UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2001 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to __________ COMMISSION FILE NUMBER 333-92019 PLASTICS MFG. COMPANY (Exact name of registrant as specified in charter) W190 N11701 MOLDMAKERS WAY WISCONSIN GERMANTOWN, WISCONSIN 53022-8214 (State of incorporation) (Address of principal executive office) 39-1867101 (I.R.S. Employer Identification Number) Registrant's telephone number, including area code: 262-255-5790 Securities registered pursuant to Section 12(b) of the Act: NONE Securities registered pursuant to Section 12(g) of the Act: NONE Indicate by check 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 report), 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. checked-box There is no established trading market for the registrant's stock. The number of common shares outstanding at December 15, 2001 was 3,809,612. TABLE OF CONTENTS PAGE PART I Item 1. Business ................................................... 1 Item 2. Properties ................................................. 7 Item 3. Legal Proceedings .......................................... 8 Item 4. Submission of Matters to a Vote of Security Holders ........ 8 PART II Item 5. Market for the Registrant's Common Equity and Related Stockholder Matters ..................................... 9 Item 6. Selected Financial Data ................................... 10 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations ................................ 11 Item 7A. Quantitative and Qualitative Disclosure About Market Risk .13 Item 8. Financial Statements and Supplementary Data ............... 14 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosures ..................... 34 PART III Item 10. Directors and Executive Officers of the Registrant ....... 35 Item 11. Executive Compensation ................................... 37 Item 12. Security Ownership of Certain Beneficial Owners and Management ............................................... 38 Item 13. Certain Relationships and Related Transactions ........... 39 PART IV Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K ................................................. 41 PART I ITEM 1. BUSINESS. In this Annual Report on Form 10-K, the terms "we," "us" and "our" refer to Plastics Mfg. Company. Unless otherwise noted, these terms also include our wholly owned subsidiaries, including TecStar Mfg. Company, Statistical Plastics Corporation and PCI Consulting and Leasing, Inc. OUR BUSINESS GENERAL We manufacture high volume, precision injection molded plastic parts for original equipment manufacturers in the medical, automotive, appliance, telecommunications, cosmetic, and computer markets. Services offered by us also include value-added and assembly operations and, through Statistical Plastics, mold sampling. Value-added operations include, but are not limited to, pad printing, heat staking, and sonic welding. Our customers are other manufacturers which produce end-use products or manufacture components for sale to other manufacturers. Our manufacturing business has been principally conducted through our wholly- owned subsidiary, TecStar Mfg. Company. The manufacture of plastic parts and performance of value-added operations for unrelated customers is done on a purchase order basis. This portion of our business represented approximately 86% of our net sales in fiscal 2001. An important part of our business is our operations in conjunction with affiliated companies in an industry niche as a "turn-key" manufacturer. Engineering, design, mold making, polishing and testing services are provided by Moldmakers, Incorporated, an affiliated company. During the last fiscal year, approximately 14% of our net sales was derived from business which involved services of Moldmakers, Incorporated. DEVELOPMENTS IN FISCAL YEAR 2001 On December 31, 2000, we acquired the stock of Statistical Plastics. Statistical Plastics provides mold sampling of new and rebuilt tooling and develops processing parameters for high volume plastic parts production. Approximately 9% of Statistical Plastics' revenue for its most recent fiscal year prior to our acquisition was derived from business with us. On March 31, 2001, we purchased the stock of PCI Consulting and Leasing, Inc. PCI is also a former affiliate of Moldmakers, Incorporated and is engaged in leasing and investment activities. Approximately 65% of our plastic molding equipment was leased from PCI at the time of our acquisition. -1- On June 1, 2001, we entered into a strategic alliance agreement with each of Mikron Holding AG ("Mikron") and Balda-Mikron AG ("BMJV"). Mikron and BMJV are affiliates, with principal offices in Switzerland. The agreements were entered into to enable the parties to market and perform certain business consulting, engineering and production services. Our main goals are to make global manufacturing capabilities available to our principal customers and to gain access to additional technologies. The infrastructures of Mikron and BMJV are expected to serve as a learning model for us as well as provide us with partners that are well respected in the global plastics industry. We are able to provide Mikron and BMJV with a strong U.S. player in plastics mechanical systems to succeed in the U.S. market, specific technological advances made by us, and attractive tooling capacity and capability. As part of the strategic alliance with Mikron, the parties agreed to establish a joint venture which now operates as Mikron TecStar, LP. The agreements do not contain any other specific marketing or production requirements for any party, but rather set forth a framework for cooperation in the manufacturing of molds and plastics mechanical systems in various product areas. Pursuant to our strategic alliance, on September 15, 2001, our wholly-owned subsidiary, TecStar Manufacturing, Inc., entered into a joint venture with Mikron Infocom Technology Corp. Texas and Mikron Delaware Corporation and acquired a 50% interest in Mikron TecStar, LP, a limited partnership. Mikron TecStar, LP operates a facility in San Antonio, Texas, which produces plastic components and assemblies for the medical, infocom and office applications markets. Mikron TecStar began operations in late September, 2001. Mikron Infocom and Mikron Delaware are affiliates of Mikron Technology Group Switzerland. During 2001, our Board of Directors gave further consideration to the strategic and operational advantages to be gained by consolidating our operations with Moldmakers, Incorporated (consisting of several companies previously described in our reports as the "MGS Group"). At year-end, further consolidation between us and Moldmakers, Incorporated was still under consideration, but no definitive agreements had been reached or are contemplated in the near future. MOLDMAKERS, INCORPORATED Mark G. Sellers is our Chairman, President, and Chief Executive Officer and he controls directly or indirectly at least 51% of the voting interests of Moldmakers, Incorporated and each of its subsidiaries. Mr. Sellers and Moldmakers, Incorporated collectively own approximately 49.89% of our outstanding common stock. References in this report to "Moldmakers, Incorporated" or "Moldmakers" include all subsidiaries and affiliates of Moldmakers, Incorporated except for us and our subsidiaries. We also rely on Moldmakers, Incorporated to provide management, accounting, information system, and human resource services. Our principal production facility is leased from a Moldmakers, Incorporated company. See Item 13, Certain Relationships and Related Transactions. -2- THE INDUSTRY The plastics manufacturing business is a multi-billion dollar industry. According to an annual survey published in the April 23, 2001 issue of PLASTIC NEWS, the 100 largest injection molders had combined sales in excess of $16.6 billion in 2000. In 2000, the same survey indicated that the 100 top molders had combined sales in excess of $18.7 billion in 1999. We operate in a majority of the 25 market segments in which the top 100 molders conducted operations in 2000. There are an estimated 3,800 independent plastic molding companies in the United States, most of which are privately held and have sales volumes of under $10 million per year. However, within the high technology, specialized plastics manufacturing segment of the market, we compete with many companies which have more operating experience, more capital or financing, and greater sales and income levels. We believe our principal competitors and their approximate 2000 sales volumes are:

Approximate ~~1999~~2000 COMPETITOR SALES VOLUME{(1)} Nypro, Inc. $~~405~~478 million Clinton, MA Phillips Plastics Corp. $~~217~~238 million Hudson, WI InteSys Technologies, Inc. $~~150~~160 million Gilbert, AZ ~~Hoffer~~Advance ~~Plastics~~Dial ~~Corp~~Co. $79 80 million ~~South Elgin~~Elmhurst, IL ~~Advance~~Hoffer ~~Dial~~Plastics CoCorp. $72 76 million ~~Elmhurst~~South Elgin, IL Evco Plastics $50 58 million DeForest, WI {(1)} As reported in PLASTICS NEWS, April 1723, ~~2000~~2001.

Arrangements with most independent molding companies are in the form of purchase orders that may be canceled by the customer. Competition in the industry is based on piece price, quality, and service. -3- CUSTOMERS Our customer list currently includes approximately 12 Fortune 500 companies and approximately 125 other companies. In 2000, we received approximately 44% of our manufacturing revenue from our arrangement with Motorola, Inc. to produce plastic parts for nine of its divisions which produce consumer communications products. Under an agreement with the Paslode Cordless Tool Group of Illinois Tool Works, Inc., we will provide injection molded parts to Paslode through September 30, 2004. Paslode designs and manufactures fasteners and power tools for the residential construction industry. Under this agreement, we have installed approximately $5.0 million of equipment and improvements into the Paslode facility at Green Oaks, Illinois, to produce products for Paslode. We have the use of approximately 29,000 square feet of space at the Paslode facility. Production under this agreement began in October, 1999. Sales under this agreement were approximately $3.5 million for fiscal year 2001. The agreement may be terminated upon 180 days notice by either Paslode or us. If terminated by Paslode, other than for cause, during the initial five-year term, Paslode is required to reimburse us for our capital costs associated with the equipment and other related costs. Sales to Moldmakers, Incorporated represented approximately 2% of our revenue in 2001 and 6% in 2000. These sales consisted mainly of machine time and related labor. During 2001, we derived approximately 38% of our revenues from sales outside of the United States. Information concerning revenues derived from different geographic areas is set forth under Note 13 in the notes to our consolidated financial statements set forth in Item 8. Our finished products are shipped to customers by common carrier in most instances. BACKLOG AND WORKING CAPITAL At September 30, 2001, we had a backlog of orders in the amount of approximately $19,900,000, compared to a backlog of approximately $8,200,000 on September 30, 2000. This increase is attributable to the growth of our business in 2001 as sales revenue increased approximately 95% in 2001 over the 2000 fiscal year. Because of the length of time between entering an order, shipping the product and recording the sale can vary significantly from order to order, we believe that backlog levels should not be relied upon as an indicator of future sales volume. Our purchase orders often call for the delivery of finished products over an extended period of time. These delivery periods commonly range from one to 12 months. As is customary in our industry, we carry adequate amounts of raw materials inventory to facilitate the manufacture of products for which we have purchase orders in hand. In addition, in order to make the best use of manufacturing efficiencies, we may produce an entire order in one production run and hold finished goods in inventory until the purchase order requires delivery. -4- TRADEMARKS AND PATENTS Our business is not dependent upon trademark or patent rights. We have access to certain proprietary techniques such as "multi-shot" injection process capability developed by Moldmakers, Incorporated. Multi-shot injection molding is an injection process in which different types of plastic resin, typically with different aesthetic and texture qualities, are used to create a single plastic part. Demand for multi- shot injection molding has increased dramatically throughout the industry with applications in everything from toothbrushes to cellular telephones. We are a leader in this emerging market. We believe that this type of technology enhances our productivity and competitiveness. RAW MATERIALS The principal raw materials we use in the manufacture of plastic parts are pelletized plastic resins. These resins are purchased at open market prices from several manufacturers. The resins used in our manufacturing process are petroleum or natural gas derivatives and their availability and price could be affected by the supply or prices of petroleum. However, we have not experienced shortages in our operating history and do not foresee any material increases in pricing. We believe that should the cost of resins increase substantially, it may have a short-term adverse impact on our operating results, but that we will be able to recover most price increases from our customers in the form of higher prices for our products. ENVIRONMENTAL REGULATIONS We are subject to various federal, state and local laws and regulations including, without limitation, laws and regulations concerning the containment and disposal of hazardous waste and other waste materials which directly or indirectly affect our operations. Environmental laws and regulations typically impose "strict liability" for some environmental damages. Accordingly, in some situations, we could be liable for clean up costs even if the situation resulted from previous conduct that was lawful at the time or from improper conduct of, or conditions caused by, previous property owners, lessees or other persons not associated with us or events outside of our control. Such clean up or costs associated with changes in environmental laws and regulations could be substantial and could have a materially adverse effect on our consolidated financial position, results of operations or cash flows. Our plastic products business routinely uses chemicals and solvents, some of which are classified as hazardous substances. Use of these materials is generally limited to the spray application of solvents to clean molds. No special handling of used material is currently required. Plastic resin and scraps may be recycled or sent to landfills. We believe we are currently in material compliance with existing environmental protection laws and regulations. We are not involved in any significant remediation activities or administrative or judicial proceedings arising under federal, state or local environmental protection laws and regulations. EMPLOYEES At September 30, 2001, we employed approximately 289 full-time and approximately 175 temporary, full-time employees, of which 288 are production workers and 176 are office, managerial, engineering and technical employees. Our principal executive officers are also -5- officers and employees of Moldmakers, Incorporated and its other affiliated companies. None of our employees is represented under a collective bargaining agreement. We consider our relations with our employees to be satisfactory and have not experienced any job actions or labor shortages since our inception. Management, accounting, information systems, and human resource services are provided by Moldmakers, Incorporated companies. CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS This report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (the "Reform Act"). In addition, certain statements in future filings by us with the Securities and Exchange Commission, reports to shareholders, press releases, and other oral and written statements made by or with our approval which are not statements of historical fact will constitute forward-looking statements within the meaning of the Act. Our forward-looking statements may be identified by, among other things, expressions of our beliefs or expectations that certain events may occur or are anticipated, and projections or statements of expectations with respect to (i) various aspects of our business (including, but not limited to, net income, the availability or price of raw materials, and customer demand for our products), (ii) our plans or intentions, (iii) the industry within which we operate, (iv) the economy, and (v) any other expressions of similar import or covering other matters relating to us, our business, and our operations. In making forward-looking statements within the meaning of the Reform Act, we undertake no obligation to publicly update or revise any such statement. Forward-looking statements are not guarantees of performance. Our forward-looking statements are based on information available to us as of the date of such statements and reflect our expectations as of such date, but are subject to risks and uncertainties that may cause actual results to vary materially. Many of the factors that will determine these results are beyond our ability to control or predict. Shareholders and others are cautioned not to put undue reliance on any forward-looking statements. In addition to specific factors which may be described in connection with any of our forward-looking statements, factors which could cause actual results to differ materially include, but are not limited to, the following: o The loss of the services of Mr. Sellers and disruption in our relationship with Moldmakers, Incorporated, or other affiliated companies. o The inability to obtain additional financing to continue to implement our plans for expanded operations. o Termination of key customer relationships, including those with Motorola, Inc. and ITW Paslode, Cordless Tool Group, a division of Illinois Tool Works, Inc. o The inability to generate sufficient cash flow to service our existing debt. -6- o A material decrease in the business of Moldmakers, Incorporated, or other affiliated companies. o The inability to hire or retain qualified personnel. o Increased competition from domestic or foreign manufacturers, including increases in competitive production capacity resulting in sales declines from reduced shipment volume and/or lower net selling prices in order to maintain shipment volume. o Changes in customer demand for our products due to overall economic activity affecting the rate of consumption of our products, growth rates of the end markets for our products, technological or consumer preference changes, or acceptance of our products by the markets served by us. o Increases in the cost of raw materials or increases in scrap and excess inventory or the inability to forecast such increases in making bids for production agreements. o Unforseen or recurring operational problems at any of our facilities causing significant lost production and/or cost increases. o Significant changes to our strategic plans such as a major acquisition or expansion, the disposition of assets or product lines, or the failure to successfully execute major capital projects or other strategic plans. o The inability to successfully integrate potential future acquisitions. o Changes in laws or regulations, including those designed to protect the environment, which affect us. Any changes required to comply with such laws or regulations may increase our capital expenditures and operating costs. ITEM 2. PROPERTIES. We lease a building of approximately 88,000 square feet owned by Moldmakers Leasing, an affiliate of Moldmakers, Incorporated. This leased space houses our production facilities, our assembly, engineering, and design functions and provides general office space. The facility is located immediately across the street from the MGS Technical Center, which houses the offices of Moldmakers, Incorporated and some of its design, engineering and operating staff. We also lease 12,800 square feet of warehouse space in Germantown, Wisconsin, from an unrelated party. Mikron TecStar, LP leases approximately 63,000 square feet of office and production space in San Antonio, Texas. -7- ITEM 3. LEGAL PROCEEDINGS. We may, from time to time, become involved in various legal proceedings in the ordinary course of our business. As of the date of filing of this report, we are not engaged in any legal proceedings and are not aware of any other claims which are likely to be asserted against us. ITEM 4. SUBMISSIONS OF MATTERS TO A VOTE OF SECURITY HOLDERS. No matters were submitted to a vote of stockholders during the fourth quarter of 2001. -8- PART II ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS. MARKET AND RELATED MATTERS Our common stock is not listed on a securities exchange or over-the- counter market. There is no established trading market for our common stock. As of December 15, 2001, there were approximately 330 holders of record for our common stock. We have not paid a dividend on our common stock since inception. We anticipate that we will retain all of our earnings in the foreseeable future to finance the continued growth and expansion of our businesses. We have no current intention to pay cash dividends. Our future dividend policy will depend on our earnings, capital requirements, requirements of the financing agreements to which we may be a party, financial condition, and other factors considered relevant by our board of directors. SALES OF UNREGISTERED SECURITIES During the 2001 fiscal year we made the following sales of unregistered securities: 1. On December 31, 2000, we acquired all of the issued and outstanding stock of Statistical Plastics Corporation in exchange for 705,900 shares of our common stock. As Statistical Plastics' major asset consisted of 705,000 shares of our common stock, the additional consideration to Statistical Plastics shareholders was 900 shares of our stock. The transaction was structured as a share exchange and was approved by the shareholders of Statistical Plastics. There were approximately 34 beneficial owners of Statistical Plastics common stock prior to the transaction. We relied on the exemption from registration afforded by section 3(a)(11) of the Securities Act of 1933 (the "Securities Act"), as amended, in effecting this transaction. All of the shareholders of Statistical Plastics were residents of the state of Wisconsin. 2. On March 31, 2001, we acquired all of the issued and outstanding stock of PCI Consulting and Leasing, Inc. in exchange for 16,800 shares of our stock. The transaction was structured as a share exchange and was approved by the shareholders of PCI. There were 4 beneficial owners of PCI common stock prior to the transaction. We relied on the exemptions from registration afforded by sections 3(a)(11) of the Securities Act, as amended, in effecting this transaction. All of the shareholders of PCI were residents of the state of Wisconsin. -9- ITEM 6. SELECTED FINANCIAL DATA.

PLASTICS MFG. COMPANY AND SUBSIDIARY SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA (In thousands, except per share data) YEAR ENDED SEPTEMBER 30, 1997 1998 1999 2000 2001 CONSOLIDATED STATEMENTS OF OPERATIONS DATA: Sales Trade $ $ 203 $5,778 $31,305 $64,007 Related parties 647 1,687 2,115 1,120 Total sales 850 7,465 33,420 65,127 Cost of goods sold Trade 354 4,575 19,919 41,596 Related parties 1,155 3,037 9,954 9,595 Total cost of goods sold 1,509 7,612 29,873 51,191 Gross profit (659) (147) 3,547 13,936 Operating expenses Trade 1 79 623 3,014 7,497 Related parties 2 203 172 642 Management fees - related party 43 373 784 Lease procurement fees - related party 1,818 0 Total operating expenses 3 325 2,986 4,440 7,497 Income (loss) from operations (3) (984) (3,133) (893) 6,439 Interest and other income (expense), net 6 - (17) (246) (602) Income (loss) before income tax expense 3 (984) (3,150) (1,139) 5,837 Income tax (1) 403 496 462 2,176 Income (loss) before cumulative effect of accounting change 2 (581) (2,654) (677) 3,661 Cumulative effect of accounting change, net of tax 0 (95) 0 Net income (loss) $ 2 $(581) $ (2,749) $ (677) $3,661 Per basic share: Income (loss) before cumulative effect of accounting change $ 0.00 $(0.24) $(1.01) $ (.18) $.96 Cumulative effect of accounting change (0.04) 0 Net income (loss) $ 0.00 $(0.24) $(1.05) (.18) $.96 Shares in computing basic net income (loss) 1,551 2,432 2,614 3,764 3,801 per share CONSOLIDATED BALANCE SHEET DATA: Cash $ 1,222 $ 10 $ 246 $ 48 $ 304 Total current assets 1,222 147 4,428 10,883 14,062 Total current liabilities 1 823 4,054 17,288 18,287 Noncurrent liabilities 0 0 0 211 5,437 Stockholders' equity 52 1,066 2,841 5,196 9,069 NOTES TO SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA (1)As of September 30, 1997, we were still a development stage company that had not commenced operations. The proceeds of our first stock offering were held in escrow until September 14, 1997. We then paid legal and accounting invoices related to organizing the company and the first offering. No other transactions took place during the fiscal year ended September 30, 1997. (2)All shares outstanding and earnings per share have been retroactively restated to reflect the 3-for-1 stock split on September 30, 1999.

-10- ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. RESULTS OF OPERATIONS Sales. We experienced a sales increase of 95% in 2001 over 2000 and 348% in 2000 over 1999. The continued increase in sales is primarily attributable to improved plant efficiency, increased customer demand, addition of new customers and acquisition of related parties. The acquisition of Statistical Plastics on December 31, 2000 and PCI Consulting & Leasing on March 31, 2001 accounted for approximately $3.8 million and $.5 million, respectively, of the increase for 2001. Our backlog of unfilled orders, believed to be firm, is up from $8.2 million at September 30, 2000 to $19.9 million at September 30, 2001. We continue to capitalize on our relationship with Moldmakers, Incorporated to produce tooling as part of our total manufacturing solution. Tooling sales for the year ended September 30, 2001 were $7.88 million, down slightly from $8.06 million for the year ended September 30, 2000. Cost of goods sold. Cost of goods sold increased 71% in 2001 over 2000 as compared to 292% in 2000 over 1999. However, when expressed as a percentage of sales, cost of goods sold decreased to 79% in 2001 as compared to 89% in 2000 and 102% in 1999. This decrease allowed us to recognize a gross profit of $13,936,000 for 2001 as compared to a gross profit of $3,547,000 for 2000 and a loss of $147,000 for 1999. That represents an increase in gross profit to 21% in 2001 from 11% in 2000 expressed as a percentage of sales. Materials as a percentage of molding sales increased to 36% for 2001 from 32% in 2000 and 23% in 1999. The increase in material costs is due to product mix and increased business in assembly and value-added services. Direct labor costs continued to increase in order to meet current and future sales growth. Comparing labor costs for the periods shows a significant decrease in labor as a percent of molding sales of 17% in 2001, 28% in 2000, and 38% in 1999. Fixed overhead also decreased from year to year with 2001 equaling 15% of total sales and 2000 equaling 18% of total sales. We received credits of approximately $1,506,000 in 2000 and $244,500 in 1999 with respect to various purchase orders for tooling which had been completed by related parties. The credits for the tooling purchase orders reflected adjustments to the contract price to reflect the actual costs incurred by the parties. No similar credits relating to purchase orders for tooling were received during 2001. SELLING AND ADMINISTRATIVE EXPENSES. Selling and administrative expenses for 2001 were $7,497,000 compared to $3,656,000 for 2000 and $795,000 in 1999. Selling and administrative expenses remained constant at 11% of total sales for 2001 and 2000. This increase is due to the addition of sales and management personnel in an effort to increase our customer base and meet the growing needs of current manufacturing operations. Additionally, the increase in selling and administrative costs is due to the acquisition of PCI on March 31, 2001. Before recognition of PCI selling and administrative expenses, selling and administrative expenses would have been $5,811,000 or 9% of total sales in 2001. During the third quarter of 2000 we reached an agreement to terminate the existing management agreements. The agreements called for us to -11- record a management fee equal to 5% of gross sales payable to various related entities for sales and marketing, consulting and reference services. Under those agreements we incurred a management fee of $784,000 in 2000 and $373,000 in 1999. Had the management agreements been in place during 2001 the management fee would have been $3,256,000. INTEREST EXPENSE. For 2001 interest expense totaled $839,000 compared with $265,000 for 2000 and $22,000 in 1999. Interest expense arises from borrowings on our line of credit and capital leases for equipment financing. Use of our line of credit has and will continue to increase with increased sales levels and the directly related increases in accounts receivable and inventory. INCOME TAX EXPENSE. Income tax expense was $2,176,000 for 2001 compared to a benefit of $462,000 for 2000 and $497,000 for 1999. These amounts are calculated as a percentage of pre-tax income, and reflect, accordingly, the pre-tax loss or pre-tax income at the end of the above stated periods. NET INCOME. Net income for 2001 was $3,661,000 compared to a loss of $677,000 in 2000 and $2,749,000 in 1999. We were able to greatly increase profitability due to the rapid sales increase and the corresponding increase in utilization of labor and equipment. During 2001, SPC and PCI accounted for $374,000 and $296,000, respectively, of the net income figures or 10.2% and 8.1% of the total. LIQUIDITY AND CAPITAL RESOURCES We are continuing to finance our operations with a combination of private capital, a bank line of credit facility and leases. We maintain $7.5 million in lines of credit from M&I Bank. In December, 2001 we renewed our lines of credit with M&I Bank. The lines of credit allow for $10.0 million in working capital and $5.0 million for capital purchases. Net cash provided by operating activities totaled $4,806,000 for 2001 compared to cash used by operating activities of $2,051,000 and $2,086,000 in 2000 and 1999 respectively. Cash used in operating activities during 2000 and 1999 resulted primarily from the necessity of funding inventory and accounts receivable growth in excess of our accounts payable growth. Cash provided by operating activities during 2001 is due primarily to net income and depreciation and amortization. Net cash used in investing activities totaled $3,163,000 in 2001, $2,191,000 in 2000 and $2,343,000 in 1999. Cash used in investing activities during 2000 resulted from the acquisition of leasehold improvements and manufacturing equipment. Cash used in investing activities during 2001 resulted from the purchase of equipment and cash paid for an equity investment. Financing activities used cash of $1,386,000 in 2001 while net cash provided by financing activities totaled $4,043,000 for 2000 and $4,666,000 in 1999. Cash provided by financing activities for 2000 resulted primarily from draws on our bank line of credit. Cash used by financing activities for 2001 resulted from payments on long-term debt. -12- We believe that current cash balances, cash flows from current operations, and available term debt and lease financing will be sufficient to fund working capital and capital expenditure requirements for the 2002 year. We currently are focusing on existing operations in Wisconsin, Illinois and the development of our joint venture in Texas. Expansion plans beyond these operations are in their earliest stages. Our forecast of the period of time through which our financial resources will be adequate is a forward-looking statement that involves risks and uncertainties. Our actual funding requirements may differ materially from our forecasts as a result of a number of factors including our plans to expand our operations and the expansion of our value added and assembly operations as part of our total manufacturing solution. We cannot be certain that additional funds will be available on satisfactory terms when needed, if at all. If we are unable to raise additional necessary capital in the future, we may be required to scale down our expansion plans significantly. ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK. We do not have a material market risk associated with interest rate risk, foreign currency exchange risk, or commodity price risk. We conduct U.S. dollar denominated export transactions or immediately exchange all foreign currency attributable to export sales for U.S. dollars. Foreign sales for year 2001 were approximately 38% of total sales. -13- ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To the Stockholders Plastics Mfg. Company Germantown, Wisconsin We have audited the consolidated balance sheets of Plastics Mfg. Company and Subsidiaries as of September 30, 2001 and 2000 and the related consolidated statements of operations, stockholders' equity, and cash flows for the years then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. The financial statements of Plastics Mfg. Company and Subsidiary as of and for the year ended September 30, 1999, were audited by other auditors whose report dated October 28, 1999, expressed an unqualified opinion on those statements. We conducted our audits in accordance with auditing standards generally accepted in the United States. 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 consolidated financial statements referred to above present fairly, in all material respects, the financial position of Plastics Mfg. Company and Subsidiaries as of September 30, 2001 and 2000, and the results of its operations and cash flows for the years then ended in conformity with accounting principles generally accepted in the United States. Wipfli Ullrich Bertelson LLP November 7, 2001 Milwaukee, Wisconsin -14-

PLASTICS MFG. COMPANY AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS September 30, ~~2000~~2001 ~~1999~~and 2001 ASSETS 2001 2000 Current assets: Cash and cash equivalents $47 304,~~761~~184 $~~245~~ 47,~~813~~761 Accounts receivable: Trade - ~~less~~Less allowance for doubtful accounts of $192,805 in 2001 and $40,000 in 2000 7,880,503 5,934,223 ~~2,167,918~~ Related parties 449,966 1,611,935 ~~739,603~~ Progress receivables 182,987 31,072 ~~111,745~~ Inventories 5,152,588 3,199,728 ~~1,073,435~~ Prepaid expenses 91,820 58,417 ~~89,897~~ Total current assets 14,062,048 10,883,136 ~~4,428,411~~ Plant and equipment: Leasehold improvements 2,113,177 1,519,536 ~~549,521~~ Machinery and equipment 15,505,465 1,899,517 ~~697,406~~ Production molds 39,751 259,742 ~~100,000~~ Vehicle 37,~~655~~310 3,655 Furniture and office equipment 1,383,784 235,175 ~~20,405~~ Totals 19,049,487 3,917,625 ~~1,370,987~~ Less ~~accumulated~~- Accumulated depreciation and amortization 3,007,536 379,772 ~~134,756~~ Net depreciated value 16,041,951 3,537,853 ~~1,236,231~~ Machinery in progress 4,430,286 0 Total plant and equipment 16,041,951 7,968,139 ~~1,236,231~~ Other assets: Deposits 2,~~413~~016,~~562~~150 2,~~189~~413,~~039~~562 Deferred income taxes 1,429,900 ~~992~~Equity investment 672,~~200~~828 Total other assets 32,~~843~~688,~~462~~978 3,~~181~~843,~~239~~462 TOTAL ASSETS $2232,~~694~~792,~~737~~977 $822,~~845~~694,~~881~~737

SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -15-

PLASTICS MFG. COMPANY AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Continued) September 30, 2001 and 2001 LIABILITIES AND STOCKHOLDERS' EQUITY ~~September~~2001 30 2000 ~~1999~~ Current liabilities: Current maturities: - Obligations under capital leases $60 2,~~528~~751,081 $0 ~~Notes~~60,528 Note payable - ~~bank~~Bank 5,172,500 4,200,000 ~~425,000~~ Accounts payable: Trade 5,563,598 8,283,928 ~~1,359,174~~ Related parties 2,~~776~~553,~~856~~620 12,~~600~~776,~~087~~856 Accrued and other liabilities: Payroll, bonuses, and vacation ~~331~~1,~~380~~102,426 ~~203~~331,~~711~~405 ~~Other 25 0~~ Customer deposits 1,~~635~~143,~~138~~906 ~~441~~1,~~439 Deferred income taxes 0 24~~635,~~600~~138 Total current liabilities 1718,287,~~855~~131 417,~~054~~287,~~011~~855 Long-term liabilities: Deferred income taxes 471,000 Obligations under capital leases 4,965,566 210,554 0Total ~~Common~~long-term ~~stock~~liabilities ~~subject to rescission 0 1~~5,~~951~~436,~~360~~566 210,554 Stockholders' equity: Common stock - noNo par value: Authorized - 15,000,000 shares ~~authorized~~9, 3413,~~791,912~~189 ~~shares issued and outstanding shares in 2000; and 3,027,510 shares issued and outstanding in 1999.~~ 9,200,789 ~~6,952,040~~Accumulated ~~Stock~~deficit ~~subscriptions receivable 0~~ (~~784~~343,~~228~~909) ~~Accumulated deficit~~ (4,004,461) ~~(3,327,302)~~ Total stockholders' equity 9,069,280 5,196,328 ~~2,840,510~~ TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $2232,~~694~~792,~~737~~977 $822,~~845~~694,~~881~~737

SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -16-

PLASTICS MFG. COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS Years Ended September 30, ~~2000~~2001, ~~1999~~2000 and ~~1998~~1999 2001 2000 1999 ~~1998~~ Sales: Molding $56,125,892 $23,246,344 $ 4,561,615 $Tooling 727,~~171~~880,602 ~~Tooling~~ 8,058,721 1,217,037 ~~131,200~~ Related parties 1,120,226 2,115,051 1,686,730 ~~646,693~~ Total sales 65,126,720 33,420,116 7,465,382 ~~850,064~~ Cost of sales: Molding and tooling 41,596,162 19,919,459 4,575,334 ~~354,126~~ Related parties 9,594,571 9,953,889 3,036,764 ~~1,154,722~~ Total cost of sales 51,190,733 29,873,348 7,612,098 ~~1,508,848~~ Gross profit (loss) on sales 13,935,987 3,546,768 (146,716) ~~(658,784)~~ Operating expenses: Administrative and general expenses 37,~~014~~496,~~012~~979 ~~622~~3,~~963 78~~655,~~981~~859 ~~Related parties 641~~795,~~847~~404 ~~172,441 203,392~~ Management fee - ~~related~~Related party 784,228 373,269 ~~42,503~~ Lease procurement fee - ~~related~~Related party 0 1,817,600 0 Total operating expense 7,496,979 4,440,087 2,986,273 ~~324,876~~Income ~~Loss~~(loss) from operations 6,439,008 (893,319) (3,132,989) ~~(983,660)~~ Other income (deductions): ~~Interest~~Other income ~~116~~288,868 19,115 5,006 0 Interest expense (839,152) (265,255) (21,872) 0Equity ~~Gain~~investment ~~on sale of assets 18~~(52,~~999~~172) 0Income 0(loss) ~~Loss~~ before provision (credit) for income ~~taxes~~tax and cumulative effect of accounting change 5,836,552 (1,139,459) (3,149,855) Provision (~~983,660~~credit) ~~Credit~~ for income taxes 2,176,000 (462,300) (496,710) Income (~~402,708~~loss) ~~Net loss~~ before cumulative effect of accounting change 3,660,552 (677,159) (2,653,145) ~~(580,952)~~ Cumulative effect of accounting change, net of $68,000 deferred tax benefit 0 (95,614) 0 Net ~~loss~~income (loss) $ 3,660,552 $ (677,159) ($ (2,748,759) Per basic share: Income (loss) before accounting change $~~580~~ 0.96 $ (0.18) $ (1.01) Cumulative effect of accounting change (0.04) Net income (loss) per share $ 0.96 $ (0.18) $ (1.05) Per diluted share: Income (loss) before accounting change $ 0.85 $ (0.18) $ (1.01) Cumulative effect of accounting change (0.04) Net income (loss) per share $ 0.85 $ (0.18) (1.05) Weighted average shares in computing basic net income (loss) per share (in thousands) 3,~~952~~801 3,764 2,614 Weighted average shares in computing diluted net income (loss) per share (in thousands) 4,301 3,764 2,614

SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -17-

PLASTICS MFG. COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF ~~OPERATIONS~~STOCKHOLDERS' ~~(Continued)~~EQUITY Years Ended September 30, ~~2000~~2001, ~~1999~~2000 and ~~1998~~1999 ~~2000~~COMMON ~~1999~~STOCK ~~1998~~OUTSTANDING ~~Per~~STOCK ~~basic~~ACCUMULATED ~~share:~~SHARES ~~Loss~~AMOUNT ~~before~~SUBSCRIPTIONS ~~accounting~~DEFICIT ~~change~~Balance, (October 1, 1998 819,000 $~~0.18)~~2,845,000 ($1~~.01)~~,200,000 ($~~0.24~~ (578,543) ~~Cumulative~~Common ~~effect~~stock ofsales ~~accounting~~431,000 ~~change~~6,058,400 ~~0.00~~Stock split 2,500,000 Common stock subject to rescission (~~0.04~~722,490) ~~0.00~~(1,951,360) Management fee applied (415,772) Net loss ~~per~~(2,748,759) ~~share~~Balance, September 30, 1999 3,027,510 6,952,040 784,228 (~~$0.18~~3,327,302) ($Common stock sales, net of issue costs 41,912 297,389 Common stock released from rescission 722,490 1~~.05~~,951,360 Management fee applied (784,228) Net loss (~~$0.24~~677,159) ~~Weighted~~Balance, ~~average~~September ~~shares~~30, in2000 ~~computing~~3,791,912 ~~basic~~9,200,789 (4,004,461) Common stock issued for acquisitions net ~~loss~~of ~~per~~amounts ~~share~~held ~~(in~~by ~~thousands)~~subsidiary 17,700 212,400 Net income 3,~~764~~660,552 2Balance,~~614~~ 2September 30,~~432~~ 2001 3,809,612 $9,413,189 $ - $ (343,909)

SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -18-

PLASTICS MFG. COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF ~~STOCKHOLDERS'~~CASH ~~EQUITY~~FLOWS Years Ended September 30, ~~2000~~2001, 2000 and 1999, 2001 2000 1999 Increase (decrease) in cash and ~~1998~~cash ~~COMMON~~equivalents: ~~STOCK~~Cash ~~Number~~flows offrom ~~Stock~~operating ~~Accumulated~~activities: ~~SHARES~~Net ~~AMOUNT~~income ~~SUBSCRIPTIONS~~(loss) ~~DEFICIT~~$ ~~Balance~~3,660,552 ~~September~~$(677,159) 30$(2,748,759) ~~1997~~Cumulative ~~500~~effect of accounting change 95,~~000~~614 $1Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Provision for depreciation and amortization 2,~~250~~848,~~000~~002 $1245,~~200~~015 94,~~000~~080 $Gain 2on sale of fixed assets (291,~~409~~046) ~~Common~~Loss ~~stock~~from ~~sales~~equity ~~319~~investment 52,~~000~~172 Lease procurement fee 1,~~595~~817,~~000~~600 ~~Net~~Management ~~loss~~fees ~~(580~~applied to stock subscription 784,~~952~~228 415,772 Provision (credit) ~~Balance~~for deferred income tax 1,853,900 ~~September~~(462,300) 30(496,760) ~~1998~~Provision ~~819~~for bad debts 354,706 40,000 Changes in operating assets and liabilities: Accounts receivable (260,271) (4,678,637) (2,~~845~~877,~~000~~380) Progress receivable (106,575) 80,673 (111,745) Inventories (1,~~200~~449,~~000~~786) (~~578~~2,~~543~~126,293) ~~Common~~(1,001,233) ~~stock~~Prepaid ~~sales~~expenses ~~431~~and other assets (11,~~000~~470) 631,~~058~~480 (55,~~400~~319) 0Accounts 0payable ~~Stock~~(997,602) ~~split~~3,390,791 2,~~500~~143,~~000~~954 0Accrued 0and 0other ~~Common~~liabilities ~~stock~~581,004 ~~subject~~127,694 to196,314 ~~rescission~~Customer deposit (~~722~~1,~~490~~427,688) (1,~~951~~193,~~360)~~699 0441,439 0Net ~~Management~~cash ~~fee~~provided ~~applied~~by 0(used 0in) operating activities 4,805,898 (~~415~~2,~~772~~050,809) 0(2,086,423) ~~Net~~Cash ~~loss~~flows 0from 0investing 0activities: Deposits on leases 572,440 (2224,~~748~~523) (1,~~759~~899,189) ~~Balance~~Cash paid for equity investment (725,000) ~~September~~Proceeds 30from sale of assets 258,843 ~~1999~~Purchase of equipment (3,~~027~~269,~~510~~452) 6(1,~~952~~966,~~040~~136) ~~784~~(443,~~228~~996) Net cash used in investing activities (3,~~327~~163,~~302~~169) ~~Common~~(2,190,659) ~~stock sales~~(2,343,185) ~~net~~Cash offlows ~~issue~~from ~~costs~~financing 41activities: Payments on capital lease obligations (2,~~912~~158,806) ~~297~~(28,~~389~~973) 0Borrowings 0on ~~Common~~note ~~stock~~payable ~~released~~- Bank 772,500 3,775,000 425,000 Proceeds from ~~rescission~~issuance ~~offer~~of ~~722~~common stock 502,~~490~~944 14,~~951~~240,~~360~~800 0Cash 0paid ~~Management~~for ~~fee~~stock ~~applied~~issuance 0costs 0(205,555) Net cash provided by (~~784~~used in) financing activities (1,~~228~~386,306) 04,043,416 4,665,800 Net ~~loss~~increase 0(decrease) 0in 0cash and cash equivalents 256,423 (~~677~~198,~~159~~052) ~~Balance~~236,192 ~~September~~Cash ~~30,~~and ~~2000~~cash 3equivalents at beginning 47,~~791~~761 245,~~912~~813 $9,~~200~~621 Cash and cash equivalents at end $ 304,~~789~~184 $ 047,761 ($4 245,~~004,461)~~813

SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -19- NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principal Business Activity Plastics Mfg. Company ("PMC") is a holding company, which owns 100% of the stock of TecStar Mfg. Company ("TecStar") and, during 2001, acquired 100% of the stock of Statistical Plastics Corporation ("SPC") and PCI Consulting and Leasing, Inc. ("PCI"), collectively the companies are referred to as the "Company." TecStar was in the development stage through March 31, 1999. Manufacturing operations commenced in November 1997 with sales initially being made primarily to related companies. TecStar produces high-quality injection-molded plastic parts for various original equipment manufacturers located throughout the world. It also derives revenues from the sale of high-quality molds, the manufacture of which is currently subcontracted, primarily to affiliates. The majority of these molds are intended for parts produced at its facility in Germantown, Wisconsin. SPC provides mold sampling of new and rebuilt tooling and develops processing parameters for high volume plastic part production. PCI is now a captive leasing company of production machinery. PRINCIPLES OF CONSOLIDATION The accompanying financial statements include the accounts of the Company after elimination of significant intercompany accounts and transactions. USE OF ESTIMATES IN PREPARATION OF FINANCIAL STATEMENTS The preparation of the accompanying financial statements in conformity with generally accepted accounting principles requires management to make certain estimates and assumptions that directly affect the results of reported assets, liabilities, revenue, and expenses. Actual results may differ from these estimates. CASH EQUIVALENTS The Company considers all highly liquid debt instruments with an original maturity of three months or less to be cash equivalents. INVENTORIES Inventories are valued at the lower of cost, determined on the first- in, first-out (FIFO) method or market. -20-

~~PLASTICS~~Inventories ~~MFG.~~consist ~~COMPANY~~of ~~CONSOLIDATED~~the ~~STATEMENTS~~following: OF2001 ~~CASH FLOWS Years Ended September 30,~~ 2000, ~~1999,~~At ~~and~~current ~~1998 2000 1999 1998 Increase (decrease) in cash and cash equivalents~~cost: ~~Cash~~Perishable ~~flows~~tools ~~from operating activities: Net loss (~~$~~677,159)~~ ~~($2~~58,~~748,759)~~444 ($~~580,952)~~ ~~Cumulative effect of accounting change 0 95~~47,~~614~~551 0Raw ~~Adjustments~~materials to reconcile net loss to net cash used in operating activities: Provision for depreciation and amortization 245,015 94,080 46,676 Lease procurement fee 0 1,817,600 0 Management fees applied to stock subscription 784,228 415,772 0 Income taxes 0 0 (668) Provision for deferred income tax credit (462,300) (496,760) (402,040) Provision for bad debts 40,000 0 0 Changes in operating assets and liabilities: Accounts receivable (4,678,637) (2,~~877~~151,~~380)~~024 ~~(30,141) Progress receivable 80,673 (111,745) 0 Inventories (2,126,293) (~~1,~~001~~717,~~233)~~544 ~~(72,202) Prepaid expenses and other assets 31,480 (55,319) (34,578) Accounts payable 3,390,791 2,143,954 815,307 Accrued and other liabilities 127,694 196,314 7,397~~ Customer ~~deposit~~tooling ~~1,193,699~~work ~~441,439~~in 0process ~~Total adjustments (~~1,~~373~~335,~~650)~~577 ~~566~~272,~~722~~059 ~~329,751~~Finished ~~Net~~products ~~cash used in operating activities (2,050,809) (2,086,423) (251,201) Cash flows from investing activities: Deposits on leases (224,523) (~~1,~~899~~607,~~189)~~543 ~~(289,850) Purchase of equipment (~~1,~~966~~162,~~136)~~574 ~~(443,996)~~Totals ~~(676,991)~~$ ~~Payment of organization expense-trade 0 0 (9~~5,~~370) Payment of organization expense-related party 0 0 (64~~152,~~994)~~588 ~~Net~~$ ~~cash used in investing activities (2~~3,~~190~~199,~~659) (2,343,185) (1,041,205)~~728

PLANT, EQUIPMENT, AND DEPRECIATION Plant and equipment are valued at cost and include equipment under leases that have been capitalized. Maintenance and repair costs are charged to expense as incurred. Gains or losses on disposition of plant and equipment are reflected in income. Depreciation and amortization is computed on the straight-line and accelerated methods for financial reporting purposes, based on the estimated useful lives of the assets or the terms of the lease, whichever is required. ACCOUNTS PAYABLE The Company's banking system allows for the daily replenishment of major bank accounts for check-clearing requirements. Outstanding checks in the amount of $578,000 at September 30, 2001 have been classified as accounts payable. INCOME TAXES Deferred income taxes have been provided under the liability method. Deferred tax assets and liabilities are determined based upon the difference between the financial statement and tax basis of assets and liabilities, as measured by the enacted tax rates expected to be in effect when these differences are expected to reverse. Deferred tax expense is the result of changes in the deferred tax asset and liability. REVENUE RECOGNITION The Company recognizes revenue from molding upon shipment of the parts. Progress billings for tooling sales are recognized on the specific job orders based upon hours incurred using the applicable billing rate for shop or design work, which approximates the percentage of completion method of income recognition. NET INCOME PER SHARE Net income per basic share is calculated by dividing net income by the weighted average of common shares outstanding during the year. Net income per diluted share is calculated by using the weighted average of common shares outstanding adjusted to include the potentially dilutive effect of -21- outstanding stock options, if dilutive. The weighted average shares outstanding in computing diluted net income per share in 2000 is the same as that used in net income per basic shares as the effect of the additional shares would be antidilutive due to the net loss. No stock options were outstanding in 1999. NOTE 2 NOTE PAYABLE - BANK As of September 30, 2001, the Company has a revolving note payable agreement at one financial institution which allows for borrowings of up to $7,000,000 through February 2002. Outstanding advances bear interest at the adjusted interbank offering rate plus 2.25% (effective rate of 6.33% as of September 30, 2001). SPC has revolving note payable agreement which allows for borrowings of up to $500,000 through February 2002. Outstanding advances bear interest at the prime rate plus .5% (effective rate of 6.5% as of September 30, 2001). The note payable agreements are secured by substantially all assets of the Company. Borrowings are limited to qualified accounts receivable and inventory levels. The note payable agreements contain covenants pertaining to maintaining minimum working capital and tangible net worth levels. At September 30, 2001 and 2000, $5,172,000 and $4,200,000, respectively, were outstanding on the note payable agreements. NOTE 3 CAPITAL LEASES The Company leases various items of equipment that qualify as capital leases. The leases require monthly payments ranging from $149 to $35,080 and expire during the next five years. Substantially all of the capitalized leases contain bargain purchase options. During 2001, PCI sold to Moldmakers, Incorporated, a related party, the right of use and bargain purchase options of equipment under capital leases for cash proceeds of $258,843 and the transfer of capital lease obligations totaling $2,897,369. PCI is contingently liable for the payment of the transferred leases whose principal balance totaled approximately $2,572,000 as of September 30, 2001.

~~PLASTICS~~Machinery ~~MFG.~~and ~~COMPANY~~equipment ~~CONSOLIDATED~~includes ~~STATEMENTS~~the OFfollowing ~~CASH~~amounts ~~FLOWS~~for ~~(Continued)~~leases ~~Years~~that ~~Ended~~have ~~September~~been ~~30,~~capitalized: 2001 2000, ~~1999,~~Machinery and ~~1998~~equipment ~~2000~~$ ~~1999 1998 Cash flows from financing activities: Payments on capital lease obligation (28~~11,~~973) 0 0 Draws on note payable - bank 3~~599,~~775,000~~941 ~~425,000~~$ ~~0 Proceeds from issuance of common stock 502~~300,~~944~~055 ~~4,240,800~~Accumulated ~~80,000~~amortization ~~Cash paid for stock issuance costs~~ (~~205~~1,~~555) 0 0 Net cash provided by financing activities 4~~923,~~043,416 4,665,800 80,000 Net increase (decrease~~030) ~~in cash and cash equivalents~~ (~~198~~18,~~052~~740) ~~236,192~~Net ~~(1,212,406)~~amortized ~~Cash~~value ~~and~~$ ~~cash equivalents at beginning 245,813~~ 9,~~621 1~~676,~~222,027~~911 ~~Cash and cash equivalents at end~~ $ 47281,~~761 $245,813 $ 9,621~~315

Lease amortization is included in deprecation expense. -22-

~~Inventories~~Future ~~consist~~minimum ofpayments, by year and in the ~~following:~~aggregate, ~~2000~~under ~~1999~~the Atcapital ~~current~~leases ~~cost~~consist of the following: ~~Perishable~~CAPITAL ~~tools~~LEASES 2002 $ 473,~~551~~355,756 $2003 142,~~772~~531,167 ~~Raw~~2004 ~~materials~~ 1,~~717~~866,~~544~~097 ~~459~~2005 1,~~825~~072,648 ~~Work~~2006 in119,942 ~~process~~Thereafter ~~272~~42,~~059~~432 ~~176~~Total minimum lease payments 8,~~630~~988,042 ~~Finished~~Amount ~~products~~representing interest 1,~~162~~271,~~574~~395 ~~422~~Present value of net minimum lease payments 7,~~208~~716,647 ~~Total~~Less $3- Current maturities 2,~~199~~751,~~728~~081 Long-term obligations under capital lease $1 4,~~073~~965,~~435~~566

NOTE 4 OPERATING LEASES The Company currently leases equipment on a short-term basis from Moldmakers Leasing & Investments Limited Partnership, LLP ("Moldmakers Leasing") a related party through common control. The equipment lease payments are generally based on 105% of Moldmakers Leasing's lease cost. Monthly payments currently range from $7,350 to $8,150. In addition, the Company leases facilities from Moldmakers Leasing under a ten year triple net operating lease agreement that expires in July 2006. The lease calls for monthly payments based on 105% of Moldmakers Leasing's debt service cost related to the space occupied by the Company. The current monthly rental payment is $45,280. The Company also leases vehicles and equipment from third parties under operating lease agreements requiring monthly payments ranging from $638 to $18,636. The leases expire at various times over the next five years. Prior to PMC's acquisition of PCI (Note 16), PMC leased equipment from PCI under short-term operating lease agreements whose monthly payments were generally based on 105% of PCI's lease cost. Lease expense for the Company's operating leases totaled $2,746,052, $2,615,609, and $1,871,730 in 2001, 2000, and 1999 respectively. -23- The Company's principal stockholder has guaranteed substantially all of the Company's lease obligations.

~~2000~~Future ~~Equipment~~minimum ~~$300~~payments,~~055~~ ~~Accumulated~~by ~~amortization~~year ~~(18~~and in the aggregate,~~740)~~ ~~Net~~under ~~amortized~~the ~~value~~noncancelable operating leases with initial or remaining terms in excess of one year consisted of the following: Years Ending September 30, 2002 $~~281~~ 1,~~315~~205,242 ~~Lease~~2003 ~~amortization~~1,131,734 is2004 ~~included~~1,102,772 in2005 ~~depreciation~~950,875 ~~expense.~~2006 659,593 Total minimum lease payments $ 5,050,216

~~Future~~Lease ~~minimum~~deposits ~~payments,~~outstanding byat year-end ~~and in the aggregate, under the capital leases~~ consist of the following: ~~CAPITAL LEASES~~ 2001 ~~$87,374~~2000 ~~2002~~Facility ~~87,374~~- ~~2003~~Moldmakers ~~87,374~~Leasing ~~2004~~$ 6660,~~729~~000 ~~2005~~$ 860,~~414~~000 ~~Total~~Equipment ~~minimum lease payments 337~~56,~~265~~150 ~~Amount representing interest 66~~374,~~183~~860 ~~Present~~Future ~~value~~equipment ofleases ~~net~~- ~~minimum~~Moldmakers ~~lease~~Leasing ~~payments~~1,900,000 ~~271~~1,~~082~~900,000 ~~Less~~Other -78,702 ~~current~~Totals ~~maturities~~$ 602,~~528~~016,150 ~~Long-term obligations under capital lease~~ $~~210~~ 2,~~554~~413,562

NOTE 5 DEFINED CONTRIBUTION PENSION PLAN The Company maintains a retirement savings plan for substantially all employees which allows participants to make contributions by salary reduction pursuant to Section 401(k) of the Internal Revenue Code. Company contributions are discretionary and amounted to $90,682, $71,066, and $13,196 in 2001, 2000, and 1999, respectively. Participants vest immediately in their contributions and vest in the Company contributions over a seven-year period of service. -24-

~~Future~~NOTE ~~minimum~~6 ~~payments,~~INCOME byTAXES ~~year~~The ~~and~~provision in(credit) ~~the~~for ~~aggregate,~~income ~~consistent~~taxes consists of the following: 2001 2000 1999 Current expense (credit): Federal $ ~~583~~246,~~627~~100 ~~2002~~$ ~~583,627~~$ ~~2003~~State ~~583~~76,~~627~~000 ~~2004~~50 ~~583,627~~Total ~~2005~~current ~~509~~322,~~085~~100 ~~Thereafter~~50 Deferred tax expense (credit): 1,853,900 (462,300) (496,~~000~~760) ~~Total~~Provision ~~minimum~~(credit) ~~lease~~for ~~payments~~income taxes $3 2,~~143~~176,~~593~~000 $ (462,300) $ (496,710)

Deferred income taxes are provided for the temporary differences between the financial reporting basis and the tax basis of the Company's assets and liabilities. The major temporary differences that give rise to the deferred tax liabilities and assets are as follows:

~~Lease~~2001 ~~deposits~~2000 ~~outstanding~~Deferred attax ~~year-end~~assets: ~~consist~~Organization ofcost ~~the~~$ ~~following:~~23,000 ~~2000~~$ ~~1999~~36,200 ~~Facility~~Operating $loss 60carryforwards 1,495,400 Vacation 46,000 $13,500 60Other 21,000 ~~Equipment~~Total ~~374~~deferred tax assets 90,~~860~~000 ~~229~~1,~~039~~545,100 ~~Equipment~~Deferred ~~orders~~tax 1liabilities: Depreciation and amortization (561,~~900~~000) (103,000) 1Progress receivables (12,~~900~~200) Total deferred tax liabilities (561,000) ~~Other 78~~(115,~~702~~200) 0Net ~~Total~~deferred tax assets (liabilities) $2 (471,~~413,562~~000) $21,~~189~~429,~~039~~900

-25-

~~NOTE 6 INCOME TAXES~~ The provision (credit) for income taxes ~~consists~~varies offrom the ~~following:~~amount ~~2000~~of ~~1999~~income ~~1998~~tax ~~Current~~determined ~~credit~~by ~~(expense):~~applying ~~Federal~~the $applicable 0federal $statutory 0income $tax 0rate ~~State~~to 0pretax income (50loss) 0items ~~Benefit~~as a result of ~~NOL~~the ~~carryback~~following 0differences: 0PERCENT ~~668~~2001 ~~Total~~2000 ~~current~~1999 Statutory federal income tax rates 34.0 (5034.0) ~~668~~(34.0) ~~Deferred~~Increase ~~tax~~(decrease) ~~credit~~in rates resulting from: ~~Federal~~Nondeductible ~~375,500~~items ~~377,100~~(2.0) ~~333,398~~1.2 19.6 State ~~86,800~~income ~~119,660~~taxes ~~68,642~~- ~~Total~~Net ~~deferred~~of ~~462,300~~federal ~~496,760~~benefit ~~402,040~~5.0 ~~Total~~(5.2) ~~credit~~(2.3) ~~for~~Other ~~income~~0.3 ~~taxes~~(2.5) ~~$462,300~~0.9 ~~$496,710~~Effective ~~$402,708~~tax rates 37.3 (40.5) (15.8)

NOTE 7 STOCK OPTIONS During 2000, the Company granted stock options totaling five million shares to its president, Mark G. Sellers, or entities that he controlled. The option price was set at $10 per share with an expiration date of September 30, 2001. The fair value of the options granted was estimated on the grant date using an option-pricing model that considered the expected dividends, risk-free interest rate, and lives of the options. The option price approximated the fair value of the stock on the grant date. In accordance with Accounting Principles Board Opinion No. 25, no compensation expense was recorded by the Company. No options were issued during 2001 or 1999. The options granted during 2000 had a grant date fair value of $0. This amount was determined pursuant to a modified Black-Scholes option pricing model using assumptions of a) an option term of two years, b) a risk-free interest rate of 5.62%, c) no dividends per share, and d) no volatility. All of the options granted in 2000 expired on September 30, 2001 with no options being exercised. The Company intends to issue stock options to Mark Sellers in fiscal 2002 to replace the expired during 2001. The options are expected to be issued at the then fair value of the stock. -26-

NOTE 8 SUPPLEMENTAL CASH FLOW DISCLOSURE INFORMATION Supplemental cash flow disclosure information is as follows: 2001 2000 1999 ~~Deferred~~Cash ~~tax~~paid ~~assets~~during the year for: ~~Operating~~Interest ~~loss~~$ ~~carryforwards~~849,837 $1 265,~~495,400~~255 $ ~~989~~21,~~500~~875 ~~Organization~~Income ~~costs~~taxes 36341,~~200~~510 ~~50,200~~25 ~~Vacation~~Noncash ~~accrual~~investing ~~13,500~~and ~~5,100~~financing ~~Total~~activities: ~~deferred~~Acquisition ~~tax~~of ~~assets~~machinery 1and equipment through capital lease $ 2,~~545~~429,~~100~~045 1$ 300,~~044,800~~055 ~~Deferred~~$ ~~tax~~Common ~~liabilities~~stock issued for acquisition of businesses: ~~Depreciation~~Machinery and equipment $12,617,199 Debt assumed (~~103~~200,000) Capital lease obligations assumed (3410,~~200~~221,760) ~~Progress~~All ~~receivables~~other net liabilities assumed (121,~~200~~983,039) ~~(43~~Net total $ 212,~~000)~~400 ~~Total~~Release ~~deferred~~of ~~tax~~capital ~~liabilities~~lease ~~(115~~obligations in connection with sale of machinery $ 2,~~200~~897,369 Acquisition of machinery and equipment through accounts payable $ 331,081 $4,710,732 Transfer of stock subject to rescission to (from) stockholders' deficit $1,951,360 (77$1,~~200~~951,360) ~~Net~~Management ~~deferred~~fee ~~tax~~applied ~~assets~~to stock subscriptions $1 784,~~429,900~~228 $ ~~967~~415,~~600~~772

NOTE 9 ACQUISITIONS The Company acquired 100% of the outstanding common stock of PCI on March 31, 2001 and SPC on December 31, 2000 in exchange for PMC common stock consideration of 16,800 and 900 shares (net of 705,000 shares of PMC stock owned by SPC), respectively. The total purchase price paid by PMC for PCI and SPC totaled $212,400, using the Company's common stock's estimated fair value of $12 per share. The acquisitions were accounted for using the purchase method of accounting. -27-

~~2000~~The ~~1999~~following ~~1998~~table ~~Statutory~~presents ~~federal~~the ~~income~~unaudited ~~tax~~proforma ~~rates~~condensed ~~(34.0)%~~results ~~(34.0)%~~of ~~(34.0)%~~operations ~~Increase~~for ~~(decrease)~~the inyear ~~rates~~ended ~~resulting~~September ~~from:~~30, ~~Nondeductible~~2001 ~~items~~and ~~1.2~~2000 ~~19.6~~as 0if the acquisitions of PCI and SPC were completed at the beginning of each period presented.0 ~~State~~UNAUDITED ~~income~~UNAUDITED ~~taxes~~PROFORMA -PROFORMA ~~less~~2001 ~~federal~~2000 ~~benefit~~Net sales $66,318,349 $37,184,912 Operating profit (~~5.2~~loss) 6,974,137 (~~2.3~~34,355) Net earnings (~~7.0~~loss) ~~Other~~3,635,516 (~~2.5~~433,931) ~~0.9~~Earnings ~~0.1~~(loss) ~~Effective~~per ~~tax~~share: ~~rates~~Basic ~~(40~~$0.~~5)%~~95 (15$1.826)% Diluted $0.84 (40$1.926)%

NOTE 10 RELATED PARTY TRANSACTIONS During the periods presented, the Company transacted business with certain other companies, related by common control. These companies are collectively referred to as the MGS Group. The activity consisted primarily of buying and selling services between the parties, whose services complement one another. Also included is the purchase of services from one company that performs human resources, marketing, finance, and other administrative duties for all of the related companies. Mark G. Sellers, who beneficially owns approximately 60% of the Company's issued and outstanding common stock, also controls a majority of the equity interests of each of the companies. Scott W. Scampini, Executive Vice President of the Company, owns between 10.5% and 25% of the equity interests of these related companies. -28-

~~WEIGHTED~~These ~~AVERAGE~~transactions ~~EXERCISE~~are ~~FIXED~~summarized ~~OPTIONS~~as follows: ~~SHARES~~MOLDMAKERS, ~~PRICE~~MOLDMAKERS ~~Options~~1999 ~~outstanding~~INCORPORATED* atLEASING ~~September~~SPC ~~30,~~PCI ~~1999~~Outsourcing 0allocation charges** $862,872 0$139,050 ~~Granted~~Machine ~~during~~time ~~2000~~sales 5$1,~~000~~304,~~000~~030 10Facility ~~Options~~lease ~~outstanding~~expense at$305,500 ~~September~~Equipment ~~30,~~lease ~~2000~~expense 5$116,~~000,000~~430 $~~10 Options exercisable at September 30~~1, ~~2000 5~~449,~~000,000~~800 ~~Weighted~~Tooling ~~average~~purchases ~~fair-value~~$664,133 ofMold ~~options~~sampling ~~granted~~charges ~~during~~$50,958 ~~the~~Lease ~~year~~procurement $fee 0$1,817,600

~~NOTE~~MOLDMAKERS, 8MOLDMAKERS ~~SUPPLEMENTAL CASH FLOW DISCLOSURE INFORMATION~~ 2000 ~~1999~~INCORPORATED* ~~1998~~LEASING ~~Cash~~SPC ~~paid~~PCI ~~during~~Outsourcing ~~the~~allocation ~~year~~charges*** ~~for: Interest~~ $~~265~~2,~~255~~618,418 $21170,~~875~~584 $Machine 0time ~~Income~~sales ~~taxes~~ $2,271,882 0Facility $lease 25expense $193,520 0Equipment ~~Non-cash investing and financing activities: Acquisition of machinery and equipment through capital~~ lease expense $~~300~~103,~~055~~040 $~~0 $0 Acquisition of machinery and equipment through increase in accounts payable $4~~2,~~710~~078,~~732~~025 $0Tooling $0purchases ~~Transfer of stock subject to recision to (from) Stockholder's deficit~~ $13,~~951~~809,~~360~~091 ($119,~~951,360)~~290 $0Mold ~~Management~~sampling ~~fee~~charges ~~applied to stock subscriptions~~ $~~784~~272,~~228 $415,772 $0~~427

~~NOTE 9 RELATED PARTY TRANSACTIONS (Continued) ADMINISTRATIVE~~MOLDMAKERS, ~~DESIGN,~~MOLDMAKERS ~~AND~~2001 ~~COMPUTER~~INCORPORATED* ~~SERVICES~~LEASING ~~2000~~SPC** ~~1999~~PCI** ~~1998~~Outsourcing ~~MGS~~allocation ~~Enterprises~~charges*** $~~529~~1,~~898 $156~~496,~~961~~006 $4136,~~618~~224 ~~Cadd~~Machine ~~Plus~~time ~~56,055~~sales 6$147,~~800~~763 ~~445~~Facility Olease &expense ~~S Design~~$630,892 ~~Inc.~~Equipment ~~218,323~~lease ~~84,985~~expense ~~15,769 Total~~ $~~804~~118,~~276~~210 $~~248~~1,~~746 $57~~477,~~832~~500 ~~MACHINE~~Consulting ~~TIME~~fees ~~SALES~~paid ~~2000~~$100,000 ~~1999~~Tooling ~~1998~~purchases ~~Statistical Plastics Corporation~~ $26,~~271~~279,~~882~~965 ~~$1,304,030~~Mold sampling charges $~~646~~127,~~693~~340 ~~LEASING~~*As ~~ACTIVITY~~the ~~2000~~result ~~1999~~of ~~1998~~mergers ~~Moldmakers~~in ~~Leasing:~~2001 ~~Equipment~~and ~~lease $103~~2000,~~040~~ ~~$116~~Moldmakers,~~430~~ ~~$122,857~~Incorporated ~~Facility~~(f/k/a ~~lease~~MGS ~~193,520~~Manufacturing ~~305~~Group,~~500~~ ~~174,663~~Inc.) ~~Lease~~includes ~~procurement~~transactions 0with ~~1,817,600~~all 0of ~~PCI~~the ~~Consulting~~following companies: ~~Equipment~~MGS ~~lease 2~~Enterprises,~~078,025~~ ~~1,449,800~~Cadd ~~480~~Plus,~~618~~ ~~Total~~O&S $2Design,~~374,585~~ ~~$3,689,330~~Moldmakers ~~$778,138~~Die ~~QUALITY~~Cast ~~OPERATIONS~~Tooling ~~AND CONSULTING 2000 1999 1998 Statistical Plastic Corporation $170~~Division,~~584~~ ~~$139~~Moldmakers,~~050~~ ~~$397,272~~Prototype ~~MGS~~Mold ~~Enterprises~~and 96Design,~~495~~ ~~20,300~~and ~~455 Total $267~~Redline,~~079~~ ~~$159,350~~Inc. ~~$397,727~~**Amounts ~~TOOLING~~include ~~PURCHASE~~all ~~2000~~activity ~~1999~~prior ~~1998~~to ~~Moldmakers,~~acquisition ~~Inc.~~of ~~$3,817,966~~SPC ~~$590,133~~and ~~$69,091~~PCI ~~Moldmakers~~by ~~Die~~PMC ~~Cast~~in ~~Tooling Div~~2001. ~~23,150~~***Amounts 0include 0charges ~~Prototype~~for ~~Mold~~services ~~and~~rendered ~~Design~~for ~~(54~~administrative,~~875)~~ 74design,~~000~~ ~~33,950~~computer ~~O & S Design~~services, ~~Inc.~~quality 22operations,~~850~~ 0quality ~~0 Statistic Plastics Corporation 19~~consulting,~~290~~ 0project ~~0 Total $3~~management,~~828,381~~ ~~$664~~maintenance,~~133~~ ~~$103,041~~and shipping.

The Company also reimburses Moldmakers, Incorporated for certain shared expenses, such as insurance costs, utilities, shop supplies, and other shared costs. These costs totaled approximately $2,401,070, and $2,181,000 in 2001 and 2000, respectively. -29- The Company had entered into management agreements with its three initial stock subscribers under which it would pay them an aggregate management fee equal to 5% of gross sales through December 31, 2001. The Company agreed with those related companies to offset payment of the management fees due them against the stock subscriptions. The amount offset totaled $415,772 in 1999 and $784,228 in 2000. In addition to providing management services, each of the three companies solicits sales on behalf of the Company. On October 1, 1999, the Company agreed to extend the agreements to December 31, 2006. On May 1, 2000, the Company terminated the management agreements and all modifications to them. Some of the Company's other stockholders also have ownership interests and management functions in the above related entities. The existence of common control could result in operating results or financial position of the Company being significantly different from those that would have been obtained had such control not existed, although there is no indication that such control has had an adverse affect on the Company. NOTE 11 CONTINGENCIES In the ordinary course of conducting business, the Company occasionally becomes involved in legal proceedings relating to contracts, environmental issues, or other matters. While any proceeding or litigation has an element of uncertainty, management of the Company believes that the outcome of any pending or threatened actions will not have a material adverse effect on the business or financial condition of the Company. During 2001, the Company settled a lawsuit filed against it in February 1999 in the District Court of Tarrant County, Texas, with respect to a lease entered into by the Company in November 1998. As part of the settlement, the Company paid rent in the sum of $250,000 and forfeited a lease deposit of $25,000. NOTE 12 LEASE PROCUREMENT FEE During 1999, the Company recorded a charge of $1,817,600 for expenses related to leases procured by a related company on the Company's behalf. This related company purchased common stock from the Company during 1999. The charge represents the difference between the approximate fair market value of the stock and the price paid by the related company. No similar expense was incurred during 2001 or 2000. NOTE 13 MAJOR CUSTOMERS The Company's customers operate in a number of different industries. As of September 30, 2001, 2000, and 1999, sales to up to nine separate divisions of one customer in each year were approximately $28,647,000, $11,595,000, and $2,018,000, respectively. -30-

~~NOTE~~Sales 9by ~~RELATED~~geographical ~~PARTY~~location ~~TRANSACTIONS~~of ~~(Continued)~~customers ~~PROJECT~~were ~~MANAGEMENT~~approximately ~~2000~~as ~~1999~~follows: ~~1998~~2001 O2000 &1999 SUnited ~~Design~~States $ 939,~~116~~877,000 $ ~~188 $ 0 Moldmakers~~27, ~~Inc. 366~~545,~~794~~000 ~~198,672~~$ ~~0 Moldmakers Die Casting Division 25~~4,~~841 19~~495,~~418~~000 0Brazil ~~Prototype Mold and Design 129~~3,~~248 163~~492,~~167~~000 ~~0 Total $530~~1,~~999 $381~~325,~~445~~000 $China ~~0 MAINTENANCE~~698,000 ~~SHIPPING~~925,000 ~~QUALITY 2000 1999 1998 MGS Enterprises $ 0 $ (~~1,~~144) $ 0 ProFab 0 (113) 0 Moldmakers~~370,000 ~~Inc.~~United ~~582,142~~Kingdom ~~128~~9,~~963 10~~080,~~514~~000 ~~Moldmakers Die Casting Tooling Div. 70~~3,~~995 23~~075,~~725~~000 ~~278 Prototype Mold and Design 523~~1,~~088 57~~190,~~732~~000 ~~3,950~~Germany ~~Redline~~9, ~~Inc. 10~~073,~~423~~000 ~~3,218~~Other 0countries ~~Total $1~~2,~~186~~528,~~648~~000 ~~$ 212~~550,~~381~~000 ~~$14~~410,~~742~~000 ~~MOLD~~Totals ~~SAMPLING 2000 1999 1998 Statistical Plastics Corporation~~ $ ~~272~~64,~~427~~748,000 $ 5033,~~958~~420,000 $10 7,~~270~~465,000

The Company presently does not require collateral from its customers. To reduce credit risk, the Company performs ongoing evaluations of its customers' financial condition. As of September 30, 2001 and 2000, major customers owed approximately 34% and 29%, respectively, of the Company's accounts receivable. NOTE 14 CUMULATIVE EFFECT OF ACCOUNTING CHANGE In accordance with Statement of Position 98-5 issued by the Accounting Standards Executive Committee, the Company has chosen to charge all start- up costs to operations as of October 1, 1998. As a result, organization costs amounting to $95,614 (after taxes of $68,000) remaining unamortized as of that date were written off. Prior to this change, organization costs were amortized over five years. NOTE 15 STOCK SUBJECT TO RESCISSION The Company sold 722,490 shares of common stock from August 1999 to September 1999 that may not have qualified for exemption from registration under federal and state securities law. A rescission offer was made to repurchase these shares for a 30-day period in fiscal 2000. The Company had a written agreement with its president and affiliated organizations to purchase shares tendered in the rescission offer. The amounts received for shares subject to the rescission offer totaling $1,951,360 were classified outside of permanent equity in the balance sheet as of September 30, 1999. The rescission period ended on April 14, 2000. None of the shares subject to rescission were tendered during the offer. Consequently, the Company reclassified the amounts received for those shares into permanent equity. NOTE 16 CAPITAL STOCK ACTIVITY Three related parties subscribed to the initial 500,000 shares of stock issued. The subscription agreements provide for the payment of $.10 per share upon issuance of the stock with the remaining $2.40 per share payable on December 31, 2001. The subscriptions were paid in full as of September 30, 2000 by applying management fees earned (Note 9) during 2000 and 1999. -31- On September 30, 1999, the Company declared a three-for-one stock split effected in the form of a dividend of two shares per share then outstanding. The record date was September 30, 1999. Effective September 2000, the Company created a nonqualified restricted stock plan. The Company has set aside 200,000 shares of stock to be used by the Plan. Restricted stock awards can be granted to employees at the discretion of the Company. To date no awards have been made. NOTE 17 EQUITY INVESTMENT In September 2001, the Company formed a joint venture with Mikron Infocom Technology Corp Texas and Mikron Delaware Corporation (Mikron). The venture was organized as a jointly owned and controlled limited partnership named Mikron TecStar LP. Mikron and the Company each have a 50% ownership interest and share all decision making and management responsibilities. The Company received its 50% ownership interest in exchange for a cash contribution of $725,000. The Company's investment in Mikron TecStar LP is currently held in a wholly owned subsidiary of TecStar, which has no other activity. The following is a summary of financial position and results of operations of Mikron TecStar LP as of September 30, 2001 and for the one month period then ended:

~~2000~~Total ~~1999~~assets ~~1998~~$4,984,065 ~~United~~Total ~~States~~liabilities ~~$27~~3,~~545~~638,~~000~~409 Total members' equity $41,~~495~~345,~~000~~656 Sales $~~850,000~~ ~~Brazil 1~~2,~~325,000~~437 0Net 0loss ~~China~~($ ~~925~~104,~~000~~344) ~~1,370,000~~Percent 0owned ~~United~~as ~~Kingdom~~of ~~3,075,000~~September 130,~~190,000~~ 2001 50.0% ~~Other~~Equity ~~countries~~in ~~550,000~~net ~~410,000~~assets 0- ~~Total~~September ~~$33~~30,~~420,000~~ 2001 $7672,~~465~~828 Carrying value of investment - September,~~000~~ 2001 $~~850~~672,~~000~~828

NOTE 18 ADVERTISING COSTS The Company expenses advertising costs as incurred (or the first time the advertising takes place). Total advertising costs charged to expense for 2001, 2000, and 1999 were $37,972, $83,913, and $6,037, respectively. -32- NOTE 19 FUTURE ACCOUNTING CHANGES In June 2001, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 142, "Goodwill and Other Intangible Assets." SFAS No. 142 supersedes APB Opinion No. 17, "Intangible Assets." SFAS No. 142 addresses how intangible assets should be accounted for after they have been initially recognized. SFAS No. 142 eliminates the amortization for intangible assets, with indefinite lives, such as trade names and goodwill. Intangible assets with indefinite useful lives shall be tested for impairment annually, or more frequently if events or changes in circumstances indicate that the asset may be impaired. SFAS No. 142 is effective for fiscal years beginning after December 15, 2001. The Company's adoption of SFAS 142 on October 1, 2002 is not anticipated to have a material impact on the consolidated financial statements as of the date of adoption. In June 2001, FASB issued SFAS No. 143, "Accounting for Asset Retirement Obligations" and in August 2001, issued SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets." The impact of adopting either of these statements is not anticipated to have a material impact on the consolidated financial statements. -33- ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES. None. -34- PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT. DIRECTORS Our directors are elected annually. The following information is provided with respect to directors:

PRINCIPAL OCCUPATION AND OTHER NAME AND AGE DIRECTORSHIPS DIRECTOR SINCE Mark G. Sellers, 4647 Chairman of the Board, CEO 1996 and Treasurer of the Company and TecStar and president, director and/or partner inof ~~each~~Moldmakers, ~~other~~Incorporated ~~entity~~and inits ~~MGS~~affiliates ~~Group; Mr. Sellers founded the MGS Group of companies in 1982~~ Scott W. Scampini, 4849 Executive Vice President and Secretary of the 1996 Company and TecStar; also an officer, director and/or partner of ~~each~~Moldmakers, ~~other~~Incorporated ~~entity~~and inits ~~the MGS Group~~affiliates; Mr. Scampini was in public accounting prior to joining the MGS Group in 1993 at BDO Siedman, LLP (1984-1993) and Price Waterhouse (1977-1982) Jeffrey A. Kolbow, 3233 Vice President - Finance of MGS Enterprises, 1999 Inc., and an officer and/or director of ~~each~~Moldmakers, ~~other~~Incorporated ~~entity~~and inits ~~the MGS Group~~affiliates; Mr. Kolbow has served ~~the~~these ~~MGS Group of~~ companies in various capacities since 1995; previously, BDO Siedman, LLP (1990-1995) Bruce L. Schneider, 4849 Vice President - Finance of the Company and 1999 TecStar since July, 1999, and also an officer and/or director of ~~each~~Moldmakers, ~~other~~Incorporated ~~entity~~and inits ~~the MGS Group~~affiliates; previously, controller, Sterling Tool Mfg. Co. (1994-1996) -3835- Rade (Rudi) Petrovic, 5253 Vice President - Sales of the Company and 1996 TecStar; previously employed by Regina U.S.A., a division of Regina Industria, an Italian manufacturer of conveyor chains (1989-1995); Mr. Petrovic has been employed by ~~the~~Moldmakers, ~~MGS~~Incorporated ~~Group~~or its affiliates since 1995

EXECUTIVE OFFICERS Executive officers are elected annually. NAME AND AGE OFFICE Mark G. Sellers, 47 * Scott W. Scampini, 49 * Bruce L. Schneider, 49 * Rade R. Petrovic, 51 * Craig R. Hall, 53 President since August, 2000; Chief Operating Officer of TecStar since November, 1999; previously, Vice President of Technology, Tulip Corporation (January, 1998 - November, 1999); Manager of Molding, Mattel Power Wheels (February, 1995 - January, 1998) John R. Burt, 41 Director of Engineering and Sales since October, 1999; previously, Sales and Marketing Director, Oberg Industries (1998-1999); Business Unit Manager, Intesys Technologies (1990-1998) * See "Directors." -36- ITEM 11. EXECUTIVE COMPENSATION. COMPENSATION OF DIRECTORS Our directors are not compensated for their services as directors. EXECUTIVE COMPENSATION The table below sets forth the compensation earned by, or awarded or paid by us, to our CEO and to each of our three other most highly compensated executive officers whose salary and bonus exceeded $100,000 for the last fiscal year.

~~EMPLOYEES~~SUMMARY ~~NAME~~COMPENSATION ~~AND~~TABLE ~~AGE~~Annual ~~OFFICE~~Compensation Long Term Compensation Awards Securities Restricted Underlying Name and Principal Other Annual Stock Options/ All Other Position Year Salary Bonus Compensation($) Awards(1) SARs(#) Compensation Mark G. Sellers,; 46CEO ~~Scott~~of W.2001 ~~Scampini,~~(2) 48(2) ~~Bruce~~(2) L.0 ~~Schneider,~~0 49(2) ~~Rade~~the R.Company ~~Petrovic~~2000 (2) (2) (2) 0 5,000,000 50(2) 1999 (2) (2) (2) 0 0 (2) Craig R. Hall,; 52 President ~~since~~2001 ~~August~~$111,000 ~~2000;~~$24,000 ~~Chief~~$0 ~~Operating~~0 ~~Officer~~0 of$ ~~TecStar~~0 ~~since~~2000 ~~November~~$108,700 ~~1999;~~$ ~~previously,~~0 ~~Vice~~$0 ~~President~~0 of0 ~~Technology,~~$ ~~Tulip~~0 ~~Corporation~~John ~~(January,~~R. ~~1998~~Burt; -2001 ~~November~~$147,400 ~~1999);~~$ ~~Manager~~0 of$0 ~~Molding~~0 0 $ 3,150(3) ~~Mattel~~Director ~~Power~~- ~~Wheels~~Engineering ~~(February~~2000 $127,465 ~~1995~~$ -0 ~~January~~$0 0 0 $ 1,615 ~~1998).~~and ~~John~~Sales Rade R. ~~Burt~~Petrovic; Vice 2001 $111,000 40$ ~~Director~~3,000 of$0 ~~Engineering~~0 ~~and~~0 $ 1,640(3) President - Sales ~~since~~2000 ~~October~~$105,800 $ 0 $0 0 0 $ 1,560 1999; ~~previously~~$105,800 ~~Sales~~$ ~~and~~0 ~~Marketing~~$0 ~~Director,~~0 ~~Oberg~~0 ~~Industries~~$ 1,560 {(~~1998-1999~~1);}We ~~Business~~adopted ~~Unit~~the ~~Manager,~~Restricted ~~Intesys~~Stock ~~Technologies~~Plan ~~(1990~~during fiscal year 2000. No grants had been made under the plan at fiscal year-~~1998~~end. {(2)}Mr. Sellers did not receive any salary, bonus, or other compensation from us. See ~~"Directors~~Item 13, Certain Relationships and Related Transactions." {(3)}Amounts contributed to 401(k) plan.

OPTION EXERCISES AND HOLDINGS No options were granted in 2001 to executive officers named in the summary compensation table. We anticipate that we will grant options to acquire 5,000,000 shares of our stock to Mr. Sellers and certain of his affiliates to replace the options that expired on September 30, 2001. No options were exercised by any executive officer named in the summary compensation table during our last fiscal year and no options were outstanding on September 30, 2001. -37- ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT. The following table sets forth information with respect to beneficial ownership of our common stock as of December 15, 2001, by each director; each holder of more than 5% of our common stock; each of the officers listed in the Summary Compensation Table; and all current directors and executive officers as a group. Except as indicated in the footnotes to this table, the individuals named in this table have sole voting and investment power with respect to all shares of common stock shown as beneficially owned by them.

~~SUMMARY~~Number ~~COMPENSATION~~of ~~TABLE~~Shares ~~Long~~Percentage ~~Term~~NAME ~~Compensation~~BENEFICIALLY ~~Awards~~OWNED ~~Securities~~OF ~~Restricted~~CLASS ~~Underlying~~Moldmakers, ~~Name~~Incorporated* ~~and~~1,015,950 ~~Principal~~26.67% ~~Other~~Moldmakers ~~Annual~~Leasing ~~Stock~~& ~~Options/~~Investments* ~~All~~680,460 ~~Other~~17.86% ~~Position~~Mark ~~Year~~G. ~~Salary~~Sellers ~~Bonus~~1,900,845 ~~Compensation~~{(~~$) Awards(~~1)} ~~SARs(#)~~49.89% ~~Compensation~~Scott ~~Mark G~~W. ~~Sellers;~~Scampini ~~CEO~~162,938 of4.27% ~~2000~~Jeffrey ~~(2)~~A. ~~(2)~~Kolbow ~~(2) 0 5~~9,000~~,000~~ ~~(2)~~** ~~the~~Rade ~~Company~~R. ~~1999~~Petrovic ~~(2)~~60,720 ~~(2)~~1.59% ~~(2)~~Bruce 0L. 0Schneider ~~(2)~~30,600 ** Craig R. Hall; ~~President 2000 $106,900 $~~0 $0- ~~0 0 $1,800(3)~~ John R. Burt; ~~2000 $127~~9,~~465~~130 $0** $0All 0directors 0and ~~$1,615(3)~~officers ~~Director~~as -a ~~Engineering~~group ~~and~~(7) ~~Sales~~2,173,233 ~~Rade R~~57.05% ~~Petrovic;~~*Mailing ~~Vice~~address: ~~2000~~W188 ~~$104,000~~N11707 $0Maple $0Road, ~~0 0 $1~~Germantown,~~800(3)~~ ~~President~~WI 53022-8214 ~~Sales~~**Less ~~1999~~than ~~$105,800 $0 $0 0 0 $~~1~~,560(3)~~% {(1)}Includes We1,696,410 ~~adopted~~shares ~~the~~beneficially ~~Restricted~~owned ~~Stock~~by ~~Plan~~Moldmakers, ~~during~~Incorporated ~~fiscal~~and ~~year~~Moldmakers ~~2000~~Leasing over which Mr. NoSellers ~~grants~~exercises ~~had~~management ~~been~~and ~~made~~voting ~~under~~control ~~the~~as ~~plan~~principal atexecutive ~~fiscal~~officer ~~year-end.~~and ~~{(2)}~~in which Mr. Sellers ~~did~~directly ~~not receive any salary, bonus,~~ or ~~other~~indirectly ~~compensation~~holds ~~from~~a usmajority inof ~~2000~~the orequity ~~in 1999~~interests. See ~~Item~~"Option ~~13,~~Exercises ~~Certain Relationships~~ and ~~Related~~Holdings" ~~Transactions.~~under ~~{(3)}~~Item ~~Amounts contributed to 401(k) plan~~11.

-38- ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS. RELATED PARTY TRANSACTIONS We have entered into various transactions with Moldmakers, Incorporated (including Moldmakers Leasing) to provide management and administrative services, equipment, and facilities. We expect that additional transactions of a similar nature will be entered into in the future. None of these agreements is the result of independent, arms- length negotiations and no independent third party has reviewed or approved any of these arrangements. We believe that the services, equipment and/or real estate transactions which have been or which will be entered into with Moldmakers, Incorporated are, or will be, on terms no less favorable than comparable transactions entered into with independent parties. The types of transactions we have entered into with Moldmakers, Incorporated, and the aggregate dollar amounts attributable to transactions with each company which: o aggregated more than $60,000; or o aggregated more than 5% of our consolidated gross revenues or 5% of Moldmakers, Incorporated consolidated gross revenues; or o represented an indebtedness at the end of our 2001 fiscal year in excess of 5% of our total consolidated assets; are set forth below. RELATED PARTY PURCHASES o We subcontract with Moldmakers, Incorporated companies for moldmaking, engineering, maintenance, sampling, and other services related to our production orders from customers. The aggregate amount of these contracts and services in 2001 was $7,775,971. o Leases between us and Moldmakers Leasing under which we lease our Germantown, Wisconsin facility. Rent payments to Moldmakers Leasing in fiscal 2001 under these leases were $630,892. o Subleases for a majority of our production equipment with Moldmakers Leasing and PCI Consulting and Leasing, Inc. Rent payments in fiscal 2001 under these leases to Moldmakers Leasing were $118,210. We acquired PCI Consulting and Leasing, Inc. on March 31, 2001. We provided 35% of Moldmakers Leasing's revenue in fiscal 2001. o Agreements between us and Moldmakers, Incorporated for accounting, sales and marketing services, and human resources services. During fiscal 2001, we paid Moldmakers, Incorporated -39- $558,066 for accounting, human resource, and other administrative services, and $13,500 for sales and marketing services. o Agreements between us and Moldmakers, Incorporated for management information systems and related computer support services. During fiscal 2001, we paid $83,325 for these services; RELATED PARTY SALES o Agreements with other Moldmakers, Incorporated companies under which we were compensated based upon hourly rates. These contracts resulted in payments of $433,338. -40- PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K. (a) Documents filed as part of this report. (1) The following financial statements are filed as part of this report: (i) Consolidated Balance Sheets as of September 30, 2001 and 2000 (ii) Consolidated Statements of Operations for the years ended September 30, 2001, 2000, and 1999 (iii)Consolidated Statements of Cash Flows for the years ended September 30, 2001, 2000, and 1999 (iv) Consolidated Statements of Stockholders' Equity for the years ended September 30, 2001, 2000, and 1999 (v) Notes to Consolidated Financial Statements (2) Financial Statement Schedules Schedules prescribed by Regulation S-X are not submitted because they are not applicable or not required, or because the required information is included in the Consolidated Financial Statements and Notes thereto. -41- (3) Exhibits Exhibits required by Item 601 of Regulation S-K: EXHIBIT NUMBER EXHIBIT DESCRIPTION 3.1 Registrant's Restated Articles of Incorporation, incorporated by reference to Exhibit 3.1 to Form S-1 (Registration No. 333-92019) 3.2 Registrant's By-laws, as amended November 29, 1999, incorporated by reference to Exhibit 3.2 to Form S-1 (Registration No. 333-92019) 4.1 $7,000,000 Loan Agreement between M&I Northern Bank and the Company, as last amended November 7, 2000, incorporated by reference to Exhibit 4.2 to Annual Report on Form 10-K for the year ended September 30, 2000 (Commission File No. 333-92019) 4.2 $500,000 Loan Agreement between M&I Northern Bank and Statistical Plastics Corporation dated May 1, 2001, incorporated by reference to Exhibit 4.2 to Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2001 (Commission File No. 333-92019) 10.01 Mark G. Sellers Stock Option Agreement, incorporated by reference to Exhibit 10.01 to Form S-1 (Registration No. 333-92019) 10.02 MGS Childrens' Trust Stock Option Agreement, incorporated by reference to Exhibit 10.02 to Form S-1 (Registration No. 333-92019) 10.03 Moose Lake Trust Stock Option Agreement, incorporated by reference to Exhibit 10.03 to Form S-1 (Registration No. 333-92019) 10.04 Moldmakers Leasing & Investments Limited Partnership, LLP Stock Option Agreement, incorporated by reference to Exhibit 10.04 to Form S-1 (Registration No. 333-92019) 10.05 Moldmakers, Inc. Stock Option Agreement, incorporated by reference to Exhibit 10.05 to Form S-1 (Registration No. 333-92019) 10.06 Management Agreement Between Registrant and MGS Enterprises, Inc. dated December 31, 1996, as amended and terminated May 1, 2000, incorporated by reference to Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2000 (Commission File No. 333-92019) 10.07 Management Agreement Between Registrant and Moldmakers Management, Inc. dated December 31, 1996, as amended and terminated May 1, 2000, incorporated by reference to Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2000 (Commission File No. 333-92019) 10.08 Management Agreement Between Registrant and Statistical Plastics Corporation dated December 31, 1996, as amended and terminated May 1, 2000, incorporated by reference to Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2000 (Commission File No. 333-92019) 10.09 Master Equipment Lease between Registrant and Moldmakers Leasing & Investments Limited Partnership, LLP, incorporated by reference to Exhibit 10.09 to Form S-1 (Registration No. 333-92019) -42- 10.10 Master Equipment Lease between Registrant and PCI Consulting and Leasing, Inc., incorporated by reference to Exhibit 10.10 to Form S-1 (Registration No. 333-92019) 10.11 ITW Paslode, Cordless Tool Group Supply Agreement, incorporated by reference to Exhibit 10.11 to Form S-1 (Registration No. 333-92019) 10.12 Lease on Germantown, Wisconsin, Facility, incorporated by reference to Exhibit 10.13 to Form S-1 (Registration No. 333-92019) 10.13 Plastics Mfg. Company Restricted Stock Plan, incorporated by reference to Form S-8 (Registration No. 333-45830) 10.14 Equipment Lease dated April 25, 2001 between M&I National Leasing Corp. and the Company, incorporated by reference to Exhibit 10.14 to Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2001 (Commission File No. 333-92019) 21.1 Subsidiaries of the Registrant 23.1 Consent of Wipfli Ullrich Bertelson LLP (B) REPORTS ON FORM 8-K: None -43- 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. PLASTICS MFG. COMPANY December 27, 2001 By: SCOTT W. SCAMPINI Scott W. Scampini Executive Vice President Pursuant to the requirement of the Securities Exchange Act of 1934, this report has been signed below on December 27, 2001 by the following persons on behalf of the registrant and in the capacities indicated. SIGNATURE TITLE MARK G. SELLERS President and Chief Executive Officer Mark G. Sellers and a director (Principal Executive Officer) SCOTT W. SCAMPINI Executive Vice President and Director Scott W. Scampini BRUCE L. SCHNEIDER Vice President - Finance and Director Bruce L. Schneider (Principal Financial and Accounting Officer) JEFFREY A. KOLBOW Director Jeffrey A. Kolbow RADE PETROVIC Director Rade Petrovic -44- SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED PURSUANT TO SECTION 15(D) OF THE ACT BY REGISTRANTS WHICH HAVE NOT REGISTERED SECURITIES PURSUANT TO SECTION 12 OF THE ACT No annual report covering the Registrant's last fiscal year has been sent to security holders of the Registrant. No proxy statement, form of proxy or other proxy soliciting material was sent to more than ten of the Registrant's security holders with respect to the annual meeting of shareholders held during the registrant's last fiscal year. The Registrant does not contemplate furnishing an annual report (other than a copy of the audited financial statements which comprise Item 8 of the Registrant's annual report on Form 10-K for the year ended September 30, 2001) to its shareholders or proxy solicitation materials to more than ten persons in connection with any annual or other meeting of shareholders. -45- EXHIBIT INDEX* TO FORM 10-K OF PLASTICS MFG. COMPANY FOR THE YEAR ENDED SEPTEMBER 30, 2001 Pursuant to Section 102(d) of Regulation S-T (17 C.F.R. Section 232.102(d)) EXHIBIT 21.1 SUBSIDIARIES OF THE REGISTRANT EXHIBIT 23.1 CONSENT OF WIPFLI ULLRICH BERTELSON LLP *Exhibits required by Item 601 of Regulation S-K which have previously been filed and are incorporated herein by reference are set forth in Part IV, Item 14(a) of Form 10-K to which this Exhibit Index relates. -46-

OPTION/SAR GRANTS IN LAST FISCAL YEAR {(1)} Potential Realizable Number of % of total Value at Assumed Annual Securities Options/SARs Rates of Stock Price Underlying Granted to Exercise or Appreciation for Options/SARs Employees In Base Price Expiration Option Term Name Granted(#) Fiscal Year ($/Sh) Date 5%(2) 10%($) Mark G. Sellers 5,000,000{(1)} 100% $10.00 9/30/01 $0{(2)} $0{(2)} {(1)} The options indicated in the table were granted on October 1, 1999 to Mr. Sellers (1,750,000 shares), two trusts for which he serves as trustee (1,250,000 shares), and two of the MGS Group companies, Moldmakers Investments (1,000,000 shares) and Moldmakers, Inc. (1,000,000 shares). Each of the options is immediately exercisable, in whole or in part, at an exercise price of $10.00 per share. {(2)} There is no established market for the stock. Assumes fair market value per share of $6.00 on date of grant.

Number of Shares Percentage NAME BENEFICIALLY OWNED OF CLASS Statistical Plastics Corporation 705,000 18.59% MGS Mfg. Group, Inc. 2,015,950 {(1)} 42.07% Moldmakers Leasing & Investments 1,517,560 {(1)} 31.67% Mark G. Sellers 7,301,510 {(2)} 83.05% Scott W. Scampini 70,800 1.87% Jeffrey A. Kolbow 9,000 * Rade R. Petrovic 39,000 1.02% Bruce L. Schneider 30,600 * Craig R. Hall 0 - John R. Burt 9,130 * All directors and officers as a group (7) 7,460,040 {(3)} 84.85% Member of MGS Group of companies; the mailing address is W188 N11707 Maple Road, Germantown, WI 53022-8214 * Less than 1% {(1)} Includes 1,000,000 shares subject to options exercisable within 60 days {(2)} Includes (a) 4,238,510 shares beneficially owned by the MGS Group companies (including options exercisable within 60 days) listed in the table and in which Mr. Sellers directly or indirectly holds a majority of the equity interests and over which Mr. Sellers exercises management and voting control as principal executive officer, (b) 1,750,000 shares subject to options which are exercisable within 60 days, and (c) 1,250,000 shares which are exercisable within 60 days held by trusts of which Mr. Sellers is trustee. {(3)} Includes shares subject to options which are exercisable within 60 days

COMPANY AMOUNT EXPENSED{(1)} Statistical Plastics Corporation $470,536 Moldmakers Management, Inc. $156,846 MGS Enterprises, Inc. $156,846 {(1)}Amounts due were applied to reduce the outstanding stock subscription receivable.

MGS Group Fiscal 2000 COMPANY PRODUCTS OR SERVICES AMOUNT Moldmakers, Tooling $3,817,966 Incorporated Maint./Shipping/Quality 582,142 O&S Design Design 241,173 Moldmakers Die Cast Maint./Shipping/Quality 70,995 Tooling Division Prototype Mold & Design Maint./Shipping/Quality 523,088 Statistical Plastics Mold Sampling Corporation Quality/Operators/Consulting 272,427

Fiscal 2000 MGS GROUP COMPANY SERVICES AMOUNT Moldmakers, Incorporated Project Management $366,794 Moldmakers Die Casting Division Project Management 25,841 Prototype Mold & Design Project Management/Maint. 129,248

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