Exhibit No. 99.1
Form 10-KSB, 2001
Comet Technologies, Inc.
SEC File No. 0-26059

ITEM 1.  DESCRIPTION OF BUSINESS

General

The Company was organized for the purpose of creating a capital resource fund to
seek,  investigate,  and, if warranted,  acquire or  participate  in a favorable
business  opportunity.  Since the completion of the Company's public offering in
July 1986, the Company has reviewed and evaluated a number of business  ventures
for possible  acquisition or participation  by the Company.  The Company has not
entered into any agreement,  nor does it have any commitment or understanding to
enter into or become engaged in a transaction as of the date of this filing. The
Company continues to investigate, review, and evaluate business opportunities as
they  become  available  and will seek to acquire or become  engaged in business
opportunities  at  such  time  as  specific   opportunities  warrant.  To  date,
opportunities  have been made available to the Company  through its officers and
directors and through professional advisors including securities  broker-dealers
and through members of the financial community.  It is anticipated that business
opportunities will continue to be available primarily from these sources.

To a large extent, a decision to participate in a specific business  opportunity
may be made upon management's analysis regarding the quality of the other firm's
management  and  personnel,  the  asset  base of such  firm or  enterprise,  the
anticipated  acceptability of new products or marketing  concepts,  the merit of
the firms business plan, and numerous other factors which are difficult,  if not
impossible, to analyze through the application of any objective criteria.

Since its inception, the Company has had no active business operations,  and has
been  seeking  to acquire  an  interest  in a  business  with  long-term  growth
potential. The Company currently has no commitment or arrangement to participate
in a business  and cannot now predict what type of business it may enter into or
acquire.  It is emphasized  that the business  objectives  discussed  herein are
extremely  general and are not intended to be  restrictive  on the discretion of
the Company's management.

There  are no plans or  arrangements  proposed  or under  consideration  for the
issuance  or  sale  of  additional  securities  by  the  Company  prior  to  the
identification of an acquisition candidate. Consequently, management anticipates
that it may be able to participate in only one potential  business venture,  due
primarily to the Company's limited capital. This lack of diversification  should
be  considered  a  substantial  risk,  because it will not permit the Company to
offset potential losses from one venture against gains from another.

Selection of a Business

The  Company  anticipates  that  businesses  for  possible  acquisition  will be
referred by various sources, including its officers and directors,  professional
advisors,  securities  broker-dealers,   venture  capitalists,  members  of  the
financial  community,  and others who may  present  unsolicited  proposals.  The
Company  will not  engage  in any  general  solicitation  or  advertising  for a
business  opportunity,  and will rely on personal  contacts of its  officers and


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directors and their affiliates,  as well as indirect  associations  between them
and other business and professional  people. By relying on "word of mouth",  the
Company may be limited in the number of potential  acquisitions it can identify.
While it is not presently  anticipated that the Company will engage unaffiliated
professional  firms  specializing in business  acquisitions or  reorganizations,
such firms may be retained if  management  deems it in the best  interest of the
Company.

Compensation  to a finder or business  acquisition  firm may take various forms,
including one-time cash payments,  payments based on a percentage of revenues or
product sales volume, payments involving issuance of securities (including those
of the Company), or any combination of these or other compensation arrangements.
Consequently,  the Company is currently  unable to predict the cost of utilizing
such services.

The Company will not restrict its search to any particular  business,  industry,
or  geographical  location,  and  management  reserves the right to evaluate and
enter into any type of business in any location.  The Company may participate in
a newly organized business venture or a more established  company entering a new
phase of growth or in need of additional  capital to overcome existing financial
problems. Participation in a new business venture entails greater risks since in
many  instances  management  of such a venture will not have proved its ability,
the eventual  market of such  venture's  product or services  will likely not be
established, and the profitability of the venture will be unproved and cannot be
predicted  accurately.  If the Company  participates in a more  established firm
with  existing  financial  problems,  it may be  subjected  to risk  because the
financial  resources  of the Company may not be adequate to eliminate or reverse
the circumstances leading to such financial problems.

In seeking a business venture, the decision of management will not be controlled
by an attempt to take  advantage of any  anticipated  or  perceived  appeal of a
specific industry,  management group, product, or industry, but will be based on
the business  objective of seeking  long-term  capital  appreciation in the real
value of the  Company.  The Company will not acquire or merge with a business or
corporation in which the Company's officers,  directors,  or promoters, or their
affiliates or associates, have any direct or indirect ownership interest.

The analysis of new businesses will be undertaken by or under the supervision of
the officers and directors. In analyzing prospective businesses, management will
consider,  to the extent applicable,  the available  technical,  financial,  and
managerial  resources;  working capital and other prospects for the future;  the
nature of present  and  expected  competition;  the quality  and  experience  of
management services which may be available and the depth of that management; the
potential for further research,  development, or exploration;  the potential for
growth and expansion; the potential for profit; the perceived public recognition
or  acceptance  of  products,   services,   or  trade  or  service  marks;  name
identification; and other relevant factors.

The decision to participate in a specific  business may be based on management's
analysis  of the  quality of the other  firm's  management  and  personnel,  the
anticipated  acceptability of new products or marketing  concepts,  the merit of
technological changes, and other factors which are difficult, if not impossible,
to analyze through any objective criteria. It is anticipated that the results of
operations of a specific firm may not necessarily be indicative of the potential
for the future  because of the  requirement  to  substantially  shift  marketing
approaches,   expand   significantly,   change  product   emphasis,   change  or
substantially augment management, and other factors.

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The Company will analyze all available factors and make a determination based on
a composite of  available  facts,  without  reliance on any single  factor.  The
period  within  which  the  Company  may  participate  in a  business  cannot be
predicted  and will  depend  on  circumstances  beyond  the  Company's  control,
including the  availability of businesses,  the time required for the Company to
complete its  investigation  and analysis of  prospective  businesses,  the time
required to prepare  appropriate  documents  and  agreements  providing  for the
Company's participation, and other circumstances.

Acquisition of a Business

In implementing a structure for a particular business  acquisition,  the Company
may  become a party to a merger,  consolidation,  or other  reorganization  with
another  corporation  or entity;  joint venture;  license;  purchase and sale of
assets;  or purchase and sale of stock,  the exact nature of which cannot now be
predicted. Notwithstanding the above, the Company does not intend to participate
in a  business  through  the  purchase  of  minority  stock  positions.  On  the
consummation  of a  transaction,  it is likely that the present  management  and
shareholders of the Company will not be in control of the Company.  In addition,
a majority or all of the  Company's  directors  may, as part of the terms of the
acquisition transaction,  resign and be replaced by new directors without a vote
of the Company's shareholders.

In  connection  with  the  Company's  acquisition  of a  business,  the  present
shareholders  of the  Company,  including  officers  and  directors,  may,  as a
negotiated  element of the  acquisition,  sell a portion or all of the Company's
Common  Stock  held  by  them  at a  significant  premium  over  their  original
investment in the Company.  As a result of such sales,  affiliates of the entity
participating  in the business  reorganization  with the Company would acquire a
higher percentage of equity ownership in the Company. Management does not intend
to  actively  negotiate  for or  otherwise  require  the  purchase of all or any
portion of its stock as a condition to or in connection with any proposed merger
or  acquisition.  Although the Company's  present  shareholders  did not acquire
their  shares  of  Common  Stock  with a view  towards  any  subsequent  sale in
connection with a business  reorganization,  it is not unusual for affiliates of
the entity  participating in the  reorganization to negotiate to purchase shares
held by the present shareholders in order to reduce the amount of shares held by
persons no longer  affiliated  with the Company and thereby reduce the potential
adverse  impact on the public  market in the  Company's  common stock that could
result from substantial sales of such shares after the business  reorganization.
Public investors will not receive any portion of the premium that may be paid in
the foregoing circumstances.  Furthermore, the Company's shareholders may not be
afforded an opportunity  to approve or consent to any  particular  stock buy-out
transaction.

In the event sales of shares by present  shareholders of the Company,  including
officers and  directors,  is a  negotiated  element of a future  acquisition,  a
conflict of interest may arise because  directors  will be  negotiating  for the
acquisition  on behalf of the Company and for sale of their shares for their own
respective accounts. Where a business opportunity is well suited for acquisition
by the Company,  but affiliates of the business  opportunity  impose a condition
that  management  sell their  shares at a price which is  unacceptable  to them,
management  may not  sacrifice  their  financial  interest  for the  Company  to
complete the transaction. Where the business opportunity is not well suited, but
the price  offered  management  for their  shares  is high,  Management  will be
tempted to effect the acquisition to realize a substantial  gain on their shares
in the  Company.  Management  has not  adopted  any  policy  for  resolving  the
foregoing potential conflicts,  should they arise, and does not intend to obtain
an independent  appraisal to determine whether any price that may be offered for
their shares is fair.  Stockholders  must rely,  instead,  on the  obligation of
management  to fulfill  its  fiduciary  duty under  state law to act in the best
interests of the Company and its stockholders.

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It is anticipated that any securities issued in any such reorganization would be
issued in reliance on exemptions from registration  under applicable federal and
state securities laws. In some  circumstances,  however, as a negotiated element
of the transaction,  the Company may agree to register such securities either at
the time  the  transaction  is  consummated,  under  certain  conditions,  or at
specified times thereafter.  Although the terms of such registration  rights and
the number of securities,  if any, which may be registered  cannot be predicted,
it may be  expected  that  registration  of  securities  by the Company in these
circumstances would entail substantial  expense to the Company.  The issuance of
substantial  additional  securities  and their  potential  sale into any trading
market  which may  develop in the  Company's  securities  may have a  depressive
effect on such market.

While the actual  terms of a  transaction  to which the  Company  may be a party
cannot  be  predicted,  it may be  expected  that the  parties  to the  business
transaction  will find it desirable to structure the  acquisition as a so-called
"tax-free"  event under  sections 351 or 368(a) of the Internal  Revenue Code of
1986, (the "Code").  In order to obtain tax-free  treatment under section 351 of
the Code, it would be necessary  for the owners of the acquired  business to own
80% or more of the voting  stock of the  surviving  entity.  In such event,  the
shareholders  of the  Company  would  retain  less  than 20% of the  issued  and
outstanding  shares  of the  surviving  entity.  Section  368(a)(1)  of the Code
provides  for taxfree  treatment  of certain  business  reorganizations  between
corporate  entities  where  one  corporation  is  merged  with or  acquires  the
securities or assets of another corporation.  Generally, the Company will be the
acquiring corporation in such a business reorganization, and the tax-free status
of the transaction will not depend on the issuance of any specific amount of the
Company's voting securities.  It is not uncommon,  however, that as a negotiated
element of a  transaction  completed in reliance on section  368, the  acquiring
corporation  issue  securities  in such an amount that the  shareholders  of the
acquired  corporation will hold 50% or more of the voting stock of the surviving
entity.  Consequently,  there is a substantial possibility that the shareholders
of the Company  immediately  prior to the transaction would retain less than 50%
of the  issued  and  outstanding  shares  of the  surviving  entity.  Therefore,
regardless of the form of the business  acquisition,  it may be anticipated that
stockholders  immediately prior to the transaction will experience a significant
reduction in their percentage of ownership in the Company.

Notwithstanding the fact that the Company is technically the acquiring entity in
the foregoing  circumstances,  generally  accepted  accounting  principles  will
ordinarily  require that such transaction be accounted for as if the Company had
been acquired by the other entity owning the business and,  therefore,  will not
permit a write-up in the carrying value of the assets of the other company.

The manner in which the Company  participates  in a business  will depend on the
nature of the  business,  the  respective  needs and  desires of the Company and
other  parties,  the  management of the business,  and the relative  negotiating
strength of the Company and such other management.

The  Company  will  participate  in a business  only after the  negotiation  and
execution  of  appropriate  written  agreements.  Although  the  terms  of  such
agreements cannot be predicted,  generally such agreements will require specific
representations  and  warranties  by all of the parties  thereto,  will  specify
certain  events of default,  will detail the terms of closing and the conditions
which must be  satisfied  by each of the  parties  prior to such  closing,  will
outline the manner of bearing costs if the  transaction is not closed,  will set
forth remedies on default, and will include miscellaneous other terms.

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Operation of Business After Acquisition

The  Company's  operation  following  its  acquisition  of a  business  will  be
dependent on the nature of the business and the interest  acquired.  The Company
is unable to predict  whether the Company  will be in control of the business or
whether  present  management  will be in control of the  Company  following  the
acquisition.  It may be expected that the business will present  various  risks,
which cannot be predicted at the present time.

Governmental Regulation

It is  impossible  to predict the  government  regulation,  if any, to which the
Company may be subject until it has acquired an interest in a business.  The use
of assets  and/or  conduct of  businesses  which the Company  may acquire  could
subject it to environmental, public health and safety, land use, trade, or other
governmental regulations and state or local taxation. In selecting a business in
which to acquire an interest,  management  will  endeavor to  ascertain,  to the
extent of the limited  resources of the Company,  the effects of such government
regulation on the prospective business of the Company. In certain circumstances,
however,  such as the  acquisition of an interest in a new or start-up  business
activity,  it may not be  possible to predict  with any degree of  accuracy  the
impact of  government  regulation.  The  inability  to  ascertain  the effect of
government   regulation  on  a  prospective  business  activity  will  make  the
acquisition of an interest in such business a higher risk.

Competition

The  Company  will be  involved  in  intense  competition  with  other  business
entities,  many of which will have a competitive edge over the Company by virtue
of their stronger financial resources and prior experience in business. There is
no  assurance  that  the  Company  will  be  successful  in  obtaining  suitable
investments.

Employees

The Company is a  development  stage  company and  currently  has no  employees.
Executive  officers,  who are not compensated for their time  contributed to the
Company,  will  devote only such time to the affairs of the Company as they deem
appropriate,  which is  estimated  to be  approximately  20 hours  per month per
person.  Management of the Company expects to use  consultants,  attorneys,  and
accountants as necessary, and does not anticipate a need to engage any full-time
employees  so long as it is  seeking  and  evaluating  businesses.  The need for
employees and their availability will be addressed in connection with a decision
whether or not to acquire or participate in a specific business industry.











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