<Page>

--------------------------------------------------------------------------------

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                     AMENDMENT NO. 1 TO QUARTERLY REPORT ON
                                   FORM 10-Q/A

(X)      Quarterly report pursuant to Section 13 or 15(d) of the Securities
         Exchange Act of 1934 for the quarterly period ended June 30, 2001

         or

( )      Transition report pursuant to Section 13 or 15(d) of the Securities
         Exchange Act of 1934.


                                     0-21818
                         ------------------------------
                              (Commission File No.)

                             DAW TECHNOLOGIES, INC.
         --------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

           UTAH                                                 87-0464280
------------------------------                           -----------------------
(State or other jurisdiction                                   (IRS Employer
of incorporation or organization)                            Identification No.)

                               2700 SOUTH 900 WEST
                           SALT LAKE CITY, UTAH 84119
         --------------------------------------------------------------
          (Address of principal executive offices, including zip code)

       Registrant's telephone number, including area code: (801) 977-3100



         Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 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 the past 90 days. Yes (X) No ( )

         As of August 14, 2001, the Registrant had 3,759,303 shares of Common
Stock, $0.01 par value, outstanding.

--------------------------------------------------------------------------------

<Page>

This amendment on Form 10-Q/A amends the Items 1 and 2 of Part I and Item 6 of
Part II of the Quarterly Report for Daw Technologies, Inc. (the "Company") on
Form 10-Q previously filed for the quarter ended June 30, 2001. This Quarterly
Report on Form 10-Q/A is filed in connection with the Company's restatement of
its financial statements for the quarters ended March 31, 2000, June 30, 2000,
September 30, 2000, March 31, 2001 and June 30, 2001 as well as for the years
ended December 31, 1999 and 2000. Financial statement information and related
disclosures included in this amended filing reflect, where appropriate, changes
as a result of the restatements. All other information contained in this
Quarterly Report on Form 10-Q/A is as of the date of the original filing. The
restated financial information as of December 31, 2000 and for the three and six
months ended June 30, 2001 contained herein should be read in conjunction with
the applicable amended filings for those periods.

                             Daw Technologies, Inc.

                                TABLE OF CONTENTS
<Table>
<S>                                                                                                              <C>
PART I    FINANCIAL INFORMATION.................................................................................  1


Item 1.   Financial Statements

          Condensed Consolidated Balance Sheets - June 30, 2001 and
          December 31, 2000 (unaudited).........................................................................  1

          Condensed Consolidated Statements of Operations - Three and six months
          ended June 30, 2001 and 2000 (unaudited)..............................................................  2

          Condensed  Consolidated  Statements  of Cash  Flows - Six months  ended June 30,  2001 and 2000
          (unaudited)...........................................................................................  3

          Notes to Condensed Consolidated Financial Statements (unaudited)......................................  5


Item 2.   Management's Discussion and Analysis of Financial Condition and
          Results of Operations................................................................................  12




PART II OTHER INFORMATION......................................................................................  17

Item 6.   Exhibits and Reports on Form 8-K...................................................................... 17


Signatures...................................................................................................... 18
</Table>

<Page>

                         PART I - FINANCIAL INFORMATION

ITEM 1.   FINANCIAL STATEMENTS

                     Daw Technologies, Inc. and Subsidiaries
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                        (in thousands, except share data)
                                   (unaudited)

<Table>
<Caption>
                                                                                             June 30,         December 31,
ASSETS                                                                                         2001              2000
                                                                                        ------------------  ----------------
                                                                                            (as restated)     (as restated)
<S>                                                                                     <C>                 <C>
CURRENT ASSETS:
    Cash and cash equivalents                                                            $       4,293     $        2,175
    Restricted cash                                                                                741                  -
    Accounts receivable, net                                                                     9,921              7,347
    Costs and estimated earnings in excess
       of billings on contracts in progress                                                      3,008              6,109
    Inventories, net                                                                             1,672              1,977
    Deferred income taxes                                                                          425                425
    Other current assets                                                                         1,014              2,827
                                                                                          ----------------  ----------------
             Total current assets                                                               21,074             20,860

PROPERTY AND EQUIPMENT, NET                                                                      1,670              2,034

DEFERRED INCOME TAXES                                                                            3,364              3,364

OTHER ASSETS                                                                                       790                835
                                                                                          ----------------  ----------------
                                                                                         $      26,898     $       27,093
                                                                                          ================  ================
LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
    Checks written in excess of cash                                                     $           -     $           22
    Accounts payable and accrued liabilities                                                     9,553              8,868
    Billings in excess of costs and estimated
       earnings on contracts in progress                                                         2,183              1,994
    Line of credit                                                                               3,240              2,603
    Current portion of capital lease obligations                                                   178                 88
                                                                                          ----------------  ----------------
             Total current liabilities                                                          15,154             13,575

CAPITAL LEASE OBLIGATIONS, less current portion                                                     73                 99

COMMITMENTS AND CONTINGENCIES

REDEEMABLE PREFERRED STOCK:
     3%Series A Redeemable Convertible Preferred stock, authorized 10,000,000
       shares of $0.01 par value; 411 and 465 shares issued and outstanding,
       respectively                                                                              3,617              4,093

SHAREHOLDERS' EQUITY:
    Common stock, authorized 50,000,000 shares of $0.01 par value; 3,759,303 and
       3,424,018 shares issued and outstanding, respectively                                        38                 34
    Additional paid-in capital                                                                  20,364             19,863
    Common stock warrants                                                                          350                350
    Accumulated deficit                                                                        (12,151)           (10,560)
    Accumulated other comprehensive loss                                                          (547)              (361)
                                                                                          ----------------  ----------------
             Total shareholders' equity                                                          8,054              9,326
                                                                                          ----------------  ----------------
                                                                                         $      26,898     $       27,093
                                                                                          ================  ================
</Table>

     See accompanying notes to condensed consolidated financial statements.


                                       1
<Page>

                     Daw Technologies, Inc. and Subsidiaries

                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                        (in thousands, except share data)
                                   (unaudited)

<Table>
<Caption>
                                                                  Three months ended               Six months ended
                                                                      June 30,                        June 30,
                                                             ----------------------------   ------------------------------
                                                                 2001           2000             2001            2000
                                                             -------------  -------------   --------------  --------------
                                                             (as restated)  (as restated)   (as restated)   (as restated)
<S>                                                        <C>              <C>             <C>             <C>
Revenue, net                                                 $    12,160    $    14,637     $    27,049     $    29,777
Cost of goods sold                                                11,317         12,491          24,639          26,619
                                                             -------------  -------------   --------------  --------------
           Gross profit                                              843          2,146           2,410           3,158
                                                             -------------  -------------   --------------  --------------
Operating expenses:
    Selling, general and administrative                            1,041          1,310           2,085           2,379
    Research and development                                          75              -             162               -
    Depreciation and amortization                                    140            107             235             264
                                                             -------------  -------------   --------------  --------------
           Total operating expenses                                1,256          1,417           2,482           2,643
                                                             -------------  -------------   --------------  --------------

           Income (loss) from operations                            (413)           729             (72)            515

Other income (expense):
    Interest expense                                                (130)          (223)           (270)           (415)
    Other, net                                                      (373)            11            (737)             70
                                                             -------------  -------------   --------------  --------------
           Other expense, net                                       (503)          (212)         (1,007)           (345)
                                                             -------------  -------------   --------------  --------------

           Income (loss) before provision for income taxes          (916)           517          (1,079)            170
Provision for income taxes                                           233            251             432             251
                                                             -------------  -------------   --------------  --------------
           NET INCOME (LOSS)                                 $    (1,149)   $       266     $    (1,511)    $       (81)
                                                             =============  =============   ==============  ==============

Net income (loss) per common share:
    Basic                                                    $     (0.31)   $     (0.71)    $     (0.43)    $     (0.84)
    Diluted                                                        (0.31)         (0.71)          (0.43)          (0.84)
Weighted-average common shares outstanding:
    Basic                                                       3,755,563     3,296,467       3,678,763       3,218,810
    Diluted                                                     3,755,563     3,296,467       3,678,763       3,218,810
</Table>

     See accompanying notes to condensed consolidated financial statements.


                                       2
<Page>

                     Daw Technologies, Inc. and Subsidiaries

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                        (in thousands, except share data)
                                   (unaudited)

<Table>
<Caption>
                                                                                              Six months ended
                                                                                                  June 30,
                                                                                        ------------------------------
                                                                                            2001             2000
                                                                                       --------------  ---------------
<S>                                                                                    <C>             <C>
Increase (decrease) in cash and cash equivalents (as restated) (as restated)            (as restated)    (as restated)
    Cash flows from operating activities:
       Net loss                                                                        $    (1,511)    $       (81)
       Adjustments to reconcile net loss to net
         Cash provided by operating activities:
           Depreciation and amortization                                                       472             697
           Loss on disposal of property and equipment                                          201               -
           Provision for losses on accounts receivable                                         160               2
           Deferred income taxes                                                                 -             110
           Changes in current assets and liabilities:
              Restricted cash                                                                 (741)              -
              Accounts receivable                                                           (2,844)           (966)
              Costs and estimated earnings in excess
                of billings on contracts in progress                                         2,701          (3,573)
              Inventories                                                                      419             402
              Other assets                                                                   1,725             115
              Accounts payable and accrued liabilities                                         946             212
              Billings in excess of costs and estimated
                earnings on contracts in progress                                              273           1,111
                                                                                       --------------  ---------------
    Net cash provided by (used by) operating activities                                      1,801          (1,971)
                                                                                       --------------  ---------------
    Cash flows from investing activities
       Purchase of property and equipment                                                     (159)           (137)
       Proceeds from sale of property and equipment                                              -             154
                                                                                       --------------  ---------------
    Net cash provided by (used in) investing activities                                       (159)             17
                                                                                       --------------  ---------------
</Table>

     See accompanying notes to condensed consolidated financial statements.


                                       3
<Page>

                     Daw Technologies, Inc. and Subsidiaries

           CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED
                        (in thousands, except share data)
                                   (unaudited)

<Table>
<Caption>
                                                                                                Six months ended
                                                                                                    June 30,
                                                                                        ---------------------------------
                                                                                              2001              2000
                                                                                       -----------------  ---------------
<S>                                                                                    <C>                <C>
    Increase (decrease) in cash and cash equivalents                                     (as restated)      (as restated)

    Cash flows from financing activities:
       Decrease in checks written in excess of cash in bank                            $        (22)             (248)
       Net change in line of credit                                                             637            (1,049)
       Proceeds from issuance of stock                                                            -             5,035
       Payments on capital lease obligations                                                    (28)             (191)
                                                                                       -----------------  ---------------
    Net cash provided by financing activities                                                   587             3,547
                                                                                       -----------------  ---------------
    Effect of foreign exchange rates on cash and cash equivalents                              (111)              (46)
                                                                                       -----------------  ---------------
    Net increase in cash and cash equivalents                                                 2,118             1,547
Cash and cash equivalents at beginning of period                                              2,175               296
                                                                                       -----------------  ---------------
Cash and cash equivalents at end of period                                             $      4,293       $     1,843
                                                                                       =================  ===============

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

Cash paid during the period for:
     Interest                                                                          $        270       $       415

NONCASH INVESTING AND FINANCING ACTIVITIES

During the six months ended June 30, 2001, the Company entered into capital
lease obligations of $92.

During the six months ended June 30, 2001, 54 shares of Series A Redeemable
Convertible preferred stock with a carrying value of $475 were converted into
327,312 shares of common stock.

During the six months ended June 30, 2001, 7,973 shares of common stock with a
carrying value of $30 were issued as part of a preferred stock dividend.
</Table>

The Company accrued dividends of $25 on its 3% Series A convertible preferred
stock.

The Company recorded an imputed dividend of $2,593 from the beneficial
conversion feature on its 3% Series A convertible preferred stock.

The Company completed its acquisition of another company by issuing 618,439
shares of Common Stock.

     See accompanying notes to condensed consolidated financial statements.


                                       4
<Page>

                     Daw Technologies, Inc. and Subsidiaries

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                        (in thousands, except share data)
                                   (unaudited)

1.       INTERIM CONSOLIDATED FINANCIAL STATEMENTS AND RESTATEMENT

The accompanying unaudited condensed consolidated financial statements have been
prepared by Daw Technologies, Inc. and Subsidiaries (the "Company" or "Daw") in
accordance with accounting principles generally accepted in the United States
for interim financial reporting and the instructions to Form 10-Q and Rule 10-01
of Regulation S-X. Accordingly, certain information and footnote disclosures
normally included in financial statements prepared under accounting principles
generally accepted in the United States have been condensed or omitted pursuant
to such regulations. In the opinion of management, all adjustments considered
necessary for a fair presentation of the Company's financial position, results
of operations and cash flows have been included. All such adjustments are of a
normal recurring nature. These financial statements and footnote disclosures in
this Form 10-Q/A for the three and six months ended June 30, 2001 should be read
in conjunction with the Company's annual report on Form 10-K, as amended for the
year ended December 31, 2000. The results of operations for the three and six
months ended June 30, 2001 may not be indicative of the results that may be
expected for the year ending December 31, 2001.

In November 2001, the Company determined that the consolidated financial
information for the years ended December 31, 1999 and 2000 and the related
quarterly information for 2000 and first two quarters of 2001 contained errors
which required restatement of previously reported financial information. The
errors resulted primarily from the Company not properly reconciling the accounts
of its foreign operations. The errors generally resulted from the following
items:

         -   Foreign currency translation and transaction gains/loss related to
             foreign operations were not properly considered and accounted for.

         -   Errors in recognizing revenue and costs on various construction
             projects using percentage of completion accounting. These errors
             consisted of not recognizing a loss on a project in the period when
             it was determined; unsupported budgeted revenues, costs and
             progress billing information contained in the Company's revenue
             recognition spreadsheets which in turn resulted in errors in the
             calculation and recognition of revenue and costs; and failure to
             properly accrue known costs on projects when incurred which
             resulted in improper revenue recognition.

         -   Errors resulting from differences in intercompany accounts that
             when reconciled resulted in expenses that should have been recorded
             in the financial statements.

         -   Adjustments to properly amortize leasehold improvements over the
             lesser of the estimated useful life or the life of the lease.
             Previously, the leasehold improvements were being amortized over a
             period in excess of the original life of the lease.

         -   Certain reclassifications to balance sheet captions were made based
             upon analyzing the accounts. This included the reclassification of
             preferred stock to redeemable preferred stock and recording
             preferred stock dividends and the beneficial conversion feature in
             retained earnings and additional paid in capital.


                                       5
<Page>

The effect of the restatements for the years ended December 31, 1999 and 2000 is
described in amended filings on Form 10-K/A or Form 10-Q/A for the applicable
quarterly periods. The following is a summary of the effects of such
restatements on the Company's consolidated financial statements as of June 30,
2001 and for the three and six months ended June 30, 2001:

<Table>
<Caption>
                                                                        As
                                                                    Previously        As
                                                                     Reported      Restated
                                                                    ---------      --------
<S>                                                                 <C>            <C>
          Consolidated balance sheet:
            Current assets                                           $ 27,514       $ 21,074
            Total assets                                               34,856         26,898
            Current liabilities                                        15,497         15,154
            Redeemable preferred stock                                    -            3,617
            Total shareholders' equity                                 19,308          8,054

          Consolidated statement of shareholders' equity:
            Common stock                                             $     38      $      38
            Additional paid-in capital and warrants                    21,705         20,714
            Accumulated deficit                                        (2,435)       (12,151)
            Accumulated other comprehensive loss                          -             (547)
            Total shareholders' equity                                 19,308          8,054
</Table>

<Table>
<Caption>
                                                             Three months ended            Six months ended
                                                                June 30, 2001                June 30, 2001
                                                          -----------------------------------------------------
                                                              As                           As
                                                          Previously         As        Previously         As
                                                           Reported       Restated      Reported       Restated
                                                           --------       --------      --------       --------
<S>                                                       <C>             <C>          <C>             <C>
Consolidated statement of operations:
  Revenue, net                                              $13,575        $12,160       $27,605        $27,049
  Gross profit                                                1,717            843         3,224          2,410
  Total operating expenses                                    1,359          1,256         2,462          2,482
  Other expense, net                                           (198)          (503)         (289)        (1,007)
  Income (loss) before income taxes                             160           (916)          473         (1,079)
  Net income (loss)                                             101         (1,149)          297         (1,511)
  Net income (loss) available to common
   shareholders                                                  70         (1,182)          234         (1,591)
  Net income (loss) per common share - diluted            $    0.02   $     (0.31)    $    0.05     $     (0.43)
</Table>


                                       6
<Page>

2.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts and operations of the
Company and its wholly owned subsidiaries, Daw Technologies France, which was
organized in 2000, Daw Technologies Europe Ltd., which was organized in 1999,
and Translite Systems, Inc., (inactive) which was organized in 1999. All
significant intercompany balances and transactions have been eliminated in
consolidation.

TRANSLATION OF FOREIGN CURRENCIES

The functional currency for the Company's foreign operations is the British
Sterling. The financial statements of the Company's foreign subsidiaries are
translated into U.S. Dollars in accordance with Statement of Financial
Accounting Standards No. 52 "FOREIGN CURRENCY TRANSLATION". Assets and
liabilities of the foreign subsidiaries are translated into the U.S. Dollar at
the exchange rate at the end of each reporting period. Income and expense items
are translated at the weighted average exchange rates for the period.
Translation gains and losses are reflected as a separate component of
shareholders' equity as accumulated other comprehensive loss. Foreign currency
transaction gains and losses are reported in the accompanying consolidated
statements of operations

ACCOUNTING FOR LONG-TERM CONTRACTS

Revenue recorded for contracts in the accompanying financial statements is
recognized using the percentage-of-completion method and, therefore, takes into
account the costs, estimated earnings and revenue to date on contracts not yet
completed. The revenue recognized is that portion of the total contract price
that cost incurred to date bears to anticipated final total cost, based on
current estimates of costs to complete. Revenue from cost-plus-fixed-fee
contracts is recognized on the basis of costs incurred during the period plus
the fee earned, measured by the cost-to-cost method.

Contract costs include all direct and allocable indirect labor, benefits,
materials unique to or installed in the project, subcontractor cost allocations,
including employee benefits and equipment expense. At the time a loss on a
contract becomes known, the entire amount of the estimated ultimate loss is
recognized in the financial statements. As long-term contracts extend over one
year, revisions in cost and earnings estimates during the course of the work are
reflected in the accounting period in which the facts become known which require
the revision. Costs attributable to contract claims or disputes are carried in
the accompanying balance sheets only when realization is probable. These costs
are recorded at the lesser of actual costs incurred or the amount expected to be
realized. It is reasonably possible that estimates by management related to
contracts can change in the future.

The current asset, costs and estimated earnings in excess of billings on
contracts in progress, represents revenue recognized in excess of amounts billed
(unbilled revenue). The current liability, billings in excess of costs and
estimated earnings on contracts in progress, represents billings in excess of
revenue recognized (unearned revenue). The amount of revenue recognized is not
related to the progress billings to customers.

OTHER REVENUE RECOGNITION

The Company recognizes revenue on its other product sales and contract
manufacturing services when the product is shipped and title passes to the
customer or when the services are performed.


                                       7
<Page>

CASH AND CASH EQUIVALENTS

The Company considers all highly liquid instruments with an original maturity of
three months or less to be cash equivalents.

ACCOUNTS RECEIVABLE

Accounts receivable consist of the following:

<Table>
<Caption>
                                                                                 June 30,        December 31,
                                                                                   2001              2000
                                                                              ---------------  ----------------
<S>                                                                           <C>              <C>
         Contract receivables                                                 $    9,757       $      7,533
         Retention receivables                                                       379                143
                                                                              ---------------  ----------------
                                                                                  10,136              7,676
         Less allowance for doubtful accounts                                       (215)              (329)
                                                                              ---------------  ----------------
         Total                                                                $    9,921       $      7,347
                                                                              ===============  ================
</Table>

Many of the Company's contracts require retentions, typically 5-10 percent of
the amount billed, to be withheld from each progress payment by the customer
until the project reaches substantial completion. Earned, but unbilled retention
amounts are included in retention receivables.

INCOME TAXES

The Company utilizes the liability method of accounting for income taxes. Under
the liability method, deferred tax assets and liabilities are determined based
on differences between financial reporting and tax bases of assets and
liabilities and are measured using the enacted tax rates and laws that will be
in effect when the differences are expected to reverse. An allowance against
deferred tax assets is recorded when it is more likely than not that such tax
benefits will not be realized. Research tax credits are recognized as utilized.

REVERSE STOCK SPLIT

On May 30, 2001, the Company's shareholders approved a one-for-four reverse
stock split of the Company's outstanding common stock shares. The par value of
the common stock was not affected by the reverse stock split and remains at $.01
per share after the reverse stock split. Consequently, the aggregate par value
of the issued common stock was reduced by reclassifying the par value amount of
the reversed common shares from common stock to additional paid-in capital for
all periods presented. All per share amounts and outstanding shares, including
all common stock equivalents (stock options, warrants and preferred stock), have
been retroactively restated in the accompanying financial statements and notes
to consolidated financial statements for all periods presented to reflect the
reverse stock split.

NET INCOME (LOSS) PER COMMON SHARE

The Company follows the provisions of Statement of Financial Accounting
Standards ("SFAS") No. 128 "Earnings Per Share". SFAS No. 128 requires the
presentation of basic and diluted earnings per share ("EPS"). Basic EPS is
calculated by dividing net income (loss) available to common shareholders by the
weighted-average number of common shares outstanding during each period. Diluted
EPS is similarly calculated, except that the weighted-average number of common
shares reflects the potential dilution that could occur if outstanding stock
options, warrants and preferred stock conversion features were exercised.


                                       8
<Page>

The following data show the shares used in computing net income (loss) per
common share including the effect on net income (loss) for preferred stock
dividends and the beneficial conversion feature associated with preferred stock.
For 2000, net income applicable to common stock include a non-cash imputed
dividend to the preferred shareholders related to the beneficial conversion
feature on the 2000 3% Series A Redeemable Convertible preferred stock. The
beneficial conversion feature is computed as the difference between the market
value of the common stock into which the preferred stock can be converted and
the value assigned to the preferred stock in the private placement. The imputed
dividend is a one-time, non-cash charge decreasing the net earnings per common
share. The following data also show the weighted average number of shares and
rights to acquire shares with dilutive potential.

<Table>
<Caption>
                                                       Three months ended                  Six months ended
                                                            June 30,                           June 30,
                                               -------------------------------    --------------------------------
                                                     2001           2000                2001             2000
                                               ---------------  --------------    ---------------  ----------------
<S>                                            <C>              <C>               <C>              <C>
Net income (loss)                               $   (1,149)      $       266        $   (1,511)     $       (81)

Dividends on preferred stock                           (33)              (25)              (80)             (25)

Imputed dividends from beneficial
  conversion feature                                     -            (2,593)                -           (2,593)
                                               ---------------  --------------    ---------------  ----------------
Net loss applicable to common stock             $   (1,182)      $    (2,352)       $   (1,591)     $    (2,698)
                                               ===============  ==============    ===============  ================

Weighted average number of common shares
  used in basic EPS                              3,755,563         3,296,467         3,678,763        3,218,810

Dilutive effect of stock options                         -                 -                 -                -

Dilutive effect of warrants                              -                 -                 -                -

Dilutive effect of preferred stock                       -                 -                 -                -
                                               ---------------  --------------    ---------------  ----------------
Weighted average number of common shares
  and dilutive potential common shares used
  in diluted EPS                                 3,755,563         3,296,467         3,678,763        3,218,810
                                               ===============  ==============    ===============  ================
</Table>

For the three and six month periods ended June 30, 2001 and 2000, all stock
options, warrants and preferred stock outstanding were not included in the
computation of diluted EPS because to do so would have been anti-dilutive. For
the three and six months ended June 30, 2000, 1,319,748 shares of preferred
stock are not included in the computation of diluted EPS because the imputed
dividend from the beneficial conversion causes the assumed conversion to be
anti-dilutive. The share data have been retroactively restated for the one for
four reverse stock split discussed in Note 6.

USE OF ESTIMATES

The preparation of financial statements in conformity with generally accepted
accounting principles in the United States requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expense during the reporting
period. Actual results could differ from those estimates.

RECLASSIFICATIONS

Certain reclassifications have been made to the 2000 financial statements to
conform with the 2001 presentation.


                                       9
<Page>

4.       LINE OF CREDIT

During the six months ended June 30, 2001, the Company maintained a revolving
line of credit with a domestic bank for the lesser of $4.0 million or the
available borrowing base. The interest rate is floating and is computed at prime
plus 4.5 percent (11.75% as of June 30, 2001). The line of credit requires
monthly payments of interest. The Company had $3,240 in borrowings against the
line at June 30, 2001 ($2,603 at December 31, 2000). The line of credit
originally matured on October 31, 1999 and has been extended several times, most
recently through January 31, 2002. The line of credit allows for borrowings
equal to 75% of the Company's eligible accounts receivable as determined by the
bank. Borrowings are secured by all assets of the Company. The line of credit
agreement contains restrictive covenants imposing limitations on payments of
cash dividends, purchases or redemptions of capital stock, indebtedness and
other matters. The most recent amendment included a reduction of the credit line
to $3.0 million as of September 1, 2001 and an additional fixed charge loan
covenant requiring a ratio of 1.25 to 1.00 on a year-to-date basis. As of June
30, 2001 the Company is in compliance with the new loan covenants. The Company
is currently reviewing several financing alternatives.

5.       SEGMENT INFORMATION

The Company had two reportable segments for the three months and six months
ended June 30, 2001 and 2000, namely 1) cleanrooms and related products and 2)
other manufactured goods and services. The Company evaluates performance of each
segment based on income or loss from operations. The Company's reportable
segments are similar in manufacturing processes and are tracked similarly in the
accounting system. The manufacturing process for each segment uses the same
manufacturing facilities and overhead is allocated similarly to each segment. It
is not practical to determine the total assets per segment and depreciation by
segment because each segment uses the same manufacturing facility. Identifiable
assets by segment are reported below. The Company allocates certain general and
administrative expenses, consisting primarily of facilities expenses, utilities,
and manufacturing overhead.

Segment information for the cleanrooms and related products and other
manufactured goods and services are as follows:

<Table>
<Caption>
                                                        Three months                       Six months
                                                       ended June 30,                    ended June 30,
                                               -------------------------------  --------------------------------
                                                    2001            2000             2001             2000
                                               -------------- ----------------  ---------------- ---------------
<S>                                            <C>            <C>               <C>              <C>
Revenue, net

    Cleanrooms and related products              $    9,818      $   9,915          $ 21,691        $ 20,851
    Other manufactured goods and
       Services                                       2,342          4,722             5,358           8,926
                                               -------------- ----------------  ---------------- -----------------
                 Totals                          $   12,160      $  14,637          $ 27,049        $ 29,777
                                               ============== ================  ================ =================

Income (loss) from operations:

    Cleanrooms and related products              $     (493)     $   1,060          $     72        $  2,221
    Other manufactured goods and
       Services                                          80           (331)             (144)         (1,706)
                                               -------------- ----------------  ---------------- -----------------
                 Totals                          $     (413)     $     729          $    (72)       $    515
                                               ============== ================  ================ =================


                                      10
<Page>

<Caption>

                                                  June 30,     December 31,
                                                    2001           2000
                                               -------------- ----------------
<S>                                            <C>            <C>
Total assets:

    Cleanrooms and related products              $  16,416       $  19,528
    Other manufactured goods and Services            2,532           1,712
    Manufacturing and corporate assets               7,950           5,853
                                               -------------- ----------------
              Totals                              $ 26,898       $  27,093
                                               ============== ================
</Table>


6.       SUBSEQUENT EVENTS

On May 30, 2001, the Company's shareholders approved a one-for-four reverse
stock split of the Company's outstanding common stock shares effective July 2,
2001. The par value of the common stock was not affected by the reverse stock
split and remains at $0.01 per share after the reverse stock split.
Consequently, the aggregate par value of the issued common stock was reduced by
reclassifying the par value amount of the reversed common shares from common
stock to additional paid-in capital for all periods presented. As of that date,
the total number of shares of common stock outstanding was reduced from
15,047,176 shares to 3,759,306 shares (subject to adjustment due to rounding up
of fractional shares), and the number of shares subject to outstanding warrants
and options granted by the Company was reduced from 1,536,950 shares to 385,113
shares (subject to adjustment due to rounding up of fractional shares). All per
share amounts and outstanding shares, including all common stock equivalents
(stock options and convertible subordinated notes), have been retroactively
restated in the accompanying condensed consolidated financial statements and
notes to condensed consolidated financial statements for all periods presented
to reflect the reverse stock split.

7.       COMPREHENSIVE INCOME (LOSS)

The following table reports comprehensive income (loss) for the three and six
months ended June 30, 2001 and 2000:

<Table>
<Caption>
                                                                                         Three months ended
                                                                                              June 30,
                                                                                      2001               2000
                                                                                 --------------   -----------------
<S>                                                                              <C>              <C>
       Net income (loss)                                                         $    (1,149)     $        266
       Foreign currency translation adjustment                                          (152)             (225)
                                                                                 --------------   -----------------
          Comprehensive income (loss)                                            $    (1,301)     $         41
                                                                                 ==============   =================
</Table>

<Table>
<Caption>
                                                                                          Six months ended
                                                                                              June 30,
                                                                                      2001               2000
                                                                                 --------------   -----------------
<S>                                                                              <C>              <C>
       Net loss                                                                  $    (1,511)     $        (81)
       Foreign currency translation adjustment                                          (186)             (276)
                                                                                 --------------   -----------------
          Comprehensive loss                                                     $    (1,697)     $       (357)
                                                                                 ==============   =================
</Table>


                                       11
<Page>

Item 2.      MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
             RESULTS OF OPERATIONS.


GENERAL

         The following discussion should be read in conjunction with the
financial statements and notes thereto included elsewhere herein. All data in
the tables are in thousands, except for percentages and per-share data.

         The Company's principal line of business is the design, manufacture and
installation of cleanroom components and integrated cleanroom systems, primarily
for the semiconductor industry. The Company also designs, manufactures and
installs cleanroom components and integrated cleanroom systems for other
industries, such as the pharmaceutical, flat panel display, disk drive,
biotechnology and food processing industries. The Company is a global leader in
the cleanroom installation business. In addition, the Company designs and
manufactures environmentally controlled "mini-environments," which range in size
from the size of a desk to the size of a bus. These mini-environments typically
house expensive automation and robotic equipment used in the semiconductor
manufacturing process or in pharmaceutical research and development. Finally,
the Company offers manufacturing and specialized painting services on a contract
basis, primarily to local and regional manufacturers and fabricators.

RESTATEMENTS

         In November 2001, the Company determined that the consolidated
financial information in the Company's Annual Reports on Form 10-K for the years
ended December 31, 1999 and December 31, 2000 as well as the unaudited interim
financial statements reported in the Company's Quarterly Reports on Form 10-Q
for the periods ended March 31, 2000, June 30, 2000, September 30, 2000, March
31, 2001 and June 30, 2001 had been incorrectly compiled and reported primarily
because of errors in the financial information reported by the Company's
European operations.

         Prior to October 1999, the Company's European operations was accounted
for at the Company's headquarters in the United States. In October 1999, the
Company formed a wholly owned European subsidiary in Scotland known as Daw
Technologies Europe Ltd. ("Daw Europe") to manage not only the UK subsidiary,
but all of the Company's European operations. At that time, all European
accounts were transferred to Daw Europe, who took over all of the accounting for
all of the Company's foreign operations.

         The accounting systems and personnel in the Daw Europe office were
unable to keep pace with the rapid growth experienced between 1999 and 2001
along with the growing complexity of the European business, including the fact
that most of this revenue growth occurred outside of the United Kingdom. As a
result, various problems occurred with respect to Daw Europe's accounting and
financial reporting.

         One of the problems that developed involved the Company's recognition
of revenue on construction projects. Daw recognizes revenue on its construction
projects using a percentage of completion methodology based on estimates of
percentage of completion. The primary accounting system used by Daw Europe did
not include a revenue recognition feature that would allow it to accurately
recognize revenue on its various projects based on percentage of completion. Daw
Europe therefore created a financial spreadsheet to account for the recognition
of revenue on its numerous European projects. This method of tracking and
accounting for work in process resulted in several problems, including the
following:


                                       12
<Page>

-   Some of the formulas in the spreadsheet did not properly calculate atypical
    situations, such as costs exceeding budget.

-   When the numbers derived from formulas seemed incorrect, accounting
    personnel would in some instances, override formulas in the spreadsheet by
    inputting numbers directly into the spreadsheet. This damaged the underlying
    integrity and reliability of the spreadsheet.

-   Budget estimates were not updated in the spreadsheets for currency
    fluctuations, and currency rates were only changed in the accounting system
    periodically.

-   The spreadsheet was not properly updated to reflect changes to contract
    terms.

         In addition to the problems with the spreadsheet maintained by Daw
Europe, there were also problems in the consolidation of European accounts with
the United States accounts. For example, European costs incurred through the
United States accounts were not properly considered in the consolidation
process, thus resulting in an understatement of costs and liabilities.

         Also, the Company noted that various projects in Israel were either not
recorded or were not properly recorded on the financial records of Daw Europe.
When Daw Europe recorded transactions associated with the Company's projects in
Israel, instead of obtaining objective accounting documentation, the accounting
personnel relied on informal data and statements by project managers. Some of
this informally gathered information proved to be incomplete and subsequently
required an adjustment.

         Finally, the restated financial statements also contain some
reclassifications and several other adjustments such as: (a) foreign currency
translation and transactions gains/losses related to foreign operations, (b)
intercompany errors and (c) amortization of leasehold improvements. A summary of
the effect of the restatements in the financial statements is described in Note
1 to the condensed consolidated financial statements.


                                       13
<Page>

RESULTS OF OPERATIONS (Data in the tables are in thousands)

Selected Financial Information

<Table>
<Caption>
                                                      Three months ended              Six months ended
                                                           June 30,                       June 30,
                                                  ---------------------------     --------------------------
                                                     2001           2000            2001           2000
                                                 ------------   -------------   -------------  -------------
<S>                                              <C>            <C>             <C>            <C>
Revenue, net..............................        $    12,160   $     14,637    $     27,049   $     29,777

Gross profit..............................                843          2,146           2,410          3,158

Operating expenses........................              1,256          1,417           2,482          2,643

Net income (loss).........................        $    (1,149)  $        266    $     (1,511)  $        (81)

<Caption>

                                                    June 30,     December 31,
                                                      2001          2000
                                                  ------------  -------------
<S>                                               <C>           <C>
BALANCE SHEET DATA:

Cash and cash equivalents..................       $     4,293   $      2,175

Working capital............................             5,920          7,285

Total assets...............................            26,898         27,093

Total liabilities..........................            15,227         13,674

Redeemable preferred stock.................             3,617          4,093

Total stockholders' equity.................             8,054          9,326
</Table>


DISCUSSION

         Revenue for the three months ended June 30, 2001 decreased by 16.9% to
$12.2 million compared to $14.6 million for three months ended June 30, 2000.
Revenues for the six months ended June 30, 2001 decreased by 9.2% to $27.0
million compared to $29.8 million for the six months ended June 30, 2000. The
decrease in revenues is primarily attributable to a decrease in capital spending
by the semiconductor industry following the recent semiconductor industry
downturn. The downturn resulted in fewer large cleanroom-related contract awards
during the first six months of 2001. During the first six months of 2001 the
Company's customers were building fewer large cleanroom-related facilities in
lieu of more numerous smaller facilities.

         Gross profit for the second quarter of 2001 decreased by 60.7% to $0.8
million from a gross profit of $2.1 million for the second quarter of 2000 and
decreased as a percentage of revenue to 6.9% for the second quarter of 2001 from
14.7% for the second quarter of 2000. Gross profit for the six months ended June
30, 2001 decreased by 23.7% to $2.4 million from a gross profit of $3.2 million
for the six months ended June 30, 2000 and decreased as a percentage of revenue
to 8.9% for the six months ended June 30, 2001 from 10.6% for the six months
ended June 30, 2000.

         The recent downturn in capital spending by the semiconductor industry
resulted in a price competitive bidding environment as well as fewer large
cleanroom projects to bid. The Company is continuing its strategy to outsource
cleanroom component parts, which management believes will enable the Company to
offer its customers a wider range of cleanroom solutions at competitive prices.
Management


                                       14
<Page>

hopes that this strategy will enable the Company to be more flexible in the
current environment and maintain its gross profit margins during the remainder
of 2001.

         The Company continues its efforts to develop revenue from sources
outside of the semiconductor industry by applying its product and engineering
expertise in advanced custom metal fabrication, airflow systems and composite
panel production. The Company may experience cost inefficiencies due to ramp-up
costs as a variety of non-semiconductor products are evaluated and tested.
However, it is the Company's objective to identify, manufacture and sell other
products that have high gross profit margin potential.

          During the year 2000 the Company developed a strategy to re-enter the
Asian market through the formation of a joint venture with one or more Asian
companies, and in March 2001 the Company announced that it had entered into a
letter of intent to form a joint venture company with three Chinese entities to
provide cleanroom design, engineering, construction and manufacturing services
in the People's Republic of China. Subsequent to signing the letter of intent, a
potential conflict of interest arose with respect to one of the prospective
members of the joint venture, and the joint venture was placed on hold. Although
the letter of intent has not been formally terminated or withdrawn, management
is now of the opinion that the joint venture announced in March 2001 will not
proceed as planned. However, the Company remains committed to developing a
presence in China. In that regard, the Company has been in contact with a number
of Chinese companies, with whom it is discussing business arrangements ranging
from licensing agreements to joint ventures.

         Selling, general and administrative expenses for the second quarter of
2001 decreased to $1.0 million compared to $1.3 million for the second quarter
of 2000, and decreased as a percentage of revenue to 8.6% for the second quarter
of 2001 from 8.9% for the second quarter of 2000. For the six months ended June
30, 2001, selling, general and administrative expenses decreased to $2.1 million
compared to $2.4 million for the six months ended June 30, 2000, and decreased
as a percentage of revenue to 7.7% for the six months ended June 30, 2001 from
8.0% for the six months ended June 30, 2000.

         The decrease in selling, general and administrative expenses was
largely the result of the Company's continued efforts to manage and reduce its
operating cost structure in response to the most recent semiconductor industry
downturn. The reduction was primarily the result of reduced payroll and related
expenses.

         Research and development expense for the second quarter of 2001
increased to $75,000 compared to $0 for the second quarter of 2000. Research and
development expense for the six months ended June 30, 2001 increased to $162,000
compared to $0 for the six months ended June 30, 2000. Although the Company's
strategy includes outsourcing cleanroom component parts, there has been an
increase in demand for several of the Company's component parts related to 300
mm cleanroom technology. As a result, the Company is moving forward in
increasing its research and development of 300 mm cleanroom component products.
The Company will continue to fund future research and development projects to
improve existing products or develop new products as part of its diversification
program.


                                       15
<Page>

         Depreciation and amortization expense, not included in cost of goods
sold, for the three months ended June 30, 2001 increased to $140,000 compared to
$107,000 for the three months ended June 30, 2000. Depreciation and amortization
expense for the six months ended June 30, 2001 decreased to $235,000 compared to
$264,000 for the six months ended June 30, 2000. The increase in depreciation
and amortization expense for the three months ended June 30, 2001 is primarily
due to depreciation associated with new equipment. The decrease in depreciation
and amortization expense for the six months ended June 30, 2001 is primarily due
to certain equipment becoming fully depreciated either before or during the
period.

         Interest expense for the three months ended June 30, 2001 decreased to
$130,000 compared to $223,000 for the three months ended June 30, 2000. Interest
expense for the six months ended June 30, 2001 decreased to $270,000 compared to
$415,000 for the six months ended June 30, 2000. The decreases in interest
expense during both the three and the six months ended June 30, 2001 are
primarily the result of a decrease in borrowings against the Company's line of
credit through June 30, 2001, compared with borrowings through the same period
during 2000.

         Other expense, net was $373,000 for the three months ended June 30,
2001 compared to other income of $11,000 for the three months ended June 30,
2000. Other expense, net was $737,000 for the six months ended June 30, 2001
compared to other income, net of $70,000 for the six months ended June 30, 2000.
The other expense, net for the three and six months ended June 30, 2001 resulted
from a loss on disposal of equipment and foreign currency transaction losses.

         The provision for income taxes for the periods resulted primarily from
the Company's foreign operations. For the three and six months ended June 30,
2001 the foreign operations had income before taxes of approximately $358,000
and $833,000, respectively.

LIQUIDITY AND CAPITAL RESOURCES

         Working capital at June 30, 2001 was $5.9 million compared to $7.3
million at December 31, 2000. This includes cash and cash equivalents of $4.3
million at June 30, 2001 and $2.2 million at December 31, 2000. The Company's
operations provided $1.8 million of cash during the six months ended June 30,
2001, compared to $2.0 million of cash used in operations during the six months
ended June 30, 2000. During the six months ended June 30, 2001, the Company
experienced increases in accounts receivable, billings in excess of costs and
estimated earnings on contracts in progress and the line of credit.

         In addition, the Company experienced decreases in costs and estimated
earnings in excess of billings on contracts in progress, other current assets
and inventories during the six months ended June 30, 2001. Included in the
decrease in other current assets of approximately $1.7 million was the
collection of approximately $1.1 million of a tax refund receivable in Israel.

         During the six months ended June 30, 2001, the Company maintained a
revolving line of credit with a domestic bank for the lesser of $4.0 million or
the available borrowing base. The interest rate is floating and is computed at
prime plus 4.5 percent (11.75% as of June 30, 2001). The line of credit requires
monthly payments of interest. The Company had $3,240 in borrowings against the
line at June 30, 2001 ($2,603 at December 31, 2000). The line of credit
originally expired October 31, 1999 and has been extended several times, most
recently through January 31, 2002. The line of credit allows for borrowings
equal to 75% of the Company's eligible accounts receivables as determined by the
bank. Borrowings are secured by all assets of the Company. The line of credit
agreement contains restrictive covenants imposing limitations on payments of
cash dividends, purchases or redemptions of capital stock, indebtedness and
other matters. The most recent amendment included a reduction of the credit line
to $3.0 million as of September 1, 2001 and an additional fixed charge loan
covenant requiring a ratio of 1.25 to 1.00 on a year-to-date basis. As of June
30, 2001 the Company is in compliance with the new loan covenants. The Company
is currently reviewing several financing alternatives.


                                       16
<Page>

         Management believes that existing cash balances, borrowings available
under the line of credit and cash generated from operations, will be adequate to
meet the Company's anticipated cash requirements through December 31, 2001.
However, in the event the Company experiences adverse operating performance,
above-anticipated capital expenditure requirements, or is unable to renew or
replace its existing line of credit, additional financing may be required. There
can be no assurance that such additional financing, if required, would be
available on favorable terms, if at all.

INFORMATION CONTAINED IN THIS REPORT CONTAINS "FORWARD-LOOKING STATEMENTS"
WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995,
WHICH CAN BE IDENTIFIED BY THE USE OF FORWARD-LOOKING TERMINOLOGY SUCH AS "MAY,"
"WILL," "SHOULD," "EXPECT," "ANTICIPATE," "HOPE," "ESTIMATE," OR "CONTINUE," OR
THE NEGATIVE THEREOF OR OTHER VARIATIONS THEREON OR COMPARABLE TERMINOLOGY.
THESE FORWARD-LOOKING STATEMENTS ARE SUBJECT TO RISKS AND UNCERTAINTIES THAT
INCLUDE, BUT ARE NOT LIMITED TO, THOSE IDENTIFIED IN THIS REPORT, DESCRIBED FROM
TIME TO TIME IN THE COMPANY'S OTHER SECURITIES AND EXCHANGE COMMISSION FILINGS,
OR DISCUSSED IN THE COMPANY'S PRESS RELEASES. ACTUAL RESULTS MAY VARY MATERIALLY
FROM EXPECTATIONS. THE COMPANY WILL NOT UPDATE FORWARD-LOOKING STATEMENTS,
EXCEPT AS REQUIRED BY LAW.

PART II - OTHER INFORMATION

Item 6.   EXHIBITS AND REPORTS ON FORM 8-K

                  (a)      Exhibits

<Table>
<Caption>
  EXHIBIT                                                                     INCORPORATED BY REFERENCE/
    NO.                           DESCRIPTION                           FILED HEREWITH (AND SEQUENTIAL PAGE #)
----------------    ----------------------------------------    -------------------------------------------------------
<S>                 <C>                                         <C>
      4.5           Articles of Amendment of the Articles       Form 10-Q for the quarter ended June 30, 2001,
                    of Incorporation                            Exhibit 4.5
</Table>

                  (a)      Reports on Form 8-K.

                           None.


                                       17
<Page>

                                   SIGNATURES

         Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized, on April 22, 2002.

                                 DAW TECHNOLOGIES, INC.


                                 By:   /s/ Donald K. McCauley
                                       -----------------------------------------
                                       Donald K. McCauley
                                       Executive Vice President, Chief Financial
                                       Officer, Principal Financial and
                                       Accounting Officer


                                       18