3 to 10
years). Other intangibles consist of the cost of certain product
certifications. Amortization of deferred certification costs is provided by use
of the straight-line method over the estimated future period of benefit
(approximately 5 to 8 years).

    h.  Impairment of Long-Lived Assets
        -------------------------------

The Company accounts for the impairment of long-lived assets and for long-lived
assets to be disposed of in accordance with SFAS No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of".
Under the provisions of the statement, the Company continually evaluates its
long-lived assets in light of events and circumstances that may indicate that
the remaining estimated useful life may warrant revision or that the remaining
value may not be recoverable. When factors indicate that long-lived assets
should be evaluated for possible impairment, the Company uses an estimate of
the related cash flows over the remaining life of the asset in measuring
whether that asset is recoverable. To the extent an impairment has occurred,
the excess of the carrying value of the long-lived assets over their estimated
recoverable value will be charged to operations.


                                    F - 10
<PAGE>   29

     i.  Research and Development
         ------------------------

The costs associated with research and development programs for new products
and significant improvements, which totaled approximately $831,968 and $848,266
in 1998 and 1997, respectively, are expensed as incurred.

     j.  Estimates and Reclassifications
         -------------------------------

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, disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of sales and expenses during the reporting period. Actual
results could differ from those estimates.

Certain reclassifications have been made to the prior year financial statements
to conform to the current year presentation. These reclassifications have no
impact on net operating results previously reported.

     k.  Stock Options
         -------------

In accordance with SFAS No. 123, the Company uses the intrinsic value method to
account for stock options, consistent with the existing rules established by
Accounting Principles Board No. 25, "Accounting for Stock Issued to Employees."
No compensation expense has been recognized for stock options granted to
employees.

     l.  Fair Values of Financial Instruments
         ------------------------------------

Statement of Financial Accounting Standards No. 107, "Disclosures About Fair
Value of Financial Instruments," requires disclosure of fair value information
for certain financial instruments. The carrying amounts of cash and cash
equivalents, temporary investments, accounts receivable, accounts payable and
noncurrent liabilities (excluding capital lease obligations) approximate fair
value because of the short maturity of these instruments.

     m.  New Accounting Standard
         -----------------------

The Financial Accounting Standards Board (FASB) released a new accounting
standard SFAS No. 131, Disclosure about Segments of an Enterprise, which is
effective for fiscal periods beginning after December 15, 1997. Under the
provisions of this statement, the Company will be required to modify or expand
the financial statement disclosures for operating segments, products and
services, and geographic areas. The implementation of this pronouncement will
not affect the Company's financial position or results of operations.


                                    F - 11
<PAGE>   30




3.  STOCK OPTION PLAN
    -----------------

The Company has adopted a Stock Option Plan (the "Option Plan") to provide for
the grant of options to purchase shares of common stock to qualified employees
(including officers and directors). The exercise price of any options granted
under the plan shall be 100% of the fair market value of the common stock as of
the date of grant (or 110% of the fair market value of the common stock if the
grant is an "incentive stock option," as defined by the Internal Revenue Code,
to an employee who owns more than 10% of the Company's outstanding common
stock). Options may not be exercised more than ten years after the date of
grant (five years if the grant is an incentive stock option to any employee who
owns more than 10% of the Company's outstanding common stock). The Company has
reserved 250,000 shares of common stock for issuance upon exercise of stock
options. At November 30, 1998, there were 68,250 exercisable options and 38,500
options available for grant. There were 113,000 options granted during February
1998 with an exercise price of $1.56. No options were granted during 1997.

The Company accounts for this plan under APB Opinion No. 25, under which no
compensation expense is recognized for options issued at or above the market
price on the date of the grant. Accordingly, no compensation expense has been
recorded. Had compensation expense been determined under the provisions of SFAS
No. 123, "Accounting for Stock-Based Compensation", income from continuing
operations would have been reduced to $663,909 and $240,317 in 1998 and 1997,
respectively. Net income (loss) would have been $663,909 and $(1,471,819) in
1998 and 1997, respectively.

The fair value of options granted during 1998 was $.99 per share. The fair
value of the options granted was estimated on the date of the grant using the
Black-Sholes option pricing model with the following assumptions for 1998:
risk-free interest rate of 5.5%, expected volatility of 72.1%, no expected
dividend yield and an expected life of 5 years for all options granted.

Stock option activity under the plan was as follows:
<TABLE>
<CAPTION>

                                                                     NUMBER OF             WEIGHTED-AVERAGE
OPTIONS                                                               SHARES                EXERCISE PRICE
-------                                                              --------              ----------------
<S>                                                                 <C>                        <C>     
November 30, 1996                                                    192,500                    $   2.57
                  Canceled                                            (6,000)                   $   1.25
                  Canceled                                            (1,000)                   $   5.00
                                                                    --------

November 30, 1997                                                    185,500                    $   2.32
                  Granted                                            113,000                    $   1.56
                  Canceled                                           (61,000)                   $   5.00
                  Canceled                                           (26,000)                   $   1.25
                                                                    --------
November 30, 1998                                                    211,500                    $   1.52

Shares Exercisable                                                    68,250                    $   1.49
</TABLE>


                                    F - 12
<PAGE>   31




4.  WARRANTS
    --------

The Company was organized in Delaware in July 1994, and commenced operations on
November 30, 1994. On December 7, 1994, the Company completed its initial
public stock offering ("Offering") of 1,100,000 units ("Units") at $5.00 per
Unit. In January 1995, the underwriter acquired an additional 150,000 Units at
$5.00 per Unit under terms of the Offering's over-allotment option. Each Unit
consists of one share of common stock and one redeemable common stock purchase
warrant ("Warrant"). The Warrants and common stock comprising the Units are
immediately detachable and separately transferable. Each Warrant entitles the
holder to purchase one share of common stock for $5.75 during the four-year
period commencing one year after the Offering. Since the warrant exercise price
exceeded the market value of the common stock when the units were issued, no
value was assigned to the warrants. The Company may call the Warrants for
redemption under certain conditions. The Company also sold to the underwriter
for $100 a purchase option to purchase up to 110,000 Units. The purchase option
is exercisable at $7.75 per Unit (155% of the initial public offering price of
the Units) for a period of four years commencing one year from the Offering.

5.  INVESTMENT AND ADVANCES IN UNCONSOLIDATED AFFILIATE
    ---------------------------------------------------

GCI owns one-third of the common stock of RTM Systems, Inc. (RTM). The Company
is accounting for this investment under the equity method. An additional
reserve is provided when necessary to adjust the Company's investment and
advances in RTM to expected net realizable value.

Certain RTM employees perform services for the benefit of GCI, and GCI pays
certain other general and administrative expenses of RTM. RTM charged GCI fees,
net of RTM costs paid by GCI, totaling $28,297 and $10,100 in fiscal 1998 and
1997, respectively. GCI also sells dispensing systems to RTM. Sales to RTM
totaled $16,558 and $25,068 in fiscal 1998 and 1997, respectively. Included in
these sales are profits to GCI of $1,121 and $3,287 in fiscal 1998 and 1997,
respectively.

6.   LIABILITIES
     -----------

     a.  Revolving Line of Credit
         ------------------------

On May 15, 1998, the Company entered into a revolving line of credit agreement
with a bank. This $3,500,000 credit facility is subject to a borrowing base and
accrues interest at the bank's prime lending rate (7.75% as of November 30,
1998). The credit facility is fully secured by a lien on all the assets of the
Company and its operating subsidiaries. The credit facility expires on May 1,
1999.

This agreement requires that the Company meet certain covenants including
financial ratios. As of November 30, 1998, the Company was in compliance with
the financial covenants. As of November 30, 1998, the outstanding balance under
this agreement was $868,472.

The Company's previous credit facility expired on May 1, 1998, and had an
outstanding balance at November 30, 1997, of $1,552,280.

                                    F - 13
<PAGE>   32

     b.  Capital Leases
         --------------

The Company leases certain machinery and equipment under agreements which are
classified as capital leases. Future minimum payments, by year, under these
noncancellable capital leases consist of the following at November 30, 1998:
<TABLE>
<CAPTION>

                        Minimum lease payments:

                                                 Year                          1998                    1997
                                                 ----                          ----                    ----
                                <S>              <C>                         <C>                      <C>    
                                                 1998                        $     -                  $28,355
                                                 1999                         29,735                   29,735
                                                 2000                         26,535                   26,535
                                                                         ---------------------------------------
                                Minimum lease payments                        56,270                   84,625

                                Less - Amount
                                   representing interest                      5,344                   12,391
                                                                         -----------------       ------------------

                                Present value of future
                                    minimum lease payments                   $50,926                  $72,234
                                                                         =================       ==================
</TABLE>


     c.  Other Noncurrent Liabilities
         ----------------------------

At November 30, 1998 and 1997, other noncurrent liabilities, including capital
lease obligations, consisted of the following:

<TABLE>
<CAPTION>
                                                                             1998                    1997
                                                                        ---------------         -------------
<S>                                                                         <C>                     <C>
Present value of lease payments                                             $50,926                 $72,234

Obligation arising from the acquisition
  of deferred formula costs and customer
  lists, payable in minimum monthly installments
  of $2,250, including interest
  imputed at 10% through March 1999 
  This obligation was settled in November 1998                                 --                   $32,992
</TABLE>





                                    F - 14
<PAGE>   33



<TABLE>
<S>                                                                     <C>                        <C>
Noninterest bearing deferred compensation 
  obligation, payable to the wife of
  the founder of a predecessor of ACC 
  in annual installments of approximately
  $25,000, including interest imputed at 
  12% for her lifetime, estimated to be
  through 1999; collateralized by a restricted 
  temporary investment (Note 10)                                          21,086                     21,086
                       
Deferred income being amortized over
  contractual period not to compete                                      243,058                       --
                                                                        --------                   --------
                                                                         315,070                    126,312
Less- Current portion                                                    163,335                     63,639
                                                                        --------                   --------
Long-term portion                                                       $151,735                   $ 62,673
                                                                        ========                   ========
</TABLE>

7.  RETIREMENT PLANS
    ----------------

During 1998, the Company converted ACC's defined benefit pension plan to a
401(k) (or defined contribution plan). In connection with this conversion,
substantially all of the plans assets totaling approximately $130,000 were
contributed to the new plan in satisfaction of the initial contribution
requirement. No additional contributions by the Company are required under the
new plan.

The Company has defined contribution profit sharing plans for all nonunion
employees meeting minimum eligibility requirements. It is the Company's policy
to contribute up to 3% of total wages for each employee who makes certain
minimum contributions. The amounts contributed by the Company during 1998 and
1997 were $77,169 and $70,399, respectively. 






                                    F - 15
<PAGE>   34

8. INCOME TAXES
   ------------

The provision for income taxes consists of the following components :
<TABLE>
<CAPTION>


                                                       1998                1997
                                                    ----------         -----------
<S>                                                  <C>                <C>
CURRENT
  Federal                                            $      0           $      0
  State                                                     0                  0
                                                     --------           --------
          Total current                                     0                  0

DEFERRED
          Total deferred                                    0            (20,100)
                                                     --------           --------
INCOME TAX (BENEFIT)                                 $      0           $(20,100)
                                                     ========           ========
</TABLE>

No income tax liability was payable in 1998 and 1997 due to the utilization of
net operating loss carryforwards and reversal of temporary differences which
represent a reduction of taxable income for which valuation allowances had been
previously provided.

Temporary differences, credits and carryforwards which give rise to the net
deferred tax asset at November 30, 1998 and 1997, are as follows:
<TABLE>
<CAPTION>

                                                                         1998                         1997
                                                                   -------------                 ------------

<S>                                                                 <C>                           <C>        
Financial reporting reserves not
  yet deductible                                                    $   180,500                   $   430,600
Depreciation and amortization                                            35,000                       (89,800)
Net operating loss carryforwards
  attributable to:
    ACC                                                                 611,300                       658,600
    Cohesant                                                            151,200                       177,500
General business credits                                                145,600                       145,600
AMT credit carryforward                                                   3,500                         3,500
                                                                    -----------                   -----------
                                                                      1,127,100                     1,326,000
Less- Valuation allowance                                              (961,500)                   (1,160,400)
                                                                    -----------                   -----------
NET DEFERRED TAX ASSET                                              $   165,600                   $   165,600
                                                                    ===========                   ===========
</TABLE>

At November 30, 1998, for Federal income tax purposes, the Company including
Cohesant , Raven and ACC, has net operating loss carryforwards (NOL's) totaling
approximately $2,060,800 which expire through 2012. Included in ACC's NOL's are
$911,000 of separate return limitation year (SRYL) NOL's whose annual
utilization is limited to approximately 


                                    F - 16
<PAGE>   35

$4,000. The Company also has general business credits totaling approximately
$145,600 which expire through fiscal 2009.

A valuation allowance reduces deferred tax assets when it is "more likely than
not" that some portion or all of the deferred tax assets will not be realized.
A valuation allowance has been provided for the Company's NOL's, general
business credits and a certain portion of other deferred tax assets.
Realization of deferred tax assets associated with the NOL's and general
business credit carryforwards is dependent upon generating sufficient taxable
income and other factors prior to their expiration. Management believes that
there is risk that these NOL's and credit carryforwards may expire unused and,
accordingly, has established a valuation allowance against them. Although
realization is not assured for the remaining deferred tax assets for which a
valuation allowance has not been provided, management believes it is more
likely than not that they will be realized through the future taxable earnings
or alternative tax strategies.


9.  RELATED PARTY TRANSACTIONS
    --------------------------

From December 1994 to May 31, 1996, the Company was party to a cost sharing
arrangement ("arrangement"), with Clarion Capital Corporation ("CCC"), the
Company's majority shareholder, that provided for reimbursement by the Company
of certain occupancy, leased equipment, and other administrative costs incurred
by CCC as a result of shared facilities. In April 1996, upon the formation of
Clarion Management Ltd. ("CML"), an affiliate of CCC, the arrangement was
assigned to CML. Commencing June 1, 1996, the arrangement was replaced by a
management agreement ("agreement") which recognized the increased role played
by CML and its managing member in the affairs of the Company following the
resignation of the Company's prior president in May 1996. The agreement
provides that CML will provide management assistance and general administrative
support for the Company and shall be paid $10,500 per fiscal quarter. This
agreement was amended in October 1998, increasing the quarterly payment to
$13,000 effective December 1, 1998. Pursuant to the agreement, CML was paid
$42,000 and $40,900, net of expenses for shared personnel during the fiscal
years ended November 30, 1998 and 1997, respectively.


10.  COMMITMENTS
     -----------

The Company leases its office, a portion of its manufacturing and warehouse
facilities, computer equipment and Company cars under noncancellable operating
leases expiring at various dates through November 2004. Future minimum rental
payments required under these noncancellable operating leases are summarized as
follows:

<TABLE>
<CAPTION>
                               Fiscal
                                Year                                  Amount
                                ----                                  ------

<S>                              <C>                                  <C>    
                                 1999                                 277,943
                                 2000                                 261,210
                                 2001                                 201,254
                                 2002                                 171,132
</TABLE>
                                    F - 17
<PAGE>   36
<TABLE>
<S>                           <C>                                     <C>
                                 2003                                 165,880
                              Thereafter                               13,824
</TABLE>

Rent expense totaled $321,183 and $429,000 for the years ended November 30,
1998 and 1997, respectively.

The Company holds $200,000 in short-term U.S. government money market funds, to
secure a continuing contractual payment obligation of the Company stemming from
its acquisition of ACC. As a consequence of this agreement, the Company has
classified such funds and the interest earned thereon as Restricted, Temporary
Investments under noncurrent assets on the accompanying Consolidated Balance
Sheet.


11.  CONTINGENCIES
     -------------

On March 5, 1997, a jury verdict was rendered in a lawsuit ACC filed in 1991
against a customer seeking collection for amounts owed on open account. The
customer filed a counterclaim against ACC alleging damages arising out of a
1988 distributors agreement. The jury awarded ACC $123,000 for amounts owed on
the trade receivable, but also awarded the customer $400,000 in compensatory
damages and $1,500,000 in punitive damages on its counterclaim. On June 25,
1997, the trial judge denied the Company's post trial motions for a judgment
notwithstanding the verdict or, in the alternate, a new trial. To avoid the
expense and disruption of continued protracted litigation, the Company
commenced negotiations to settle the matter during the third quarter of 1997.
In November 1997, a settlement was reached and the Company paid a settlement
amount of $600,000 to the plaintiff.

The Company is proceeding to investigate and remediate the environmental
condition of its St. Louis property in order that the property can be marketed
and sold. The work includes soil remediation required by the Missouri
Department of Natural Resources in connection with the closure of underground
storage tanks. The Missouri Department of Natural Resources has also requested
that an additional soil and groundwater contamination investigation plan be
submitted for the site to fully define the extent of groundwater contamination.
The Company accrues costs for an estimated environmental liability when
management becomes aware that a liability is probable and is able to reasonably
estimate the Company's cost. Generally, that occurs no later than when
feasibility studies and related cost assessments of remedial techniques are
completed, and the extent to which other potentially responsible parties (if
any), can be expected to contribute is determined. Outside consultants are
being used to perform site investigation work and to advise management on the
findings and remediation alternatives. In management's opinion, the liabilities
for the environmental matter mentioned above which are probable and reasonably
estimable are accrued. As of November 30, 1998, the environmental reserve was
approximately $220,000. The reserve is reflected as an adjustment to the
carrying value of the property held for sale. The actual costs to be incurred
by the Company will be dependent on final delineation of contamination, final
determination of remedial action required, negotiations with federal and state
agencies with respect to cleanup levels, changes in regulatory requirements,
innovations in investigatory and remedial technologies and effectiveness of
remedial technologies employed.




                                    F - 18
<PAGE>   37

A former employee of ACC has filed a workers' compensation claim related to
injuries incurred in connection with the August 1996 fire at the St. Louis
facility. In the claim, the employee is requesting payment of an additional 15%
award of compensation, approximately, $150,000, claiming ACC violated a
Missouri safety statute in connection with the occurrence of his injury. As of
November 30, 1998, the Company has not recorded a provision for this matter as
management intends to vigorously defend these allegations and believes the
payment of the penalty is not probable.

The Company is a party to other legal and environmental matters which have
arisen in the ordinary course of business. Management believes the ultimate
disposition of these matters will not have a material adverse effect on the
Company's financial position or results of operations.


12.  IMPAIRMENT
     ----------

As a result of the customer litigation described in Note 11 and continued
operating losses generated, during fiscal 1997, the Company considered several
alternatives for ACC's adhesives, private label and toll manufacturing business
including continuation of the current business, a bankruptcy filing for the
business, a sale of these operations, or a liquidation sale of the operations.
In connection with these considerations, the Company received an offer from a
third party to purchase selected assets of the adhesives, private label and
toll manufacturing business. Although no formal decision was made during the
third quarter of fiscal 1997, the Company concluded that it was unlikely that
the financial benefit, if any, which would inure to the benefit of the
shareholders justified the effort and related costs necessary to turnaround
ACC's operations. All of these factors were indications to management of the
possibility that the assets of ACC were impaired. Management's estimate of
future cashflows resulted in an amount which was less than the carrying value
of ACC assets. Accordingly, during the third quarter of the 1997 fiscal year,
the Company recorded a $324,000 impairment reserve to adjust the long-lived
assets of ACC to an estimate of their net realizable value. The impairment
reserve was based upon the Company's estimate of amounts to be realized upon
sale or possible liquidation of the assets. Management believed that for the
foreseeable future positive cashflow from ACC's operations was unlikely.

13.  DISCONTINUED OPERATIONS
     -----------------------

On November 30, 1997, the Company's Board of Directors signed an agreement to
sell certain assets of American Chemical Company's ("ACC") adhesive, private
label and toll manufacturing business and decided to account for such business
as a discontinued operation for all periods presented in accordance with
Accounting Principles Board No. 30, "Reporting the Results of Operations -
Reporting the Effects of a Disposal of a Segment of a Business, and
Extraordinary, Unusual and Infrequently Occurring Events and Transactions."

On January 14, 1998 the Company, ACC and a third party completed the sale of
certain assets (inventory and certain intangibles) of the discontinued business
and executed a three-year non-compete agreement. The consideration received of
approximately $1,350,000 includes a $300,000 promissory note bearing 8%
interest and due in three years and $350,000, for a three-year non-compete
agreement with the buyer. The cash consideration received in connection with


                                    F - 19
<PAGE>   38


the sale of inventory is reflected in the accompanying Condensed Consolidated
Statement of Cash Flows as Net Cash Provided by (Used in) Discontinued
Operations. The Company negotiated an early payment of the promissory not
during 1998. Cash received of $250,000 approximated the carrying value of the
note. The non-compete agreement is being amortized to income over the
three-year contract period. The unamortized portion of the non-compete
agreement of $116,667 and $126,391 are presented on the accompanying Condensed
Consolidated Balance Sheet as an Other Current and Non-current Liability,
respectively.

Included in the 1997 Loss from Discontinued Operations is the settlement of the
litigation (Note 11), the reserve for impairment of long-lived assets (Note
12), and additional amounts reserved aggregating approximately $425,000 related
to environmental contingencies and other commitments. The 1997 Loss on Disposal
of Discontinued Operations in the accompanying Consolidated Statement of
Operations reflects an estimate of operating losses expected to occur related
to the discontinued segment from the measurement date to the anticipated date
of disposal.

As of November 30, 1998, the remaining assets of the discontinued segment are
reflected as assets held for sale at net realizable value less costs to sell,
in the accompanying Consolidated Balance Sheet as Noncurrent Assets
Discontinued Operations. The operating activity of the discontinued segment
ceased during the second quarter of 1998. Net sales of the discontinued segment
were $722,879 and $5,762,053 for period in 1998 and fiscal 1997, respectively.
The 1998 losses of $454,059 have been reflected as a reduction to the Accrued
Liabilities Related to Discontinued Operations in the accompanying Condensed
Consolidated Balance Sheet. Operating results for this business are consistent
with the Company's prior estimate of these amounts.






                                    F - 20

<PAGE>   39
                                   SIGNATURES

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

Dated:   February 12, 1999

                   COHESANT TECHNOLOGIES INC.

                   BY:  /s/ Morton A. Cohen
                       ---------------------
                       Morton A. Cohen
                       Chairman of the Board of Directors

         PURSUANT to the requirements of the Securities Exchange Act of 1934,
as amended, this Report has been signed by the following persons on behalf of
the Registrant and in the capacities and on the dates indicated.
<TABLE>

<S>                          <C>                                                   <C> 
/s/ Morton A. Cohen          Chairman of the Board of Directors                    February 12, 1999
-------------------
Morton A. Cohen

/S/ Dwight D. Goodman        President and Chief Executive Officer                 February 12, 1999
---------------------        (Principal Executive Officer) and Director
Dwight D. Goodman            

/s/ Michael L. Boeckman      Director                                              February 12, 1999
-----------------------
Michael L. Boeckman

/s/ Morris H. Wheeler        Director                                              February 12, 1999
---------------------
Morris H. Wheeler

/s/ Richard L. Immerman      Director                                              February 12, 1999
-----------------------
Richard L. Immerman

/s/ Robert W. Pawlak         Chief Financial Officer                               February 12, 1999
--------------------         (Principal Financial and
Robert W. Pawlak             Accounting Officer)
</TABLE>