Exhibit 99.1

INDEPENDENT AUDITORS' REPORT

To
the Board of Directors
Carbon Fiber Technology, LLC:

We
have audited the accompanying balance sheet of Carbon Fiber Technology, LLC (the "Company") as of December 31, 2001, and the related statements of income, members' equity, and cash flows for
the year 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 audit.

We
conducted our audit in accordance with auditing standards generally accepted in the United States of America. 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
our audit provides a reasonable basis for our opinion.

In
our opinion, such financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2001, and the results of its operations and its cash
flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.

/s/
DELOITTE & TOUCHE LLP

San
Diego, California
April 4, 2002

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CARBON FIBER TECHNOLOGY, LLC

BALANCE SHEETS

DECEMBER 31, 2001 AND 2000

|                                    |                           | 2001                      |            | 2000     
|----------------------------------- | ------------------------- | ------------------------- | ---------- | ---------
|
|ASSETS                              |                           |                           |            |          
|CURRENT ASSETS:                     |                           |                           |            |          
|                                    | Cash and cash equivalents |                           | $          | 751,619  
|                                    | Accounts receivable       |                           |            | 1,109,189
|                                    | Inventories               |                           |            | 1,971,108
|                                    | Prepaid expenses          |                           |            | 1,083    
|                                    |                           |                           |            |          
|                                    |                           | Total current assets      |            |          
|PROPERTY, PLANT, AND EQUIPMENT, Net |                           |                           | 11,884,619 |          
|                                    |                           |                           |            |          
|TOTAL                               |                           | $                         | 15,717,618 |          
|                                    |                           |                           |            |          
|LIABILITIES AND MEMBERS' EQUITY     |                           |                           |            |          
|CURRENT LIABILITIES:                |                           |                           |            |          
|                                    | Accounts payable          |                           | $          | 240,408  
|                                    | Accrued expenses          |                           |            | 301,698  
|                                    |                           |                           |            |          
|                                    |                           | Total current liabilities |            |          
|MEMBERS' EQUITY                     |                           |                           | 15,175,512 |          
|                                    |                           |                           |            |          
|TOTAL                               |                           | $                         | 15,717,618 |          
|                                    |                           |                           |            |          

See notes to financial statements.

2

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CARBON FIBER TECHNOLOGY, LLC

STATEMENTS OF INCOME

YEARS ENDED DECEMBER 31, 2001 AND 2000 AND THE PERIOD FROM

OCTOBER 29, 1999 (INCEPTION) TO DECEMBER 31, 1999

|                            |  | 2001 |           | 2000 |   | Period from
October 29, 1999
(Inception) to
December 31,
1999
|--------------------------- |  | ---- | --------- | ---- | - | -------------------------------------------------------------
|
|SALES                       |  | $    | 8,782,902 |      | $ | 10,417,482                                                   
|COST OF SALES               |  |      | 8,425,095 |      |   | 9,933,966                                                    
|                            |  |      |           |      |   |                                                              
|GROSS PROFIT                |  |      | 357,807   |      |   | 483,516                                                      
|OTHER (EXPENSE) INCOME, Net |  |      | (17,312   | )    |   | 42,685                                                       
|                            |  |      |           |      |   |                                                              
|NET INCOME                  |  | $    | 340,495   |      | $ | 526,201                                                      
|                            |  |      |           |      |   |                                                              

See
notes to financial statements.

3

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CARBON FIBER TECHNOLOGY, LLC

STATEMENTS OF MEMBERS' EQUITY

YEARS ENDED DECEMBER 31, 2001 AND 2000 AND THE PERIOD FROM

OCTOBER 29, 1999 (INCEPTION) TO DECEMBER 31, 1999

|MEMBER CONTRIBUTIONS (Unaudited)       |                         | $ | 14,609,872 |         
|-------------------------------------- | ----------------------- | - | ---------- | --------
|                                       | Net income (Unaudited)  |   |            | 79,876  
|                                       |                         |   |           
|BALANCE, DECEMBER 31, 1999 (Unaudited) |                         |   | 14,689,748 |         
|                                       | Net income (Unaudited)  |   |            | 526,201 
|                                       |                         |   |           
|BALANCE, DECEMBER 31, 2000 (Unaudited) |                         |   | 15,215,949 |         
|                                       | Distribution to members |   |            | (380,932
|                                       | Net income              |   |            | 340,495 
|                                       |                         |   |           
|BALANCE, DECEMBER 31, 2001             |                         | $ | 15,175,512 |         
|                                       |                         |   |           

See
notes to financial statements.

4

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CARBON FIBER TECHNOLOGY, LLC

STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 2001 AND 2000 AND THE PERIOD FROM

OCTOBER 29, 1999 (INCEPTION) TO DECEMBER 31, 1999

|                                                     |                                                                                              | 2001                               |                     | 2000                                                 |           | Period from
October 29, 1999
(Inception) to
December 31,
1999 |         
|---------------------------------------------------- | -------------------------------------------------------------------------------------------- | ---------------------------------- | ------------------- | ---------------------------------------------------- | --------- | ------------------------------------------------------------- | --------
|
|CASH FLOWS FROM OPERATING ACTIVITIES:                |                                                                                              |                                    |                     |                                                      |           |                                                               |         
|                                                     | Net income                                                                                   |                                    | $                   | 340,495                                              |           | $                                                             | 526,201 
|                                                     | Adjustments to reconcile net income to net cash provided by (used for) operating activities: |                                    |                     |                                                      |           |                                                               |         
|                                                     |                                                                                              | Depreciation and amortization      |                     |                                                      | 1,136,179 |                                                               |         
|                                                     |                                                                                              | Loss on disposal of fixed assets   |                     |                                                      | 65,963    |                                                               |         
|                                                     |                                                                                              | Changes in assets and liabilities: |                     |                                                      |           |                                                               |         
|                                                     |                                                                                              |                                    | Accounts receivable |                                                      |           | (252,724                                                      | )       
|                                                     |                                                                                              |                                    | Inventories         |                                                      |           | (816,217                                                      | )       
|                                                     |                                                                                              |                                    | Prepaid expenses    |                                                      |           | (41                                                           | )       
|                                                     |                                                                                              |                                    | Deposits            |                                                      |           |                                                              |         
|                                                     |                                                                                              |                                    | Accounts payable    |                                                      |           | (82,137                                                       | )       
|                                                     |                                                                                              |                                    | Accrued expenses    |                                                      |           | 18,094                                                        |         
|                                                     |                                                                                              |                                    |                     |                                                      |           |                                                               |         
|                                                     |                                                                                              |                                    |                     | Net cash provided by (used for) operating activities |           |                                                               | 409,612 
|CASH FLOWS FROM INVESTING ACTIVITIES -               |                                                                                              |                                    |                     |                                                      |           |                                                               |         
|                                                     | Purchases of property, plant, and equipment                                                  |                                    |                     | (192,936                                             | )         |                                                               | (441,161
|CASH FLOWS FROM FINANCING ACTIVITIES:                |                                                                                              |                                    |                     |                                                      |           |                                                               |         
|                                                     | Member contributions                                                                         |                                    |                     |                                                     |           |                                                               |        
|                                                     | Distribution to members                                                                      |                                    |                     | (380,932                                             | )         |                                                               |        
|                                                     |                                                                                              |                                    |                     |                                                      |           |                                                               |         
|NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS |                                                                                              |                                    | (164,256            | )                                                    |           | 516,518                                                       |         
|CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD       |                                                                                              |                                    | 915,875             |                                                      |           | 399,357                                                       |         
|                                                     |                                                                                              |                                    |                     |                                                      |           |                                                               |         
|CASH AND CASH EQUIVALENTS, END OF PERIOD             |                                                                                              | $                                  | 751,619             |                                                      | $         | 915,875                                                       |         
|                                                     |                                                                                              |                                    |                     |                                                      |           |                                                               |         
|SUPPLEMENTAL DISCLOSURE OF NONCASH ACTIVITIES -      |                                                                                              |                                    |                     |                                                      |           |                                                               |         
|                                                     | Net assets contributed                                                                       |                                    |                     |                                                      |           |                                                               |         
|                                                     |                                                                                              |                                    |                     |                                                      |           |                                                               |         

See
notes to financial statements.

5

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CARBON FIBER TECHNOLOGY, LLC

NOTES TO FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2001 AND 2000 (Unaudited) AND THE PERIOD FROM

OCTOBER 29, 1999 (INCEPTION) TO DECEMBER 31, 1999 (Unaudited)

1.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES



6

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YearsBuilding

39Manufacturing equipment

5-10Office furniture and equipment

5-10




2.    ACCOUNTS RECEIVABLE

Accounts receivable consist of the following at December 31:

2001

2000(Unaudited)Billed accounts receivable

$
923,451

$
567,949Unbilled accounts receivable


185,738


288,516Accounts receivable

$
1,109,189

$
856,465


3.    INVENTORIES

Inventories consist of the following as of December 31:

2001

2000(Unaudited)Raw materials

$
398,810

$
639,620Work in process


306,418


291,682Finished goods


1,265,880


223,589Inventories

$
1,971,108

$
1,154,891


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4.    PROPERTY, PLANT, AND EQUIPMENT

Property, plant, and equipment consist of the following as of December 31:

2001

2000(Unaudited)Land

$
140,142

$
140,142Building


5,810,860


5,724,472Manufacturing equipment


8,287,259


7,943,145Office furniture and equipment


52,298


53,317Construction-in-progress





328,99014,290,559


14,190,066Less: accumulated depreciation and amortization


(2,405,940
)

(1,296,241
)Property, plant and equipment

$
11,884,619

$
12,893,825




5.    ACCRUED EXPENSES

Accrued expenses consist of the following as of December 31:

2001

2000(Unaudited)Salaries and wages

$
118,985

$
115,712Accrued bonuses


141,075


88,245Accrued material receipts





44,754Other


41,638


34,893Accrued expenses

$
301,698

$
283,604


6.    RELATED PARTY TRANSACTIONS



7.    EMPLOYEE BENEFIT PLAN



8

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8.    SUBSEQUENT EVENTS



9

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