State Of The Art, COSTA MESA

Nature of Business: Develops, produces, markets and supports high-end microcomputer accounting software.

Total Employees: 130

In Orange County: 130

Stock Listing in The Times: On NASDAQ as “SteArt”

Ticker Symbol: “SOTA”

Friday’s Close: $9.25

One-Week Change: Up $0.13

Analyst Review: “State Of The Art was recently ranked seventh among Forbes Magazine’s ‘200 Best Small Companies in America’ for 1991. The key to their business is their unique control of their distribution channel. Most companies market their software through retail stores and generic value added resellers, but because State Of The Art markets through CPAs--who are considered the experts in accounting--their products are thought of as the best. This company is healthy. They had an initial public offering in May at $9 per share. They have no debt and over approximately $2.25 per share--or $20 million--in cash. That cash is their firepower to fuel further growth through possible acquisitions of synergistic companies and/or products. The stock is a bargain and we recommend a buy.

--Steven C. DeLuca, analyst, Cruttenden & Co., Irvine

SALES VS. PROFITS

Fiscal year ending Dec. 31 Dec. 31 Dec. 31 3 Qtrs. 3 Qtrs. 1988 1989 1990 1990 1991 Net Sales $7.1 $11.0 $16.2 $10.7 $12.7 Net Profit (Loss) $1.3 $2.6 $3.1 $2.2 $2.9

Corporate Outlook: “There were three reason we went public: to provide liquidity to our early-stage investment partners, to increase our working an on-going program to define and target potential acquisitions, and we hope to prevail in that challenge in 1992. “ --David S. Samuels, chairman/CEO

RETURN ON INVESTMENT: 3-YEAR SUMMARY AND YEAR-TO-DATE

Fiscal year ending Dec. 31 Dec. 31 Dec. 31 3 Qtrs. 1988 1989 1990 1990 52-Week High N/A N/A N/A N/A 52-Week Low N/A N/A N/A N/A Book Value Per Share $0.09 $0.42 $0.88 $0.78 Price Per Share N/A N/A N/A N/A Net Earnings Per Share $0.15 $0.32 $0.39 $0.27 Price-to-Earnings Ratio N/A N/A N/A N/A Avg. Return on Investor Equity 56% 65% 49% 39%

Fiscal year ending 3 Qtrs. 1991 52-Week High $13.00 52-Week Low $7.25 Book Value Per Share $2.47 Price Per Share $8.00 Net Earnings Per Share $0.34 Price-to-Earnings Ratio 24:1 Avg. Return on Investor Equity 38%

* State Of The Art Inc. had its initial public offering May 23, 1991.

Source: State Of The Art Inc.

For more information call or write, State Of The Art Inc.: 56 Technology Drive South, Irvine, Calif., 92718. (714) 753-1222