<Page>

================================================================================

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-K/A
                                (AMENDMENT NO. 1)

/X/  Annual report pursuant to Section 13 or 15(d) of the Securities Exchange
     Act of 1934 for the fiscal year ended December 31, 1999 or

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

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

           UTAH                       0-21818                  87-0464280
----------------------------   ----------------------     ----------------------
(State or other jurisdiction   (Commission File No.)           (IRS Employer
   of incorporation)                                        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

           Securities registered pursuant to Section 12(b) of the Act:

                                      NONE

           Securities registered pursuant to Section 12(g) of the Act:

                                 Title of Class
                                 --------------
                          Common Stock, $0.01 Par Value

     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 / /

     Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of the Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. / /

     The aggregate market value of the Common Stock held by non-affiliates of
the Registrant, based upon the closing sale price of the Common Stock on the
NASDAQ National Market System on April 11, 2000, was approximately $14,166,439.
Shares of Common Stock held by each officer and director and by each person who
may be deemed to be an affiliate have been excluded.

     As of April 14, 2000, the Registrant had 12,832,454 shares of Common Stock
outstanding.

================================================================================

<Page>

     This amendment on Form 10-K/A amends Items 6, 7, 8 and 14 of the Annual
Report for Daw Technologies, Inc. (the "Company") on Form 10-K previously filed
for the year ended December 31, 1999. This Annual Report on Form 10-K/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 December
31, 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 Annual Report on Form
10-K/A is as of the date of the original filing.

                                TABLE OF CONTENTS

<Table>
<S>                                                                                                                 <C>
ITEM 6.   SELECTED FINANCIAL DATA....................................................................................2

ITEM 7.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS......................3

ITEM 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA...............................................................10

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K...........................................11
</Table>

<Page>

Information contained in this Report contains "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of 1996,
which can be identified by the use of forward-looking terminology such as "may,"
"will," "should," "expect," "anticipate," "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.

                                        1
<Page>

                                     PART 2

ITEM 6. SELECTED FINANCIAL DATA

       The following table sets forth selected financial data of the Company.
The summary financial data in the table is derived from the financial statements
of the Company. The data should be read in conjunction with the financial
statements, related notes and other financial information included therein (in
thousands, except per share data).

<Table>
<Caption>
                                                                          YEAR ENDED DECEMBER 31,
                                                  -------------------------------------------------------------------
                                                   1999(1)       1998         1997          1996           1995
                                                  ----------   ----------   ----------    -----------    -----------
<S>                                               <C>          <C>          <C>           <C>            <C>
STATEMENT OF OPERATIONS DATA:
Revenues................................          $   44,011   $   53,078   $   52,541    $   112,826    $    70,635
Cost of goods sold......................              44,050       51,223       47,272         97,364         63,484
                                                  ----------   ----------   ----------    -----------    -----------
Gross profit (loss).....................                 (39)       1,855        5,269         15,462          7,151
                                                  ----------   ----------   ----------    -----------    -----------
Selling, general and administrative
expenses................................               7,348        6,513        8,373         10,274          6,333
Research and development................                 214          293          246            282            255
Depreciation and amortization...........                 704          563          431            400            219
Restructuring charges...................               1,839            -            -              -              -
                                                  ----------   ----------   ----------    -----------    -----------
Total operating expenses................              10,105        7,369        9,050         10,956          6,807
                                                  ----------   ----------   ----------    -----------    -----------
Earnings (loss) from operations.........             (10,144)      (5,514)      (3,781)         4,506            344
Other income (expense), net.............                (677)        (483)        (344)           352            119
                                                  ----------   ----------   ----------    -----------    -----------
Earnings (loss) before income taxes.....             (10,821)      (5,997)      (4,125)         4,858            463

Income taxes (benefit)..................              (1,092)      (2,075)      (1,866)         1,548            176
                                                  ----------   ----------   ----------    -----------    -----------
NET EARNINGS (LOSS) ....................          $   (9,729)  $   (3,922)  $   (2,259)   $     3,310    $       287
                                                  ==========   ==========   ==========    ===========    ===========
Earnings (loss) per common share
    Basic...............................          $    (0.78)  $    (0.32)  $    (0.18)   $      0.27    $      0.02
    Diluted.............................          $    (0.78)  $    (0.32)  $    (0.18)   $      0.27    $      0.02

Weighted-average common and dilutive
common equivalent shares outstanding
    Basic...............................              12,502       12,440       12,416         12,350         12,148
    Diluted.............................              12,502       12,440       12,416         12,393         12,365

<Caption>
                                                                           DECEMBER 31,
                                                  -------------------------------------------------------------------
                                                     1999        1998         1997          1996           1995
                                                  ----------   ----------   ----------    -----------    -----------
<S>                                               <C>          <C>          <C>           <C>            <C>
BALANCE SHEET DATA:
Cash and cash equivalents................         $      296   $    2,140   $    5,802    $     3,258    $    5,885
Working capital..........................                973       10,674       15,248         17,112        15,431
Total assets.............................             24,875       30,841       32,364         49,495        40,072
Total liabilities........................             16,572       12,714       11,664         26,557        20,633
Total shareholders' equity...............              8,303       18,127       20,700         22,938        19,409
</Table>

     (1) Amounts for 1999 are presented as restated. See Item 7. Management's
     Discussion and Analysis of Financial Conditions and Results of
     Operations--Restatements.

                                        2
<Page>

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

     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.

GENERAL

     The Company's principal line of business is providing an integrated systems
solution of cleanrooms and cleanroom component systems for the semiconductor
industry. In recent years, the Company has typically had one to three
significant customers, each of whom accounted for approximately 10% or more of
the Company's annual revenues; these customers do not necessarily remain
significant in subsequent years. The semiconductor industry has been
historically cyclical in nature and continues to be adversely affected by the
industry downturn that began in the latter part of 1996. Capital spending by
semiconductor manufacturers has generally followed chip sales. As chip sales
increased from around $50 billion per year in the late 1980s to a peak of $150
billion in 1995, capital spending on equipment and facilities by the chip
manufacturers surged to $45 billion from about $12 billion during the same
period of time. As chip sales have declined over the past three years to about
$122 billion in 1999, capital spending on new equipment and facilities plunged
to less than $30 billion in 1998. The Company's recovery cycle in relation to
the award of cleanroom projects lags behind the semiconductor manufacturers'
recovery in relation to chip sales.

     The Company's operating results have been severely impacted by the reduced
capital spending of the semiconductor industry during the past three years.
While the industry has shown signs of recovery from time to time over the past
three years, it has been consistently disappointed by continued declines. The
downturn in 1999 generally resulted in fewer contracts available to bid, a
significant increase in price competition on contracts that were awarded, and
reduced margins on such contracts. However, beginning in the fourth quarter of
1999, the Company experienced growth in new contract awards resulting in an
increase in the Company's backlog from $12.8 million at December 31, 1998 to
$19.7 million at December 31, 1999. Additionally, during the first quarter of
2000, the Company has experienced a significant increase in contract bidding and
contract awards at significantly higher gross margins than at any time during
the three-year industry downturn.

     In response to the current downturn, management has continued to take steps
to reduce the Company's cost structure including an approximate 26% cut in wages
in 1999 as compared to 1998. Previously, in 1998, the Company reduced its work
force by more than fifty percent. During 2000, management will closely monitor
the Company's cost structure and take appropriate actions as considered
necessary, but will continue to develop state-of-the-art cleanroom technology,
provide world-class support to the Company's customers, and continue its
diversification strategy.

     In response to reduced revenue generated by the sale of cleanrooms, the
Company has recently undertaken several initiatives to expand its revenue base
beyond the semiconductor industry and to reduce its reliance on this
historically cyclical business. The Company has developed an air entrance system
used by large national retail chains in their new "superstores". Air entrances
are used in lieu of conventional swinging and sliding doors to help the store
maintain comfort in the front of the store, reduce liability and increase and
optimize the traffic flow in and out of the store. The Company's air entrance
system was developed by applying its advanced cleanroom air movement and
filtration technology resulting in a technically superior air entrance system.
This product also shows great promise of providing increased gross profit over
the next two years. Additionally, the Company has entered into several contract
manufacturing agreements whereby the Company manufactures products owned and
marketed by third parties. During the first quarter of 1998, the Company
announced its entrance into the transportation industry where it started
producing sleeper cabs for heavy-duty trucks. By applying similar wall panel
systems technology used in cleanrooms the Company produces a stronger, more
durable, and lighter weight product than traditional sleeper cabs. This
technology may eventually be applied to other products in the transportation
industry. It is the Company's objective to develop and maintain 40% of its
revenues from sources outside of the semiconductor industry by applying its
product and engineering expertise in custom metal fabrication, airflow systems
and panel production to similar type products used in other industries.

                                        3
<Page>

     The Company's revenue and operating results fluctuate substantially from
quarter to quarter depending on such factors as the timing of customer orders,
the timing of revenue and cost recognition, variations in contract mix, changes
in customer buying patterns, fluctuations in the semiconductor equipment market,
utilization of capacity, manufacturing productivity and efficiency, availability
of key components and trends in the economies of the geographical regions in
which the Company operates.

     The Company uses the percentage-of-completion method of accounting for its
long-term cleanroom contracts. The Company recognizes revenue in proportion to
the costs incurred to date in relation to the total anticipated costs. Revenue
recognized may not be the same as progress billings to the customer.
Underbillings are reflected in an asset account (costs and estimated earnings in
excess of billings on contracts in progress), and overbillings are reflected in
a liability account (billings in excess of costs and estimated earnings on
contracts in progress). Non-cleanroom revenue is generally recognized when the
products are shipped to the customer.

     The Company generates revenue in two geographic regions; North America and
Europe. Although risk of fluctuations in currency value does not affect such
dollar-denominated contracts, changes in the relative value of the dollar could
make the Company less competitive in various markets. Contracts to be performed
in Europe may be denominated in local currency, and the Company bears the risk
of changes in the relative value of the dollar and the local currencies.
Devaluation of world currencies against the U.S. dollar has created extreme
price competitiveness from Korean, Japanese, and German manufacturers and
integrators of systems. The Company has in the past and may in the future
attempt to hedge against currency fluctuations on contracts denominated in local
currencies. There can be no assurance, however, that such hedging will fully
insulate the Company from fluctuations or will not expose the Company to
additional risks of loss.

     The Company's business and operations have not been materially affected by
inflation during the periods for which financial information is presented.

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, most of the accounting for the Company's European
operations was done 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 to manage, and Daw Europe
personnel took over all of the accounting for all of the Company's foreign
operations.

     Daw Europe's business grew very rapidly between 1999 and 2001, with
annualized revenue almost doubling during that two-year period. During this
period of rapid growth, Daw Europe was allowed significant autonomy, and its
responsibilities included maintaining all of the financial records for not only
the UK subsidiary, but all of the Company's operations throughout Europe and the
Middle East.

     As it turns out, the accounting systems and personnel in the Daw Europe
office were unable to keep pace with the rapid growth and 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. In accordance with generally accepted
accounting principles, Daw recognizes revenue on its long term construction
projects based on the percentage of completion method of accounting. 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

                                        4
<Page>

projects based on percentage of completion. Daw Europe personnel therefore
created a financial spreadsheet to help account for the recognition of revenue
on its numerous European projects. This method of tracking and accounting for
contracts in progress resulted in some problems, including the following:

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

  2. When the numbers derived from formulas seemed incorrect, accounting
     personnel in Daw Europe 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.

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

  4. The Daw Europe spreadsheet was not always 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 process of European accounts with
the United States accounts. For example, European costs incurred through the
United States accounts were, in some instances, not properly considered in the
consolidation process, thus resulting in an understatement of costs and
liabilities.

     Also, the Company noted that certain 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 always obtaining objective accounting documentation, the
accounting personnel, in some instances, 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 certain
reclassifications and 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.

     The Company's financial statements for 1999, 2000 and the first two
quarters of 2001 have been restated to correct the errors noted above. In the
opinion of management, all material adjustments necessary to correct the
financial statements have been recorded.

     The impact of these adjustments on the Company's 1999 financial results and
financial condition as originally reported is summarized below (in thousands,
except per share data):

                                        5
<Page>

                    CONSOLIDATED STATEMENT OF OPERATIONS DATA

<Table>
<Caption>
                                                                  Year Ended
                                                               December 31, 1999
                                                     -------------------------------------
                                                        As
                                                     Previously         As
                                                     Reported        Restated     Change
                                                     ----------     ---------    ---------
<S>                                                  <C>            <C>          <C>
Revenues                                             $  45,206      $  44,011    $  (1,195)
Cost of goods sold                                      43,576         44,050          474
  Gross profit                                           1,630            (39)      (1,669)
Operating expenses                                       9,870         10,105          235
Loss from operations                                    (8,240)       (10,144)      (1,904)
Other income (expense), net                               (493)          (677)        (184)
Net loss                                                (7,641)        (9,729)      (2,088)

Loss per common share
  Basic                                              $   (0.61)     $   (0.78)   $   (0.17)
  Diluted                                                (0.61)         (0.78)       (0.17)

Weighted-average common and dilutive
common equivalent shares outstanding
  Basic
                                                        12,502         12,502            -
  Diluted                                               12,502         12,502            -
</Table>

                         CONSOLIDATED BALANCE SHEET DATA

<Table>
                                                               December 31, 1999
                                                     -------------------------------------
                                                        As
                                                     Previously         As
                                                     Reported        Restated     Change
                                                     ----------     ---------    ---------
<S>                                                  <C>            <C>          <C>
Current assets                                       $  18,343      $  17,435    $    (908)
Property and equipment - net, at cost                    3,402          3,110         (292)
Other assets                                             4,330          4,330           -
                                                     ---------      ---------    ---------
  Total assets                                       $  26,075      $  24,875    $  (1,200)
                                                     =========      =========    =========

Current liabilities                                  $  15,457      $  16,462    $   1,005
Long-term obligations                                      110            110            -
Shareholders' equity                                    10,508          8,303       (2,205)
                                                     ---------      ---------    ---------
   Total liabilities and shareholders' equity        $  26,075      $  24,875    $  (1,200)
                                                     =========      =========    =========
</Table>

                                        6
<Page>

RESULTS OF OPERATIONS

Revenue from operations
<Table>
<Caption>
                                               1999            Change        1998         Change          1997
                                               ----            ------        ----         ------          ----
<S>                                           <C>              <C>         <C>            <C>            <C>
Cleanrooms and related products               $30,775          (33.5)%     $ 46,298       (11.9)%        $ 52,541
Other products                                 13,236           95.2%         6,780       100.0%                -
Total revenue                                  44,011          (17.1)%       53,078         1.0%           52,541
</Table>

     Revenue from cleanrooms and related products decreased 33.5% in 1999 to
$30.8 million from $46.3 million in 1998. The decrease was due to the continued
downturn in the semiconductor industry's capital expenditures for new fab
facilities as more fully discussed above. During 1998, cleanroom contract
revenue decreased by 11.9% to $46.3 million from $52.5 million in 1997. This
decrease is primarily related to the downturn in the semiconductor industry as
discussed above.

     Revenue from other products increased to $13.2 million in 1999 from $6.8
million in 1998. During 1998, revenue from other products was $6.8 million as
compared to zero in 1997. The increase is due to the start-up and continuation
of new lines of business, including the Company's line of sleeper cabs, contract
manufacturing, and other product sales that were non-existent in 1997.

     NORTH AMERICA - Cleanroom revenue for the year ended December 31, 1999
decreased by 22.1% to $18.3 million from $23.5 million for the year ended
December 31, 1998. As a percentage of total cleanroom revenue, North America
revenue increased to 59.6% in 1999 compared to 50.8% in 1998. The decrease in
North America contract revenue is primarily related to the continued downturn in
the semiconductor industry as more fully discussed above.

     Revenue from other products was primarily attributable to sales of sleeper
cabs and various contract manufactured products sold only in North America in
1999 and 1998.

     Cleanroom revenue for the year ended December 31, 1998 decreased by 25.1%
to $23.5 million from $31.4 million for the year ended December 31, 1997. As a
percentage of total revenue, North America revenue decreased to 50.8% in 1998
compared to 59.8% in 1997. The decrease is the result of fewer contracts
received in North America due to the decline in capital spending by the
semiconductor industry.

     ASIA/PACIFIC RIM - Cleanroom revenue for the year ended December 31, 1999
decreased by 72.4% to $2.7 million from $9.8 million for the year ended December
31, 1998. As a percentage of total cleanroom revenue Asia/Pacific revenue
decreased to 8.8% in 1999 compared to 21.2% in 1998. The decrease in revenue and
percentage was directly related to the continued downturn in the semiconductor
industry in the Asia/Pacific Rim and the Company's decision to pull out of this
region. The Company has transferred ownership of its Asia branch to a former
employee.

     Cleanroom revenue for December 31, 1998 increased by 2.7% to $9.8 million
from $9.5 million for the year ended December 31, 1997. As a percentage of total
cleanroom revenue, Asia/Pacific revenue increased to 21.2% in 1998 compared to
18.2% in 1997. The increase in revenue and percentage was primarily due to the
award of a significant project in China. The contract was subsequently placed on
indefinite suspension due to the uncertainty of the Asian market.

     EUROPE - Cleanroom revenue for the year ended December 31, 1999 decreased
by 25.4% to $9.7 million from $13.0 million for the year ended December 31,
1998. As a percentage of total cleanroom revenue, European revenue increased to
31.6% in 1999 compared to 28.0% in 1998. Although the worldwide downturn in the
semiconductor industry continued in 1999, it does not appear to have affected
the European segment as dramatically as the Asian and North American markets.

     Cleanroom revenue for 1998 increased by 12.0% to $13.0 million from $11.6
million for the year ended December 31, 1997. As a percentage of total cleanroom
revenue, Europe revenue increased to 28.0% in 1998 compared to 22.0% in 1997.
While the semiconductor industry has experienced a worldwide downturn, it did
not

                                        7
<Page>

appear to have affected the European segment as dramatically as the Asian
and North American markets. Additionally, the Company was able to win contracts
in new countries that it had not contracted business in previously.

GROSS PROFIT(LOSS)

<Table>
<Caption>
                                               1999            Change        1998         Change          1997
                                               ----            ------        ----         ------          ----
<S>                                           <C>              <C>         <C>            <C>            <C>
Gross profit (loss)                           $   (39)        (102.1)%     $  1,855       (64.8)%        $  5,269
Percentage of revenues                            0.0%                          3.5%                         10.0%
</Table>

     Gross profit (loss) for the year ended December 31, 1999 decreased by
102.1% to a negative $39,000 from a positive $1.9 million for the year ended
December 31, 1998. Gross profit decreased as a percentage of revenue to 0.0% for
1999 compared to a positive 3.5% for 1998. The Company believes the decrease in
gross margin is due to more competitive bidding pressures driving gross margins
down. The downturn in the semiconductor industry generally resulted in fewer
contracts available to bid, a significant increase in price competition on
contracts that were awarded, and reduced margins on contracts. The downturn has
resulted in fewer contracts awarded to the Company and those that were awarded
were done so after a highly competitive bidding process placing significant
downward pressure on pricing, resulting in lower margins.

     Gross profit for 1998 decreased by 64.8% to $1.9 million from $5.3 million
in 1997, and decreased as a percentage of contract revenue to 3.5% in 1998 from
10.0% in 1997. The decrease in gross profit was the direct result of the
substantial reductions in contracts awarded from 1997 to 1998 as the
semiconductor industry entered its second year of its downturn. As the downturn
gained momentum throughout 1998, the Company had fewer contracts to which it
could allocate its fixed manufacturing overhead costs established in prior years
as a result of anticipated contract awards.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

<Table>
<Caption>
                                               1999            Change        1998         Change          1997
                                               ----            ------        ----         ------          ----
<S>                                           <C>              <C>         <C>            <C>            <C>
Selling, general and administrative
    expenses                                  $ 7,348           12.8%      $  6,513       (22.2)%        $  8,373
Percentage of revenues                           16.7%                         12.3%                         15.9%
</Table>

     Selling, general and administrative expenses for 1999 increased 12.8% to
$7.3 million, from $6.5 million, and increased as a percentage of revenue to
16.7% for the year ended December 31, 1999 compared to 12.3% for the year ended
December 31, 1998. The increase in selling, general and administrative expenses
in 1999 compared with 1998 was primarily the result of a difference in the
calculation of the manufacturing overhead expense "allocation" to direct cost of
goods sold. The Company allocates a portion of its overhead costs associated
with the direct manufacture of its products to costs of goods sold. While
combined selling, general and administrative expenses for payroll and other
overhead expenses decreased by approximately $2.0 million from 1998 to 1999, the
overhead "allocation" costs (associated with the direct manufacture of its
products to costs of goods sold and then reclassified as direct costs) was
approximately $2.9 million more in 1998 than 1999.

     Selling, general and administrative expenses for 1998 decreased 22.2% to
$6.5 million, or 12.3% of revenue, from $8.4 million, or 15.9% of revenue, in
1997. The decrease in selling, general and administrative expenses was the
result of an aggressive cost reduction program as well as significant headcount
reductions completed during the fourth quarter of 1998 during which
approximately 300 employees were laid off, reducing payroll and related
expenses.

RESEARCH AND DEVELOPMENT

<Table>
<Caption>
                                               1999            Change        1998         Change          1997
                                               ----            ------        ----         ------          ----
<S>                                           <C>              <C>         <C>             <C>           <C>
Research and
  Development expense                         $   214          (27.0)%     $    293        19.1%         $    246
Percentage of revenues                            0.5%                          0.6%                          0.5%
</Table>

                                        8
<Page>

     Research and development expense decreased slightly in actual dollars spent
from 1998 to 1999. Research and development expense increased slightly from 1997
to 1998. This increase was the result of more research and development projects
associated with the Company's diversification efforts.

DEPRECIATION AND AMORTIZATION

<Table>
<Caption>
                                               1999            Change        1998         Change          1997
                                               ----            ------        ----         ------          ----
<S>                                           <C>               <C>        <C>             <C>           <C>
Depreciation and
  Amortization expense                        $   704           25.0%      $    563        30.6%         $    431
Percentage of revenues                            1.6%                          1.1%                          0.8%
</Table>

     Depreciation and amortization expense, not allocated to cost of goods sold,
during 1999 increased by 25.0% to $704,000, or 1.6% of revenue, from $563,000,
or 1.1% of revenues, in 1998. This increase was the result of an acceleration in
the depreciable life in leasehold improvements associated with the Company's
primary building lease.

     Depreciation and amortization expense in 1998 increased by 30.6% to
$563,000, or 1.1% of revenues, from $431,000, or 0.8% of revenues, in 1997. This
increase was the result of a full year depreciation expense on leasehold
improvements, furniture, fixtures, computer equipment and software purchased
during 1998.

OTHER INCOME (EXPENSE)

<Table>
<Caption>
                                               1999            Change        1998         Change          1997
                                               ----            ------        ----         ------          ----
<S>                                           <C>               <C>        <C>            <C>            <C>
Other income (expense), net                   $  (677)          40.2%      $   (483)       40.4%         $   (344)
Percentage of revenues                            1.5%                          0.9%                          0.7%
</Table>

     Other expense, net increased in 1999 to $677,000 from $483,000 in 1998.
This increase was largely due to an increase in interest expense in 1999
resulting from an increase in the average line of credit rate on the Company's
revolving line of credit over 1998.

RESTRUCTURING CHARGES

     Restructuring charges in 1999 were $1.8 million or 4.2% of revenue.
Restructuring charges were largely due to the disposition of the Company's
Asia/Pacific office, and the write-down of inventory associated with a proposed
divestiture of the Company's cleanroom component manufacturing division.

INCOME TAX EXPENSE (BENEFIT)

<Table>
<Caption>
                                               1999            Change        1998         Change          1997
                                               ----            ------        ----         ------          ----
<S>                                           <C>              <C>         <C>            <C>            <C>
Income tax expense (benefit)                  $(1,092)         (47.4)%     $ (2,075)      (11.2)%        $ (1,866)
Percentage of revenues                           (2.5)%                        (3.9)%                        (3.6)%
</Table>

     The changes in the effective tax rates for all periods relate primarily to
the amount of deferred tax assets recorded and the amount of offsetting
valuation allowances provided against such assets. (see Note J of Notes to the
Consolidated Financial Statements). In addition, the increase from 1997 to 1998
was partially the result of tax benefits the Company was able to utilize from
its foreign sales corporation.

LIQUIDITY AND CAPITAL RESOURCES

     Working capital at December 31, 1999 was $973,000 compared to $10.7 million
at December 31, 1998. This included cash and cash equivalents of $296,000 and
$2.1 million at December 31, 1999 and 1998 respectively. Receivables, including
retentions, (see Note D of Notes to Financial Statements) decreased to $7.4
million at December 31, 1999 compared to $8.9 million at December 31, 1998. This
decrease was the result of lower revenues from fewer contracts during 1999
compared to 1998. Day's sales outstanding (the ratio between receivables,
excluding retention, and average daily revenue taken over the year) increased to
60 days at December 31, 1999, from 54 days at December 31, 1998.

                                        9
<Page>

     The Company's operations used $1.4 million of cash during 1999, compared to
using $6.9 million of cash in 1998. During 1999, the Company experienced a
decrease in receivables of $1.1 million as a result of the decline in revenues,
an increase in accounts payable and accrued expenses of approximately of $4.2
million, an increase in inventories of $1.4 million, and a decrease in costs and
estimated earnings in excess of billings on contracts in progress of $4.0
million.

     The Company maintained a revolving line of credit with a domestic bank for
the lesser of $6.0 million or the available borrowing base for the period ended
December 31, 1999 and $6.0 million for the period ended December 31, 1998. The
interest rate is computed at the bank's prime rate plus 5% (13.5 percent at
December 31, 1999) and requires monthly payments of interest. Subsequent to year
end the bank lowered its interest rate computation to the bank's prime rate plus
3%, but has informed the Company that it will restore the rate to prime plus 5%
again as of May 31, 2000. The line of credit was scheduled to expire June 30,
1999 and was extended to August 31, 2000. The line of credit is collateralized
by certain domestic receivables and inventories. 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. At times during 1999 and at December 31, 1999, the Company was out of
compliance on certain indebtedness covenants. Subsequent to year end, the
Company signed an extension of the line of credit through August 31, 2000 which
included a waiver for the non-compliance with the covenants as of December 31,
1999. The Company is currently reviewing several financing alternatives.

     During 1999, the Company used $189,000 for the purchase of property and
equipment and realized $116,000 from the sale of property and equipment. The
Company anticipates that its capital expenditures in 2000 for routine additions
and replacements of property, and equipment will be less than $500,000. These
purchases will be financed through long-term debt or capital leases.

     Management believes that existing cash balances, borrowings available under
the line of credit, cash generated from operations, and proceeds from a
scheduled $5.0 million private equity placement, will be adequate to meet the
Company's anticipated cash requirements through December 31, 2000.

YEAR 2000 ISSUES

     In 1998 and 1999 the Company developed a comprehensive plan to address year
2000 issues. The areas of focus were as follows: i) the Company's information
technology systems; ii) the Company's non-information technology systems (i.e.
machinery, equipment and devices which utilize built in or embedded technology);
and iii) third party suppliers and customers. The Company did not suffer any
negative effects from the advent of the year 2000 regarding the Company's
information technology system, non-information technology systems or third party
suppliers and customers.

IMPACT OF FUTURE ACCOUNTING PRONOUNCEMENTS

     None.

FACTORS AFFECTING FUTURE RESULTS

     The Company's operations are subject to risks and uncertainties that could
result in actual operating results differing materially from anticipated
operating results and past operating results and trends. These risks and
uncertainties include pricing pressures, cancellations of existing contracts,
timing of significant customer orders, increased competition, and changes in
semiconductor and cleanroom technology.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     The Company's restated financial statements and notes are included herein
beginning on page F-1. The supplementary data is included herein immediately
following the signature page of this report on Form 10-K/A.

                                       10
<Page>

                                     PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

     (a)  Documents Filed as Part of this Report:

          (1)  FINANCIAL STATEMENTS. The following financial statements are
               filed with this report beginning on page F-1:

          --   Report of Independent Certified Public Accountants

          --   Consolidated Balance Sheets as of December 31, 1999 and 1998

          --   Consolidated Statements of Operations for the Years Ended
               December 31, 1999, 1998 and 1997

          --   Consolidated Statements of Shareholders' Equity for the Years
               Ended December 31, 1999, 1998 and 1997

          --   Consolidated Statements of Cash Flows for the Years Ended
               December 31, 1999, 1998 and 1997

          --   Notes to Consolidated Financial Statements

          --   Report of Independent Certified Public Accountants on Schedule

          --   Schedule II - Valuation and Qualifying Accounts

     All other schedules have been omitted because the information is not
required, or if required the information required therein is not present in
amounts sufficient to require submission of the schedule or because the
information required is included in the financial statements or notes thereto.

     (b)  Reports on Form 8-K:

          None.

     (c)  Exhibits:

          The following exhibits required by Item 601 of Regulation S-K are
     filed herewith or have been filed previously with the Commission as
     indicated below:

                                       11
<Page>

                                  EXHIBIT INDEX

<Table>
<Caption>
REGULATION S-K
  EXHIBIT NO.                              DESCRIPTION                                   SEQUENTIAL PAGE NO.
---------------    ------------------------------------------------------------   -------------------------------
<S>                <C>                                                            <C>
            3.1    Restated Articles of Incorporation*                            Form   10-KSB   for  the  year
                                                                                  ended   December   31,   1994,
                                                                                  Exhibit No. 3.1

            3.2    Bylaws of the Company*                                         Form   10-KSB   for  the  year
                                                                                  ended   December   31,   1992,
                                                                                  Exhibit No. 3.2

           10.1    Agreement and Plan of Merger*                                  Form 8-K dated  October  1992,
                                                                                  Exhibit 10.1

           10.2    1993 Stock Option Plan*                                        Form   10-KSB   for  the  year
                                                                                  ended   December   31,   1993,
                                                                                  Exhibit 10.4

           10.3    Amendment No. 1 to 1993 Stock Option Plan*                     Form  10-Q for  quarter  ended
                                                                                  June 30, 1997, Exhibit 10.1

           10.4    Amendment No. 2 to 1993 Stock Option Plan*                     Form  10-K for the year  ended
                                                                                  December  31,  1997,   Exhibit
                                                                                  10.4

           10.5    Revolving Domestic Line of Credit Agreement as Amended by      Form  10-K for the year  ended
                   the Fifth Extension Agreement*                                 December  31,  1999,   Exhibit
                                                                                  10.5

           10.6    Lease Agreement for Salt Lake City facility*                   Form   10-KSB   for  the  year
                                                                                  ended   December   31,   1993,
                                                                                  Exhibit 10.6

           10.7    Amendment to Lease Agreement*                                  Form  10-K for the year  ended
                                                                                  December  31,  1996,   Exhibit
                                                                                  10.5

             21    Subsidiaries of the Registrant*                                Form  10-K for the year  ended
                                                                                  December 31, 1999, Exhibit 21

           23.1    Consent of Independent Certified Public Accountants            Filed herewith.
</Table>

-------------------------
*    These exhibits are incorporated herein by reference.

                                       12
<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 24, 2002.

                                DAW TECHNOLOGIES, INC.

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

                                       13
<Page>

                              REPORT OF INDEPENDENT
                          CERTIFIED PUBLIC ACCOUNTANTS

Board of Directors
Daw Technologies, Inc. and Subsidiaries

We have audited the accompanying consolidated balance sheets of Daw
Technologies, Inc. and Subsidiaries as of December 31, 1999 and 1998, and the
related consolidated statements of operations, shareholders' equity, and cash
flows for each of the three years in the period ended December 31, 1999. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Daw Technologies,
Inc. and Subsidiaries as of December 31, 1999 and 1998, and the consolidated
results of their operations and their consolidated cash flows for each of the
three years in the period ended December 31, 1999, in conformity with generally
accepted accounting principles.

As discussed in Note Y to the financial statements, the accompanying
consolidated balance sheet as of December 31, 1999, and the related consolidated
statements of operations, shareholders' equity, and cash flows for the year then
ended, have been restated.

                                                    /s/ GRANT THORNTON LLP

Salt Lake City, Utah
April 7, 2000, except for Note Y for
which the date is April 5, 2002

                                       F-1
<Page>

                     Daw Technologies, Inc. and Subsidiaries

                           CONSOLIDATED BALANCE SHEETS
                        (in thousands, except share data)

<Table>
<Caption>
                                     ASSETS

                                                                                       December 31,
                                                                               --------------------------

                                                                                   1999
                                                                               (as restated)     1998
                                                                               -------------   ----------
<S>                                                                             <C>            <C>
CURRENT ASSETS
  Cash and cash equivalents                                                     $      296     $    2,140
  Accounts receivable, net                                                           7,372          8,904
  Costs and estimated earnings in excess
    of billings on contracts in progress                                             3,581          7,546
  Inventories, net                                                                   2,612          1,233
  Deferred income taxes                                                                425            655
  Other current assets                                                               3,149          2,391
                                                                                ----------     ----------
        Total current assets                                                        17,435         22,869
PROPERTY AND EQUIPMENT, NET                                                          3,110          4,859
DEFERRED INCOME TAXES                                                                3,364          1,921
OTHER ASSETS                                                                           966          1,192
                                                                                ----------     ----------
                                                                                $   24,875     $   30,841
                                                                                ==========     ==========

                      LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
  Checks written in excess of cash in bank                                      $      248     $        -
  Accounts payable and accrued liabilities                                           8,871          4,749
  Billings in excess of costs and estimated
    earnings on contracts in progress                                                1,624          1,635
  Lines of credit                                                                    5,258          5,254
  Current portion of long-term obligations                                             461            557
                                                                                ----------     ----------
        Total current liabilities                                                   16,462         12,195
LONG-TERM OBLIGATIONS, less current portion                                            110            519
COMMITMENTS AND CONTINGENCIES                                                            -              -
SHAREHOLDERS' EQUITY
  Preferred stock, authorized 10,000,000 shares of
    $0.01 par value; none issued and outstanding                                         -              -
  Common stock, authorized 50,000,000 shares of
    $0.01 par value; issued and outstanding 12,513,114
    shares in 1999 and 12,479,711 shares in 1998                                       125            125
  Additional paid-in capital                                                        16,579         16,557
  Retained earnings (deficit)                                                       (8,284)         1,445
  Accumulated other comprehensive loss                                                (117)             -
                                                                                ----------     ----------
        Total shareholders' equity                                                   8,303         18,127
                                                                                ----------     ----------
                                                                                $   24,875     $   30,841
                                                                                ==========     ==========
</Table>

        The accompanying notes are an integral part of these statements.

                                       F-2
<Page>

                     Daw Technologies, Inc. and Subsidiaries

                      CONSOLIDATED STATEMENTS OF OPERATIONS

                        (in thousands, except share data)

<Table>
<Caption>
                                                                        Year ended December 31,
                                                          ------------------------------------------------
                                                               1999             1998             1997
                                                          (as restated)
                                                          --------------   --------------   --------------
<S>                                                       <C>              <C>              <C>
Revenues                                                  $       44,011   $       53,078   $       52,541
Cost of goods sold                                                44,050           51,223           47,272
                                                          --------------   --------------   --------------
         Gross profit (loss)                                         (39)           1,855            5,269
Operating expenses
  Selling, general and administrative                              7,348            6,513            8,373
  Research and development                                           214              293              246
  Depreciation and amortization                                      704              563              431
  Restructuring charges                                            1,839                -                -
                                                          --------------   --------------   --------------
                                                                  10,105            7,369            9,050
                                                          --------------   --------------   --------------
         Loss from operations                                    (10,144)          (5,514)          (3,781)
Other income (expense)
  Interest expense                                                  (658)            (459)            (295)
  Other, net                                                         (19)             (24)             (49)
                                                          --------------   --------------   --------------
                                                                    (677)            (483)            (344)
                                                          --------------   --------------   --------------
         Loss before income taxes                                (10,821)          (5,997)          (4,125)
Income tax expense (benefit)                                      (1,092)          (2,075)          (1,866)
                                                          --------------   --------------   --------------
         Net LOSS                                         $       (9,729)  $       (3,922)  $       (2,259)
                                                          ==============   ===============  ==============

Loss per common share
  Basic                                                   $        (0.78)  $        (0.32)  $        (0.18)
  Diluted                                                          (0.78)           (0.32)           (0.18)

Weighted-average common and dilutive
 common equivalent shares outstanding
  Basic                                                       12,501,980       12,440,121       12,415,957
  Diluted                                                     12,501,980       12,440,121       12,415,957
</Table>

        The accompanying notes are an integral part of these statements.

                                       F-3
<Page>

                     Daw Technologies, Inc. and Subsidiaries

                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

                        (in thousands, except share data)

                  Years ended December 31, 1999, 1998 and 1997

<Table>
<Caption>
                                                                                         (As Restated)
                                                                Addi-     (As Restated)  Accumulated
                                                                tional      Retained        other           (As
                                                   Common      paid-in      earnings     comprehensive    Restated)
                                                    stock      capital      (deficit)         loss          Total
                                                 -----------  ----------  ------------  ---------------   ---------
<S>                                              <C>          <C>          <C>            <C>             <C>
Balances as of January 1, 1997                   $      124   $   15,188   $    7,626     $        -      $ 22,938
Common  stock   issued   pursuant  to  the
  purchase of 43,738  shares  pursuant to
  employee stock purchase plan                            -           84            -              -            84
Common  stock   purchased  and
  retired  - 36,304 shares                                -          (63)           -              -           (63)
Net loss for 1997                                         -            -       (2,259)             -        (2,259)
                                                 ----------   ----------   ----------     ----------      --------
Balances as of December 31, 1997                        124       15,209        5,367              -        20,700

Common stock issued pursuant to the
  purchase of 44,711 shares pursuant to
  employee stock purchase plan and 27,023
  shares issued pursuant to the acquisition
  of another company                                      1        1,348            -              -         1,349
Net loss for 1998                                         -            -       (3,922)             -        (3,922)
                                                 ----------   ----------   ----------     ----------      --------
Balances as of December 31, 1998                        125       16,557        1,445              -        18,127

Common  stock   issued   pursuant  to  the
  purchase of 33,403  shares  pursuant to
  employee stock purchase plan                            -           22            -              -            22
Comprehensive income (loss)
  Net loss for 1999                                       -            -       (9,729)             -        (9,729)
  Foreign currency translation
  adjustments                                             -            -            -           (117)         (117)
                                                                                                          --------
         Total comprehensive loss                         -            -            -              -        (9,846)
                                                 ----------   ----------   ----------     ----------      --------
Balances as of December 31, 1999                 $      125   $   16,579   $   (8,284)    $     (117)     $  8,303
                                                 ==========   ==========   ==========     ==========      ========
</Table>

        The accompanying notes are an integral part of these statements.

                                       F-4
<Page>

                     Daw Technologies, Inc. and Subsidiaries

                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                        (in thousands, except share data)

<Table>
<Caption>
                                                                         Year ended December 31,
                                                              ---------------------------------------
                                                                  1999         1998         1997
                                                              (as restated)
                                                              -------------  ---------     --------
<S>                                                             <C>          <C>           <C>
Increase (decrease) in cash and cash equivalents
  Cash flows from operating activities
     Net loss                                                   $  (9,729)   $  (3,922)    $ (2,259)
     Adjustments to reconcile net loss to net
     cash provided by (used in) operating activities
         Depreciation and amortization                              2,021        1,808        1,724
         (Gain) loss on disposition of property
            and equipment                                             147            -           (7)
         Provision for losses on accounts receivable                  362          100          180
         Deferred income taxes                                     (1,213)      (2,089)        (390)
         Changes in assets and liabilities
            Account receivables                                     1,081        3,468       14,742
            Costs and estimated earnings in excess
              of billings on contracts in progress                  3,882       (3,844)       3,467
            Inventories                                            (1,379)         190          220
            Other current assets                                     (795)        (224)        (148)
            Accounts payable
              and accrued liabilities                               4,220       (1,042)      (5,082)
            Billings in excess of costs and estimated
              earnings on contracts in progress                         3       (1,370)      (4,500)
            Other assets                                               31           10           (6)
                                                                ---------    ---------     --------

                Net cash provided by (used in)
                  operating activities                             (1,369)      (6,915)       7,941
                                                                ---------    ---------     --------
  Cash flows from investing activities
     Purchase of property
       and equipment                                                 (189)        (167)        (349)
     Proceeds from disposition of property
       and equipment                                                  116            -           21
                                                                ---------    ---------     --------
                Net cash used in
                  investing activities                                (73)        (167)        (328)
                                                                ---------    ---------     --------
</Table>

                                   (continued)

                                       F-5
<Page>

                     Daw Technologies, Inc. and Subsidiaries

                CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED

                        (in thousands, except share data)

<Table>
<Caption>
                                                                      Year ended December 31,
                                                              ---------------------------------------
                                                                  1999         1998         1997
                                                              (as restated)
                                                              -------------  ---------     --------
<S>                                                             <C>          <C>           <C>
  Cash flows from financing activities
       Increase in checks written in excess of cash in bank           248            -            -
       Net change in lines of credit                                    4        4,024       (4,466)
       Payments for purchase and retirement of
         common stock                                                   -            -          (63)
       Proceeds from issuance of stock                                 22           49           84
       Payments on long-term obligations                             (657)        (653)        (624)
                                                                ---------    ---------     --------

                Net cash provided by (used in)
                 financing activities                                (383)       3,420       (5,069)

  Effect of exchange rate change on cash and cash equivalents         (19)           -            -
                                                                ---------    ---------     --------
                Net increase (decrease) in cash
                 and cash equivalents                              (1,844)      (3,662)       2,544

  Cash and cash equivalents at beginning of year                    2,140        5,802        3,258
                                                                ---------    ---------     --------
  Cash and cash equivalents at end of year                      $     296    $   2,140     $  5,802
                                                                =========    =========     ========

  SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

  Cash paid during the year for
     Interest                                                   $     654    $     459     $    295
     Income taxes                                                       -           11          438
</Table>

  NONCASH INVESTING AND FINANCING ACTIVITIES

  During 1998, the Company issued 27,023 shares of common stock in connection
  with the acquisition of the net assets of another company (Note T). This
  transaction resulted in an increase to the following balance sheet accounts:

<Table>
    <S>                                                         <C>
    Inventories                                                 $      60
    Other current assets                                               23
    Property and equipment                                             50
    Other assets                                                    1,258
    Accounts payable                                                  (91)
                                                                ---------

    Common stock                                                $   1,300
                                                                =========
</Table>

  Capital lease obligations of $152 for property and equipment acquisitions were
  incurred during 1999.

        The accompanying notes are an integral part of these statements.

                                       F-6
<Page>

                     Daw Technologies, Inc. and Subsidiaries

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        December 31, 1999, 1998 and 1997
                        (in thousands, except share data)

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     A summary of the significant accounting policies consistently applied in
     the preparation of the accompanying financial statements follows.

     1. BUSINESS ACTIVITY

     Daw Technologies, Inc. and Subsidiaries (the Company) is a supplier of
     ultra-clean manufacturing environments, or cleanrooms, to the semiconductor
     industry. The Company designs, engineers, manufactures, installs and
     services all principal component systems for advanced cleanrooms. The
     Company also manufactures and sells other products that are manufactured
     similar to cleanrooms, and provides contract manufacturing services on an
     OEM basis for various customers.

     2. PRINCIPLES OF CONSOLIDATION

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

     3. METHOD OF 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 cost 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 which require the revision become known. 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.

                                       F-7
<Page>

                     Daw Technologies, Inc. and Subsidiaries

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        December 31, 1999, 1998 and 1997
                        (in thousands, except share data)

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED

     3. METHOD OF ACCOUNTING FOR LONG-TERM CONTRACTS - CONTINUED

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

     4. OTHER REVENUE RECOGNITION

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

     5. DEPRECIATION AND AMORTIZATION

     Property and equipment are stated at cost. Depreciation and amortization
     are provided for in amounts sufficient to relate the cost of depreciable
     assets to operations over their estimated service lives. Leased property
     under capital leases and leasehold improvements are amortized over the
     shorter of the lives of the respective leases or over the service lives of
     the asset. The straight-line method of depreciation is followed for
     financial reporting purposes. Accelerated methods of depreciation are used
     for tax purposes.

     6. 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.

     7. CASH AND CASH EQUIVALENTS

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

                                       F-8
<Page>

                     Daw Technologies, Inc. and Subsidiaries

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        December 31, 1999, 1998 and 1997
                        (in thousands, except share data)

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED

     8. INVENTORIES

     Inventories are stated at the lower of cost or market. Cost is determined
     principally by the first-in, first-out method.

     9. NET EARNINGS (LOSS) PER SHARE

     The Company follows the provisions of Statement of Financial Accounting
     Standards No. 128 "Earnings Per Share" (SFAS No. 128). SFAS No. 128
     requires the presentation of basic and diluted EPS. Basic EPS are
     calculated by dividing earnings (loss) available to common shareholders by
     the weighted-average number of common shares outstanding during each
     period. Diluted EPS are similarly calculated, except that the
     weighted-average number of common shares outstanding includes common shares
     that may be issued subject to existing rights with dilutive potential.

     10. RESEARCH AND DEVELOPMENT COSTS

     The Company conducts research and development to develop new products or
     product improvements not directly related to a specific project. Research
     and development costs have been charged to expense as incurred.

     11. CONCENTRATIONS

     The Company's financial instruments that are exposed to concentration of
     credit risk consist primarily of cash and cash equivalents and receivables.
     The Company provides credit according to the terms of the individual
     project contracts, in the normal course of business, primarily to
     semi-conductor manufacturers.

     Approximately 49 percent (41 percent in 1998) of receivables are with three
     different customers. In addition, approximately 30 percent (25 percent in
     1998) of receivables are due from entities located outside of North
     America, primarily Europe and Asia. Of the total receivables, approximately
     30 percent are denominated in foreign currencies (5 percent at December 31,
     1998). The Company routinely evaluates the financial strength of its
     customers and monitors each account to minimize the risk of loss.

                                       F-9
<Page>

                     Daw Technologies, Inc. and Subsidiaries

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        December 31, 1999, 1998 and 1997
                        (in thousands, except share data)

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED

     11. CONCENTRATIONS - CONTINUED

     The Company maintains cash and cash equivalents at several financial
     institutions. Accounts at each domestic institution are insured by the FDIC
     up to $100. Uninsured domestic balances were approximately $2,125 at
     December 31, 1998 (none in 1999). The Company also maintains cash and cash
     equivalents in foreign accounts. These uninsured balances are approximately
     $288 at December 31, 1999 ($1,494 in 1998).

     12. RETENTIONS RECEIVABLE

     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.

     13. INTANGIBLE ASSETS

     Intangible assets are amortized on the straight-line method over the
     estimated useful life or the terms of the respective agreement or patent,
     whichever is shorter. The original estimated useful lives range from 2-15
     years. On an ongoing basis, management reviews the valuation and
     amortization of intangible assets to determine possible impairment by
     comparing the carrying value to the undiscounted estimated future cash
     flows of the related assets and necessary adjustments, if any, are
     recorded.

     14. ESTIMATES AND ASSUMPTIONS

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

     15. FAIR VALUE OF FINANCIAL INSTRUMENTS

     The carrying value of the Company's cash and cash equivalents, contracts
     receivable and accounts payable, accrued liabilities and lines of credit
     approximate their fair values due to their short-term nature.

                                      F-10
<Page>

                     Daw Technologies, Inc. and Subsidiaries

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        December 31, 1999, 1998 and 1997
                        (in thousands, except share data)

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED

     16. STOCK OPTIONS

     The Company has elected to follow Accounting Principles Board Opinion No.
     25, "Accounting for Stock Issued to Employees" (APB 25) and related
     interpretations in accounting for its employee stock options rather than
     adopting the alternative fair value accounting provided for under FASB
     Statement 123, "Accounting for Stock-Based Compensation" (SFAS 123).

     17. RECLASSIFICATIONS

     Certain reclassifications have been made to the 1998 and 1997 financial
     statements to conform with the 1999 presentation.

NOTE B - CAPITAL TRANSACTIONS

     During 1999, 1998 and 1997, the Company received $22, $49 and $84 from the
     issuance of 33,403, 44,711 and 43,738 shares of common stock, respectively.

     In 1998, the Company also issued 27,023 shares of common stock to acquire
     the net assets of Intelligent Enclosures Corporation (Note T). The Company
     purchased and retired 36,304 shares of common stock during 1997.

     During 1996, the shareholders of the Company approved an employee stock
     purchase plan. The maximum number of shares of common stock that may be
     issued under the plan is 750,000 shares. Employees are eligible upon
     completion of 90 days employment. Eligible employees may designate from 2
     percent to 15 percent (up to $25) of eligible compensation to be withheld
     for the purchase of stock. Price per share is 85 percent of the lower
     closing trading price of the stock on the applicable offering commencement
     date or offering termination date. Offering periods are six months in
     length beginning on May 1 and November 1 of each year. Employees purchased
     33,403, 44,711 and 43,738 shares under the plan in 1999, 1998 and 1997,
     respectively.

                                      F-11
<Page>

                     Daw Technologies, Inc. and Subsidiaries

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        December 31, 1999, 1998 and 1997
                        (in thousands, except share data)

NOTE C - INTERNATIONAL OPERATIONS

     Financial information summarized by geographic area for the years ended
     December 31, 1999, 1998 and 1997, is as follows:

<Table>
<Caption>
                                                        North
                         1999                          America        Europe      Asia/Pacific    Consolidated
     --------------------------------------------    -----------   -----------   --------------  --------------
     <S>                                             <C>           <C>           <C>             <C>
     Net revenues - unaffiliated customers           $   31,169    $    9,749    $       3,093   $      44,011
     Loss from operations                                (6,319)       (1,386)          (2,439)        (10,144)
     Identifiable assets                                 18,443         6,432                -          24,875

<Caption>
                                                        North
                         1998                          America        Europe      Asia/Pacific    Consolidated
     --------------------------------------------    -----------   -----------   --------------  --------------
     <S>                                             <C>           <C>           <C>             <C>
     Net revenues - unaffiliated customers           $   30,507    $   12,965    $       9,606   $      53,078
     Loss from operations                                (4,316)          (42)          (1,156)         (5,514)
     Identifiable assets                                 21,352         6,453            3,036          30,841

<Caption>
                                                        North
                         1997                          America        Europe      Asia/Pacific    Consolidated
     --------------------------------------------    -----------   -----------   --------------  --------------
     <S>                                             <C>           <C>           <C>             <C>
     Net revenues - unaffiliated customers           $   31,413    $   11,574    $       9,554   $      52,541
     Loss from operations                                  (283)       (2,668)            (830)         (3,781)
     Identifiable assets                                 18,655         8,262            5,447          32,364
</Table>

     Foreign currency transaction losses totaling approximately $192 for 1999
     ($203 for 1998) are included in other income. Foreign currency transactions
     for 1997 were not significant.

NOTE D - ACCOUNTS RECEIVABLE

     Accounts receivable consist of the following:

<Table>
<Caption>
                                                     1999          1998
                                                  ---------     ---------
     <S>                                          <C>           <C>
     Trade accounts receivable                    $  1,662      $  1,397
     Contract receivables                            5,822         7,140
     Retentions receivable                             188           982
                                                  ---------     ---------
                                                     7,672         9,519
     Less allowance for doubtful accounts              300           615
                                                  ---------     ---------

     Accounts receivable                          $  7,372      $  8,904
                                                  =========     =========

</Table>

                                      F-12
<Page>

                     Daw Technologies, Inc. and Subsidiaries

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        December 31, 1999, 1998 and 1997
                        (in thousands, except share data)

NOTE E - INVENTORIES

     Inventories consist of the following:

<Table>
<Caption>
                                                    1999          1998
                                                  ---------     ---------
     <S>                                          <C>           <C>
     Raw materials                                $    523      $  1,533
     Work in process                                 2,389             -
                                                  ---------     ---------
                                                     2,912         1,533
     Less allowance for obsolescence                   300           300
                                                  ---------     ---------

            Total                                 $  2,612      $  1,233
                                                  =========     =========
</Table>

NOTE F - OTHER CURRENT ASSETS

     Other current assets consist of the following:

<Table>
<Caption>
                                                    1999          1998
                                                  ---------     ---------
     <S>                                          <C>           <C>
     Income taxes receivable                      $    222      $    360
     Refundable foreign taxes                        2,703         1,666
     Miscellaneous receivables and deposits            137           188
     Prepaid expenses                                   87           177
                                                  ---------     ---------

                                                  $  3,149      $  2,391
                                                  =========     =========
</Table>

NOTE G - PROPERTY AND EQUIPMENT

     Property and equipment and estimated useful lives consist of the following:

<Table>
<Caption>
                                                                       Years          1999         1998
                                                                  ---------------   ---------   ---------
     <S>                                                           <C>              <C>         <C>
     Equipment                                                         5-10         $   2,093   $   4,221
     Furniture and fixtures                                             3-5             1,322       2,734
     Leasehold improvements                                        life of lease        2,626       2,605
     Equipment under capital leases                                    5-10             3,720       4,067
     Vehicles                                                           3-5               246         317
                                                                                    ---------   ---------
                                                                                       10,007      13,944
     Less accumulated depreciation and amortization including
       $3,227 and $3,002 for equipment under capital leases at
       1999 and 1998, respectively                                                      6,897       9,085
                                                                                    ---------   ---------
                                                                                    $   3,110   $   4,859
                                                                                    =========   =========
</Table>

                                      F-13
<Page>

                     Daw Technologies, Inc. and Subsidiaries

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        December 31, 1999, 1998 and 1997
                        (in thousands, except share data)

NOTE H - CONTRACTS IN PROGRESS

     Costs incurred to date and estimated earnings and the related progress
     billings to date on contracts in progress are as follows:

<Table>
<Caption>
                                                    1999          1998
                                                  ---------    ---------
     <S>                                          <C>          <C>
     Total costs and estimated earnings           $ 193,794    $ 118,265
     Progress billings to date                      191,837      112,354
                                                  ---------    ---------

                                                  $   1,957    $   5,911
                                                  =========    =========
</Table>

     The above are included in the balance sheets under the following captions:

<Table>
<Caption>
                                                    1999          1998
                                                  ---------     ---------
     <S>                                          <C>           <C>
     Costs and estimated earnings in excess
       of billings on contracts in progress       $  3,581      $  7,546
     Billings in excess of costs and estimated
       earnings on contracts in progress            (1,624)       (1,635)
                                                  ---------     ---------

                                                  $  1,957      $  5,911
                                                  =========     =========
</Table>

NOTE I - ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

     Accounts payable and accrued liabilities consist of the following:

<Table>
<Caption>
                                                    1999          1998
                                                  ---------     ---------
     <S>                                          <C>           <C>
     Trade accounts payable                       $  6,334      $  2,847
     Other accrued liabilities                       1,392           219
     Employees salaries, incentive pay,
       vacation and payroll taxes                      836         1,017
     Reserve for contract estimates and
       warranties                                      309           666
                                                  ---------     ---------

                                                  $  8,871      $  4,749
                                                  =========     =========
</Table>

                                      F-14
<Page>

                     Daw Technologies, Inc. and Subsidiaries

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        December 31, 1999, 1998 and 1997
                        (in thousands, except share data)

NOTE J - INCOME TAXES

     Components of income taxes (benefit) are as follows:

<Table>
<Caption>
                                                    1999       1998       1997
                                                  ---------  ---------  ---------
     <S>                                          <C>        <C>        <C>
     Current
         Federal                                  $    106   $     12   $ (1,171)
         State                                          15          2       (305)
         Foreign                                         -          -          -
                                                  ---------  ---------  ---------
                                                       121         14     (1,476)
     Deferred
         Federal                                    (1,511)    (1,809)      (379)
         State                                         298       (280)       (11)
                                                  ---------  ---------  ---------
                                                    (1,213)    (2,089)      (390)
                                                  ---------  ---------  ---------
     Income taxes (benefit)                       $ (1,092)  $ (2,075)  $ (1,866)
                                                  =========  =========  =========
</Table>

     The income tax expense (benefit) reconciled to the tax computed at the
     statutory Federal rate of 34 percent is as follows:

<Table>
<Caption>
                                                    1999       1998       1997
                                                  ---------  ---------  ---------
     <S>                                          <C>        <C>        <C>
     Tax (benefit) at federal statutory rate      $ (3,679)  $ (2,039)  $ (1,403)
     Nondeductible expenses                              5         12         11
     State income taxes, net of federal
        income tax benefit                            (324)      (198)      (234)
     Foreign sales corporation exemption                 -          -       (167)
     Change in valuation allowance                   2,887          -          -
     All other, net                                     19        150        (73)
                                                  ---------  ---------  ---------
                                                  $ (1,092)  $ (2,075)  $ (1,866)
                                                  =========  =========  ==========
</Table>

     Deferred income taxes related to the following:

<Table>
<Caption>
                                                    1999       1998
                                                  ---------  ---------
     <S>                                          <C>        <C>
     Current deferred tax assets
         Allowance for doubtful accounts          $    112   $    230
         Accrued expenses and reserves                 313        425
                                                  ---------  ---------
                                                  $    425   $    655
                                                  =========  =========
</Table>

                                      F-15
<Page>

                     Daw Technologies, Inc. and Subsidiaries

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        December 31, 1999, 1998 and 1997
                        (in thousands, except share data)

NOTE J - INCOME TAXES - CONTINUED

<Table>
<Caption>
                                                        1999       1998
                                                      ---------  ---------
     <S>                                              <C>        <C>
     Long-term deferred tax assets (liabilities)
       Excess book depreciation and amortization      $    (37)  $    (79)
       Foreign tax credit carryforwards                    162        162
       Alternative minimum tax credit carryforwards        198        199
       Net operating loss carryforward                   5,928      1,639
       Valuation allowance                              (2,887)         -
                                                      ---------  ---------

                                                      $  3,364   $  1,921
                                                      =========  =========
</Table>

     The foreign tax credit carry forward of $162 expires during 2001.
     Management believes it is more likely than not that the Company will have
     sufficient foreign and domestic income to utilize the credits before
     expiration.

     The Company has sustained net operating losses in each of the periods
     presented. As of December 31, 1999, the Company had net operating loss
     carryforwards for tax reporting purposes of approximately $16,100 expiring
     in various years through 2019. Since realization of these net operating
     loss carryforwards is uncertain a valuation allowance has been recorded to
     reduce the net deferred tax asset to an amount which management believes is
     more likely than not to be utilized. The increase in the valuation
     allowance was $2,887 for the year ended December 31, 1999 and $0 for 1998
     and 1997.

NOTE K - LINES OF CREDIT

     During 1999 and 1998, the Company maintained a revolving line of credit
     with a domestic bank for the lesser of $6,000 or the available borrowing
     base. The interest rate is computed at 13 percent and requires monthly
     payments of interest. The Company had $5,258 in borrowings against the line
     at December 31, 1999 ($5,254 at December 31, 1998). The line of credit
     expired October 31, 1999 and was extended to December 31, 1999. The line of
     credit is collateralized by certain domestic receivables and inventories.
     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. At times during 1999 and at
     December 31, 1999, the Company was out of compliance on certain
     indebtedness covenants. Subsequent to year end the Company signed an
     extension of the line of credit through August 31, 2000 which included a
     waiver for the non-compliance with the covenants as of December 31, 1999.
     The Company is currently reviewing several financing alternatives.

                                      F-16
<Page>

                     Daw Technologies, Inc. and Subsidiaries

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        December 31, 1999, 1998 and 1997
                        (in thousands, except share data)

NOTE L - LONG-TERM OBLIGATIONS

     The Company has entered into capital leases with various financial
     institutions and leasing organizations that carry interest rates ranging
     from 4 percent to 11.5 percent. The leases are collateralized by equipment.
     Payments approximate $44 monthly including interest.

     The following is a schedule by year of future minimum lease payments under
     capital leases, together with the present value of the net lease payments
     as of December 31, 1999:

<Table>
<Caption>
     Year ending December 31,
     ------------------------
     <S>                                              <C>
       2000                                           $    499
       2001                                                 55
       2002                                                 32
       2003                                                 19
       2004                                                 18
                                                      ---------

     Total minimum leases payments                         623

     Less amount representing interest                      52
                                                      ---------

     Present value of net minimum lease payments           571

     Less current portion                                  461
                                                      ---------

     Long-term portion                                $    110
                                                      =========
</Table>

NOTE M - OPERATING LEASES

     The Company leases buildings, machinery and equipment under operating
     leases. The building leases expire in 2000 and 2005. The machinery and
     equipment leases expire through 2000. The following is a schedule, by year,
     of future minimum rental payments as of December 31, 1999:

<Table>
<Caption>
     Year ending December 31,
     ------------------------
       <S>                                            <C>
       2000                                           $  1,372
       2001                                                734
       2002                                                647
       2003                                                633
       2004                                                633
       Thereafter                                          303
                                                      ---------

                                                      $  4,322
                                                      =========
</Table>

                                      F-17
<Page>

                     Daw Technologies, Inc. and Subsidiaries

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        December 31, 1999, 1998 and 1997
                        (in thousands, except share data)

NOTE M - OPERATING LEASES - CONTINUED

     The building leases provide for payment of property taxes, insurance, and
     maintenance costs by the Company. Rental expense for operating leases
     totaled $2,314, $2,212 and $1,670 for 1999, 1998 and 1997, respectively.

     The Company has an option to renew one building lease for four additional
     five year periods upon expiration of the current term in 2005.

NOTE N - BENEFIT PLANS

     1. SAVINGS PLAN

     The Company has established a 401(k) savings plan covering all non-union
     employees 21 years of age and older. The Company, at its discretion,
     matches 50 percent of employee contributions up to a maximum matching
     contribution of 3 percent of the employee's annual salary. Contributions
     are made at the discretion of the Board of Directors. The Company's
     contributions to the plan were $147, $189 and $176 for the years ended
     December 31, 1999, 1998 and 1997, respectively.

     2. MULTI-EMPLOYER PENSION PLANS

     The Company contributes to several multi-employer pension plans for
     employees covered by collective bargaining agreements. Employees covered by
     these plans are engaged solely in on-site installation of cleanrooms. These
     plans are not administered by the Company and contributions are determined
     in accordance with provisions of negotiated labor contracts. The Company's
     contributions to the multi-employer pension plans totaled approximately
     $128, $269 and $303, respectively, for the years ended December 31, 1999,
     1998 and 1997. Information with respect to the Company's proportionate
     share of the excess, if any, of the actuarially computed value of vested
     benefits over the total pension plans' net assets is not available from the
     plans' administrators.

     The Multi-Employer Pension Plan Amendments Act of 1980 (The "Act")
     significantly increased the pension responsibilities of participating
     employers. Under the provision of the Act, if the plans terminate or the
     Company withdraws, the Company could be subject to a withdrawal liability.
     Management has no intention of undertaking any action which could subject
     the Company to any withdrawal liability which would have a material effect
     on the Company's financial condition.

                                      F-18
<Page>

                     Daw Technologies, Inc. and Subsidiaries

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        December 31, 1999, 1998 and 1997
                        (in thousands, except share data)

NOTE O - LEGAL PROCEEDINGS AND CLAIMS

     The Company is engaged in various lawsuits and claims, either as plaintiff
     or defendant, in the normal course of business. In the opinion of
     management, based upon advice of counsel, the ultimate outcome of these
     lawsuits will not have a material impact on the Company's financial
     position or results of operations.

NOTE P - PRIMARY CUSTOMERS

     The Company has typically had one to three customers in each year which
     accounted for more than 10 percent each of revenues; these customers do not
     necessarily remain significant in subsequent years. These major customers
     are typically general contractors of fabrication facilities.

     The Company's major customers and revenue received therefrom are as
     follows:

<Table>
<Caption>
                                              1999       1998       1997
                                            ---------  ---------  ---------
     <S>                                    <C>        <C>        <C>
     Company A                              $ 10,625   $  6,580   $      -
     Company B                                 5,337          -          -
     Company C                                 4,508      7,912          -
     Company D                                     -          -      7,241
</Table>

NOTE Q - RELATED PARTY TRANSACTIONS

     Daw Incorporated is a regional interior specialties contracting company
     based in Utah. Certain stockholders of Daw Incorporated own approximately
     34 percent of the Company's common stock.

     The Company purchased goods and services from Daw Incorporated totaling
     $71, $447, and $223 in 1999, 1998 and 1997, respectively.

     A member of the board of directors works for a law firm which provided
     legal services to the Company approximating $19, $171 and $138 in 1999,
     1998 and 1997, respectively.

                                      F-19
<Page>

                     Daw Technologies, Inc. and Subsidiaries

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        December 31, 1999, 1998 and 1997
                        (in thousands, except share data)

NOTE R - WARRANTS AND OPTIONS

     During 1996, the Board of Directors and the shareholders amended the
     Company's 1993 Stock Option Plan (Plan) to increase the number of shares
     reserved for issuance by 250,000. In addition, the amendment extended the
     life of the Plan for one year, and eliminated the limit on the number of
     options that can be granted in any given year. Also, the amendment limits
     to 100,000 the number of options that can be granted to any one individual
     in any given year. The Plan is a non-qualified plan, and the options
     granted thereunder are non-qualified stock options.

     Under the amended Plan, 1,250,000 shares of common stock were reserved for
     issuance upon exercise of options. The Plan provides that options to
     purchase a maximum of 1,075,000 shares may be granted to eligible employees
     (including employees who are directors or officers) and options to purchase
     a maximum of 175,000 shares may be granted to non-employee directors.

     The exercise price for stock options granted under the Plan may not be less
     than 100 percent of the fair market value of a share of common stock on the
     date the option is granted. Options granted under the Plan after October
     24, 1996 expire through 2008. Options granted prior to or on October 24,
     1996 expire through 2011.

     The Company granted options to purchase 311,500 shares and 55,000 shares in
     1998 and 1997, (none in 1999), respectively, of the Company's common stock.
     The options were granted to the following:

<Table>
<Caption>
                                                1999         1998        1997
                                            ----------   -----------  -----------
     <S>                                           <C>      <C>          <C>
     Directors                                      -        20,000      20,000

     Executive officers, including
        officers who are directors                  -        60,000      30,000

     Other employees                                -       231,500       5,000
                                            ----------   -----------  -----------

                                                    -       311,500      55,000
                                            ==========   ===========  ===========
</Table>

     On February 24, 1998, certain options with an exercise price greater than
     $1.40 were adjusted to $1.40, which was the market price of the Company's
     stock on that date. At that date, vesting was extended by one year for
     those options adjusted. These adjustments resulted in a new measurement
     date under interpretations to Accounting Principles Board Opinion No. 25.

                                      F-20
<Page>

                     Daw Technologies, Inc. and Subsidiaries

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        December 31, 1999, 1998 and 1997
                        (in thousands, except share data)

NOTE R - WARRANTS AND OPTIONS - CONTINUED

     The Company has adopted only the disclosure provisions of Financial
     Accounting Standard No. 123, "Accounting for Stock-Based Compensation" (FAS
     123). Therefore, the Company continues to account for stock based
     compensation under Accounting Principles Board Opinion No. 25, under which
     no compensation cost has been recognized. Had compensation cost for the
     stock based compensation been determined based upon the fair value of the
     awards at the grant date consistent with the methodology prescribed by FAS
     123, the Company's net loss and loss per share would have been increased to
     the following pro forma amounts:

<Table>
<Caption>
                                                 1999         1998      1997
                                               ----------   --------  --------
     <S>                                       <C>          <C>       <C>
     Net loss                   As reported    $  (9,729)   $(3,922)  $(2,259)
                                Pro forma         (9,903)    (4,074)   (2,458)
     Loss per share-basic       As reported       (0.78)      (0.32)    (0.18)
                                Pro forma         (0.79)      (0.33)    (0.20)
     Loss per share-diluted     As reported       (0.78)      (0.32)    (0.18)
                                Pro forma         (0.79)      (0.33)    (0.20)
</Table>

     These pro forma amounts may not be representative of future disclosures
     because they do not take into effect pro forma compensation cost related to
     grants made before 1995. The fair value of these options was estimated at
     the date of grant using the modified Black-Scholes American option-pricing
     model with the following weighted-average assumptions for 1998 and 1997:
     expected volatility 53 percent for 1998 and 1997; risk-free interest rate
     of 6.05 percent for 1998 and 1997; and expected life of 9.6 years for 1997
     and 1996. The weighted-average fair value of options granted was $1.17 and
     $1.60 in 1998 and 1997, respectively.

     Option pricing models require the input of highly subjective assumptions
     including the expected stock price volatility. Also, the Company's employee
     stock options have characteristics significantly different from those of
     traded options, and changes in the subjective input assumptions can
     materially affect the fair value estimate. Management believes the best
     input assumptions available were used to value the options and that the
     resulting option values are reasonable.

                                      F-21
<Page>

                     Daw Technologies, Inc. and Subsidiaries

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        December 31, 1999, 1998 and 1997
                        (in thousands, except share data)

NOTE R - WARRANTS AND OPTIONS - CONTINUED

     Changes in the Company's stock options and warrants are as follows:

<Table>
<Caption>
                                                    Shares                                     Weighted-
                                        ------------------------------       Exercise           average
                                                             Stock             price        exercise price
                                           Warrants         options          per share         per share
                                        --------------   -------------   ----------------   --------------
     <S>                                       <C>            <C>        <C>                <C>
     Outstanding at January 1, 1997             6,600         736,500    $  2.50 - 3.50     $     3.41
       Granted                                      -          55,000       1.94 - 3.00           2.24
       Exercised                                    -               -                 -              -
       Canceled or expired                     (6,600)        (98,500)      2.50 - 3.50           3.30
                                        --------------   -------------

     Outstanding at December 31, 1997               -         693,000       1.94 - 3.50           3.32
       Granted                                      -         311,500       0.84 - 2.66           2.28
       Exercised                                    -               -                 -              -
       Canceled or expired                          -        (135,500)      1.38 - 3.50           3.05
                                        --------------   -------------

     Outstanding at December 31, 1998               -         869,000       0.84 - 3.50           1.99
       Granted                                      -               -                -               -
       Exercised                                    -               -                -               -
       Canceled or expired                          -        (127,500)      1.40 - 2.66           1.78
                                        --------------   -------------
     Outstanding at December 31, 1999               -         741,500       0.84 - 3.50           2.03
                                        ==============   =============
     Exercisable at December 31, 1999               -         636,000       0.84 - 3.50           1.99
                                        ==============   =============
     Exercisable at December 31, 1998               -               -                 -              -
                                        ==============   =============
     Exercisable at December 31, 1997               -         535,500       3.00 - 3.50           3.44
                                        ==============   =============
</Table>

     A summary of the status of the options outstanding under the Company's
     stock option plan at December 31, 1999 is presented below:

<Table>
<Caption>
                                               Outstanding                        Exercisable
                                ----------------------------------------   -------------------------
                                                 Weighted-    Weighted-                    Weighted-
                                                  average     average                       average
                                                 remaining    exercise                     exercise
                                   Number       contractual     price         Number        price
     Range of exercise prices    outstanding   life (years)                exercisable
     ------------------------   ------------   ------------   ----------   -----------   -----------
     <S>                            <C>            <C>          <C>           <C>            <C>
     $ 0.84 - $ 1.25                 40,000        8.82         $ 0.97         30,000        $ 0.92
     $ 1.26 - $ 1.50                391,000        5.94           1.40        370,750          1.40
     $ 1.51 - $ 2.00                      -          -            -                 -             -
     $ 2.01 - $ 2.50                 20,000        7.89           2.22         20,000          2.22
     $ 2.51 - $ 3.00                150,500        8.41           2.66         75,250          2.66
     $ 3.00 - $ 3.50                140,000        5.94           3.41        140,000          3.41
                                ------------                               -----------

     $ 0.84 - $ 3.50                741,500        6.65         $ 2.03        636,000        $ 1.99
                                ============                               ===========
</Table>

                                      F-22
<Page>

                     Daw Technologies, Inc. and Subsidiaries

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        December 31, 1999, 1998 and 1997
                        (in thousands, except share data)

NOTE S - EARNINGS (LOSS) PER COMMON SHARE

     The following data show the shares used in computing earnings (loss) per
     common share including dilutive potential common stock:

<Table>
<Caption>
                                                            1999          1998            1997
                                                        ------------  -------------  --------------
     <S>                                                 <C>            <C>             <C>
     Common shares outstanding entire
       period                                            12,479,711     12,407,977      12,400,543

     Net weighted average common shares issued during
       period                                                22,269         32,144          15,414
                                                        ------------  -------------  --------------

     Weighted average number of common shares used in
       basic EPS                                         12,501,980     12,440,121      12,415,957

     Dilutive effect of stock options                             -              -               -

     Dilutive effect of warrants                                  -              -               -
                                                        ------------  -------------  --------------

     Weighted average number of common shares and
       dilutive potential common shares used in
       diluted EPS                                       12,501,980     12,440,121      12,415,957
                                                        ============  =============  ==============
</Table>

     For the years ended December 31, 1999, 1998 and 1997, all of the options
     and warrants that were outstanding, as described in Note R, were not
     included in the computation of diluted EPS because to do so would have been
     anti-dilutive.

NOTE T - BUSINESS ACQUISITION

     On April 22, 1998, the first closing date, the Company acquired the net
     assets of Intelligent Enclosures Corporation. The transaction was accounted
     for as a purchase and the transaction is to be completed on April 22, 2000,
     the second closing date. At the first closing date, the Company delivered
     27,023 shares of common stock. At the second closing date, the Company will
     issue additional shares of common stock at the average per share closing
     price for the 20 consecutive trading days prior to the second closing date,
     which in addition to the original 27,023 shares will equal $1,300.

                                      F-23
<Page>

                     Daw Technologies, Inc. and Subsidiaries

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        December 31, 1999, 1998 and 1997
                        (in thousands, except share data)

NOTE U - SEGMENT INFORMATION

     The Company has two reportable segments for the year ended December 31,
     1999, namely 1) cleanrooms and related products and 2) other manufactured
     goods. Prior to 1998, the Company operated in one segment. The accounting
     policies of the segments are the same as those described in the summary of
     significant accounting policies. The Company evaluates performance of each
     segment based on earnings 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 are as follows:

<Table>
<Caption>
                                                 1999         1998         1997
                                              -----------  -----------  -----------
     <S>                                      <C>          <C>          <C>
     Revenues
       Cleanrooms and related products        $   30,775   $   46,298   $   52,541
       Other products                             13,236        6,780            -
                                              -----------  -----------  -----------

          Totals                              $   44,011   $   53,078   $   52,541
                                              ===========  ===========  ===========

     Operating profit (loss)
       Cleanrooms and related products        $     (856)  $   (6,005)  $   (3,781)
       Other products                             (9,288)         491            -
                                              -----------  -----------  -----------

          Totals                              $  (10,144)  $   (5,514)  $   (3,781)
                                              ===========  ===========  ===========

     Total assets
       Cleanrooms and related products        $   15,535   $   15,053   $   16,174
       Other products                              2,284        1,397            -
       Manufacturing and corporate assets          7,056       14,391       16,190
                                              -----------  -----------  -----------

          Totals                              $   24,875   $   30,841   $   32,364
                                              ===========  ===========  ===========
</Table>

                                      F-24
<Page>

                     Daw Technologies, Inc. and Subsidiaries

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        December 31, 1999, 1998 and 1997
                        (in thousands, except share data)

NOTE V - REVENUES

     Revenues by country are based on the location of the project for long-term
     projects and by the location of the customer for other manufactured
     products and are as follows:

<Table>
<Caption>
                                         1999          1998         1997
                                      -----------  -----------  ----------
          <S>                         <C>          <C>          <C>
          Canada                      $   11,827   $    6,666   $        -
          United Kingdom                   5,893        6,692        2,068
          Peoples Republic of China          382        7,092        2,389
          Italy                               42        3,568            -
          Taiwan                           2,711        2,319        3,910
          Malaysia                             -            -        2,669
          Israel                           3,366        2,058        4,449
          France                             448          644        4,999
          All others                           -          198          644
                                      -----------  -----------  ----------

               Total export revenues      24,669       29,237       21,128

          United States                   19,342       23,841       31,413
                                      -----------  -----------  ----------

               Total revenues         $   44,011   $   53,078   $   52,541
                                      ===========  ===========  ==========
</Table>

NOTE W - RESTRUCTURING CHARGES

     During December 1999, in order to reduce costs, the Company implemented a
     restructuring of its operations which resulted in the Company recording a
     one-time restructuring charge totaling $1,839. This one-time charge
     resulted from the disposition of the Company's Asia/Pacific office ($796)
     and the write down of inventory due to the Company's plans to pursue a
     foundry strategy for the manufacture of cleanroom components ($1,043).

                                      F-25
<Page>

                     Daw Technologies, Inc. and Subsidiaries

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        December 31, 1999, 1998 and 1997
                        (in thousands, except share data)

NOTE X - QUARTERLY FINANCIAL RESULTS (UNAUDITED)

     Quarterly financial results for the years ended December 31, 1999, 1998 and
     1997 are as follows:

<Table>
<Caption>
                                                                                                   Net earnings
                                                                    Earnings           Net          (loss) per
                                                     Gross        (loss) from        earnings        common
                1999                Revenues      profit (loss)    operations         (loss)       share-basic
       -----------------------   --------------   -------------  ----------------  -------------   -------------
       <S>                       <C>              <C>            <C>               <C>             <C>
       First quarter             $      12,480    $      1,577   $          (390)  $       (316)   $      (0.03)
       Second quarter                    9,980              47            (2,019)        (1,442)          (0.12)
       Third quarter                    12,433             774            (1,018)        (1,129)          (0.09)
       Fourth quarter                    9,118          (2,437)           (6,717)        (6,842)          (0.54)
                                 --------------   -------------  ----------------  -------------   -------------
                                 $      44,011    $        (39)  $       (10,144)  $     (9,729)   $      (0.78)
                                 ==============   =============  ================  =============   =============

<Caption>
                1998
       -----------------------
       <S>                       <C>              <C>            <C>               <C>             <C>
       First quarter             $      11,441    $        486   $        (1,298)  $       (831)   $     (0.07)
       Second quarter                   12,888          (1,768)           (3,719)        (2,403)         (0.19)
       Third quarter                    14,332             952              (878)          (748)         (0.06)
       Fourth quarter                   14,417           2,185               381              60              -
                                 --------------   -------------  ----------------  -------------   -------------
                                 $      53,078    $      1,855   $        (5,514)  $     (3,922)   $      (0.32)
                                 ==============   =============  ================  =============   =============

<Caption>
                1997
       -----------------------
       <S>                       <C>              <C>            <C>               <C>             <C>
       First quarter             $      16,795    $      2,583   $           327   $        182    $       0.02
       Second quarter                   16,463           2,398                97             15               -
       Third quarter                    11,453           2,036                46             48               -
       Fourth quarter                    7,830          (1,748)           (4,251)        (2,504)          (0.20)
                                 --------------   -------------  ----------------  -------------   -------------
                                 $      52,541    $      5,269   $        (3,781)  $     (2,259)   $      (0.18)
                                 ==============   =============  ================  =============   =============
</Table>

NOTE Y - RESTATEMENT OF FINANCIAL STATEMENTS

     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.

     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.

                                      F-26
<Page>

                     Daw Technologies, Inc. and Subsidiaries

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        December 31, 1999, 1998 and 1997
                        (in thousands, except share data)

NOTE Y - RESTATEMENT OF FINANCIAL STATEMENTS - CONTINUED

-  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.

     The Company's financial statements for 1999, 2000 and the first two
quarters of 2001 have been restated to correct the errors noted above. In the
opinion of management, all material adjustments necessary to correct the
financial statements have been recorded.

     The impact of these adjustments on the Company's 1999 financial results and
financial condition as originally reported is summarized below (in thousands,
except per share data):

<Table>
<Caption>
                                                         As
                                                      Previously      As
                                                      Reported     Restated
                                                      ----------   ----------
             <S>                                      <C>          <C>
             Consolidated balance sheet:
              Current assets                          $  18,343    $  17,435
              Property and equipment - net, at cost       3,402        3,110
              Total assets                               26,075       24,875
              Current liabilities                        15,457       16,462
              Total shareholders' equity                 10,508        8,303

             Consolidated statement of operations:
              Revenue, net                            $  45,206    $  44,011
              Cost of goods sold                         43,576       44,050
              Gross profit (loss)                         1,630          (39)
              Operating expenses                          9,870       10,105
              Loss from operations                       (8,240)     (10,144)
              Other income (expense), net                  (493)        (677)
              Net loss                                   (7,641)      (9,729)
              Net loss per common share
               basic and diluted                      $   (0.61)   $   (0.78)

</Table>

                                      F-27
<Page>

                              REPORT OF INDEPENDENT
                          CERTIFIED PUBLIC ACCOUNTANTS
                                   ON SCHEDULE

Board of Directors
Daw Technologies, Inc. and Subsidiaries

In connection with our audit of the consolidated financial statements of Daw
Technologies, Inc. and Subsidiaries referred to in our report dated April 7,
2000, except for Note Y for which the date is April 5, 2002, which is included
in the annual report to shareholders and Form 10-K, we have also audited
Schedule II - valuation and qualifying accounts for each of the three years in
the period ended December 31, 1999. In our opinion, this schedule presents
fairly, in all material respects, the information required to be set forth
therein.

                                                /s/ Grant Thornton LLP

Salt Lake City,
Utah April 7, 2000, except for Note Y for
which the date is April 5, 2002

                                       S-1
<Page>

                     DAW TECHNOLOGIES, INC. AND SUBSIDIARIES

                 SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

                                 (IN THOUSANDS)

<Table>
<Caption>
---------------------------------------------------------------------------------------------------------------------------------
                           COLUMN A                     COLUMN B             COLUMN C                   COLUMN D        COLUMN E
---------------------------------------------------------------------------------------------------------------------------------
                                                                             ADDITIONS
---------------------------------------------------------------------------------------------------------------------------------
                                                                        (1)            (2)
                                                       BALANCE AT     CHARGED TO     CHARGED TO                       BALANCE AT
                                                      BEGINNING OF    COSTS AND    OTHER ACCOUNTS     DEDUCTIONS -      END OF
                         DESCRIPTION                    PERIOD         EXPENSES       DESCRIBE         WRITE-OFFS       PERIOD
---------------------------------------------------------------------------------------------------------------------------------
<S>                                                          <C>         <C>            <C>                <C>         <C>
Allowance for doubtful accounts
  Year ended December 31, 1999                               $ 615       $  360         $      -           $   675     $   300
  Year ended December 31, 1998                                 403          100              150(A)            (38)        615
  Year ended December 31, 1997                                 376          180                -              (153)        403

Allowance for contract estimates and warranties
  Year ended December 31, 1999                               $ 666       $    -         $      -           $   357     $   309
  Year ended December 31, 1998                                 366            -              300(A)              -         666
  Year ended December 31, 1997                                 575          654                -              (863)        366

Allowance for inventory obsolescence
  Year ended December 31, 1999                               $ 300       $    -         $  1,043(B)        $ 1,043     $   300
  Year ended December 31, 1998                                   -            -              300(A)              -         300
  Year ended December 31, 1997                                   -            -                -                 -           -

Allowance for contract repayment
  Year ended December 31, 1999                               $  53       $    -         $      -           $     -     $    53
  Year ended December 31, 1998                                 803            -             (750)(A)             -          53
  Year ended December 31, 1997                                 803            -                -                 -         803

Valuation allowance for deferred taxes
  Year ended December 31, 1999                               $   -       $2,887         $      -           $     -     $ 2,887
  Year ended December 31, 1998                                   -            -                -                 -           -
  Year ended December 31, 1997                                   -            -                -                 -           -

</Table>

(A) Reclassification
(B) Restructuring charge

                                       S-2