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Exposures
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Event Codes
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Wiki	Wiki Summary
Competition (economics)	In economics, competition is a scenario where different economic firms are in contention to obtain goods that are limited by varying the elements of the marketing mix: price, product, promotion and place. In classical economic thought, competition causes commercial firms to develop new products, services and technologies, which would give consumers greater selection and better products.
Competition	Competition is a rivalry where two or more parties strive for a common goal which cannot be shared: where one's gain is the other's loss (an example of which is a zero-sum game). Competition can arise between entities such as organisms, individuals, economic and social groups, etc.
Nervous Conditions	Nervous Conditions is a novel by Zimbabwean author Tsitsi Dangarembga, first published in the United Kingdom in 1988. It was the first book published by a black woman from Zimbabwe in English.
Conditions (album)	Conditions is the debut studio album by Australian rock band The Temper Trap, released in Australia through Liberation Music on 19 June 2009. It was later released in the United Kingdom on 10 August 2009.
NASA facilities	There are NASA facilities across the United States and around the world. NASA Headquarters in Washington, DC provides overall guidance and political leadership to the agency.
Flight Facilities	Flight Facilities is an Australian electronic producer duo that also performs as Hugo & Jimmy. In 2009, they began mixing songs by other artists before crafting their own original material.
Pedestrian facilities	Pedestrian facilities include retail shops, museums, mass events (such as festivals or concert halls), hospitals, transport hubs (such as train stations or airports), sports infrastructure (such as stadiums) and religious infrastructures. The transport mode in such infrastructures is mostly walking, with rare exceptions.
Essential facilities doctrine	The essential facilities doctrine (sometimes also referred to as the essential facility doctrine) is a legal doctrine which describes a particular type of claim of monopolization made under competition laws. In general, it refers to a type of anti-competitive behavior in which a firm with market power uses a "bottleneck" in a market to deny competitors entry into the market.
Facilities engineering	Facilities engineering evolved from "plant engineering" in the early 1990s as U.S. workplaces became more specialized. Practitioners preferred this term because it more accurately reflected the multidisciplinary demands for specialized conditions in a wider variety of indoor environments, not merely manufacturing plants.
Attacks on U.S. diplomatic facilities	The United States maintains numerous embassies and consulates around the world, many of which are in war-torn countries or other dangerous areas.\n\n\n== Diplomatic Security ==\nThe Regional Security Office is staffed by Special Agents of the Diplomatic Security Service (DSS), and is responsible for all security, protection, and law enforcement operations in the embassy or consulate.
Table of contents	A table of contents, usually headed simply Contents and abbreviated informally as TOC, is a list, usually found on a page before the start of a written work, of its chapter or section titles or brief descriptions with their commencing page numbers.\n\n\n== History ==\nPliny the Elder credits Quintus Valerius Soranus (d.
Index of Windows games (A)	This is an index of Microsoft Windows games.\nThis list has been split into multiple pages.
Volume Table of Contents	In the IBM System/360 storage architecture, the Volume Table of Contents (VTOC), is a data structure that provides a way of locating the data sets that reside on a particular DASD volume. With the exception of the IBM Z® compatible disk layout in Linux on Z, it is the functional equivalent of the MS/PC DOS File Allocation Table (FAT), the Windows NT Master File Table (MFT), and the equivalent structure in, e.g., a Linux file system.
Table of Contents (Enochs)	Table of Contents is a sculpture designed by the American artist Dale Enochs. The sculpture is made from limestone and was commissioned by Joseph F. Miller.
ArcMap	ArcMap is the main component of Esri's ArcGIS suite of geospatial processing programs, and is used primarily to view, edit, create, and analyze geospatial data. ArcMap allows the user to explore data within a data set, symbolize features accordingly, and create maps.
Arithmetic	Arithmetic (from Ancient Greek ἀριθμός (arithmós) 'number', and τική [τέχνη] (tikḗ [tékhnē]) 'art, craft') is an elementary part of mathematics that consists of the study of the properties of the traditional operations on numbers—addition, subtraction, multiplication, division, exponentiation, and extraction of roots. In the 19th century, Italian mathematician Giuseppe Peano formalized arithmetic with his Peano axioms, which are highly important to the field of mathematical logic today.
Special Activities Center	The Special Activities Center (SAC) is a division of the Central Intelligence Agency responsible for covert operations and paramilitary operations. The unit was named Special Activities Division (SAD) prior to 2015.
Operations management	Operations management is an area of management concerned with designing and controlling the process of production and redesigning business operations in the production of goods or services. It involves the responsibility of ensuring that business operations are efficient in terms of using as few resources as needed and effective in meeting customer requirements.
Emergency operations center	An emergency operations center (EOC) is a central command and control facility responsible for carrying out the principles of emergency preparedness and emergency management, or disaster management functions at a strategic level during an emergency, and ensuring the continuity of operation of a company, political subdivision or other organization.\nAn EOC is responsible for strategic direction and operational decisions and does not normally directly control field assets, instead leaving tactical decisions to lower commands.
Operations research	Operations research (British English: operational research), often shortened to the initialism OR, is a discipline that deals with the development and application of advanced analytical methods to improve decision-making. It is sometimes considered to be a subfield of mathematical sciences.
Surgery	Surgery is a medical or dental specialty that uses operative manual and instrumental techniques on a person to investigate or treat a pathological condition such as a disease or injury, to help improve bodily function, appearance, or to repair unwanted ruptured areas.\nThe act of performing surgery may be called a surgical procedure, operation, or simply "surgery".
Standard temperature and pressure	Standard temperature and pressure (STP) are standard sets of conditions for experimental measurements to be established to allow comparisons to be made between different sets of data. The most used standards are those of the International Union of Pure and Applied Chemistry (IUPAC) and the National Institute of Standards and Technology (NIST), although these are not universally accepted standards.
Manufacturing	Manufacturing is the creation or production of goods with the help of equipment, labor, machines, tools, and chemical or biological processing or formulation. It is the essence of secondary sector of the economy.
Manufacturing engineering	Manufacturing engineering is a branch of professional engineering that shares many common concepts and ideas with other fields of engineering such as mechanical, chemical, electrical, and industrial engineering. \nManufacturing engineering requires the ability to plan the practices of manufacturing; to research and to develop tools, processes, machines and equipment; and to integrate the facilities and systems for producing quality products with the optimum expenditure of capital.The manufacturing or production engineer's primary focus is to turn raw material into an updated or new product in the most effective, efficient & economic way possible.
Net income	In business and accounting, net income (also total comprehensive income, net earnings, net profit, bottom line, sales profit, or credit sales) is an entity's income minus cost of goods sold, expenses, depreciation and amortization, interest, and taxes for an accounting period.It is computed as the residual of all revenues and gains less all expenses and losses for the period, and has also been defined as the net increase in shareholders' equity that results from a company's operations. It is different from gross income, which only deducts the cost of goods sold from revenue.
Dirichlet conditions	In mathematics, the Dirichlet conditions are sufficient conditions for a real-valued, periodic function f to be equal to the sum of its Fourier series at each point where f is continuous. Moreover, the behavior of the Fourier series at points of discontinuity is determined as well (it is the midpoint of the values of the discontinuity).
Twenty-one Conditions	The Twenty-one Conditions, officially the Conditions of Admission to the Communist International, refer to the conditions, most of which were suggested by Vladimir Lenin, to the adhesion of the socialist parties to the Third International (Comintern) created in 1919. The conditions were formally adopted by the Second Congress of the Comintern in 1920.
Causality conditions	In the study of Lorentzian manifold spacetimes there exists a hierarchy of causality conditions which are important in proving mathematical theorems about the global structure of such manifolds. These conditions were collected during the late 1970s.The weaker the causality condition on a spacetime, the more unphysical the spacetime is.
Conditions races	Conditions races are horse races in which the weights carried by the runners are laid down by the conditions attached to the race. Weights are allocated according to the sex of the runners, with female runners carrying less weight than males; the age of the runners, with younger horses receiving weight from older runners to allow for relative maturity, referred to as weight for age; and the quality of the runners, with horses that have won certain values of races giving weight to less successful entrants.
Common stock	Common stock is a form of corporate equity ownership, a type of security. The terms voting share and ordinary share are also used frequently outside of the United States.
Preferred stock	Preferred stock (also called preferred shares, preference shares, or simply preferreds) is a component of share capital that may have any combination of features not possessed by common stock, including properties of both an equity and a debt instrument, and is generally considered a hybrid instrument. Preferred stocks are senior (i.e., higher ranking) to common stock but subordinate to bonds in terms of claim (or rights to their share of the assets of the company, given that such assets are payable to the returnee stock bond) and may have priority over common stock (ordinary shares) in the payment of dividends and upon liquidation.
Consolidation (business)	In business, consolidation or amalgamation is the merger and acquisition of many smaller companies into a few much larger ones. In the context of financial accounting, consolidation refers to the aggregation of financial statements of a group company as consolidated financial statements.
Stock market	A stock market, equity market, or share market is the aggregation of buyers and sellers of stocks (also called shares), which represent ownership claims on businesses; these may include securities listed on a public stock exchange, as well as stock that is only traded privately, such as shares of private companies which are sold to investors through equity crowdfunding platforms. Investment is usually made with an investment strategy in mind.
Treasury stock	A treasury stock or reacquired stock is stock which is bought back by the issuing company, reducing the amount of outstanding stock on the open market ("open market" including insiders' holdings). \nStock repurchases are used as a tax efficient method to put cash into shareholders' hands, rather than paying dividends, in jurisdictions that treat capital gains more favorably.
Convertible bond	In finance, a convertible bond or convertible note or convertible debt (or a convertible debenture if it has a maturity of greater than 10 years) is a type of bond that the holder can convert into a specified number of shares of common stock in the issuing company or cash of equal value. It is a hybrid security with debt- and equity-like features.

Risk Factors
SIMCLAR INC Item 1A Risk Factors This Report contains forward-looking statements that involve risks and uncertainties
Our actual results may differ significantly from the prospects discussed in the forward-looking statements
Factors that could cause or contribute to such differences include, but are not limited to, those listed below
The loss of a major customer would adversely affect us A substantial percentage, approximately 42prca of our sales for the year ended December 31, 2005, has been to five customers, the loss of any of which would adversely affect us
A substantial portion of our sales (17prca) is with one major customer, Illinois Tool Works (formerly PMI Foods Equipment Group) (“ITW”)
There are no long-term contracts with any customer
Substantially all of our sales and reorders are subject to competitive bids
Sales are dependent on the success of our customers, some of which operate in businesses associated with rapid technological change, vigorous competition, short product life cycles, and pricing and margin pressures
Additionally, certain of the industries served by us are subject to economic cycles and have in the past experienced, and are likely in the future to experience, recessionary periods
Developments adverse to our major customers or their products could have an adverse effect on us
A variety of conditions, both specific to each individual customer and generally affecting each customer’s industry, may cause customers to cancel, reduce or delay purchase orders and commitments without penalty, except for payment for services rendered, materials purchased and, in certain circumstances, charges associated with such cancellation, reduction or delay
In addition, we generate large accounts receivable in connection with our providing of electronic contract manufacturing
If one or more of our customers experiences financial difficulty and is unable to pay for the services provided by us, our operating results and financial condition would be adversely affected
We expect to continue to depend on sales to a limited number of major customers
Secured loans - existence of liens on certain assets All of our assets have been pledged as collateral for three bank loans
In December 2005, we entered into two amended credit facilities and one new credit facility with Bank of Scotland in Edinburgh, Scotland (“BoS”)
These credit facilities include an Amended Term Loan Facility Letter, an Amended Working Capital Facility Letter, a Working Capital Facility Letter, an Amended and Restated General Security Agreement, an Amended and Restated Pledge Agreement, and a Mortgage and a Guaranty
Please refer to the Liquidity and Capital Resources section under Item 7 for further discussion regarding these credit facilities
Our credit facilities impose operational and financial restrictions on us Our credit facilities with BoS, , in addition to subjecting all our assets as security for the bank financing, include substantial covenants that impose significant restrictions
Please refer to the Liquidity and Capital Resources section under Item 7 for a further description of these restrictions
-11- _________________________________________________________________ [72]Back to Table of Contents [73]Index to Financial Statements Our ability to comply with these covenants may be affected by changes in our financial condition or results of our operations, or other events beyond our control
The breach of any of the covenants would result in a default under our debt facilities
A default in the covenants would permit BoS to accelerate the maturity of our credit facilities and to sell the assets securing them, which could cause us to cease operations or seek bankruptcy protection
Our indebtedness requires us to dedicate a substantial portion of our cash flow from operations to payments on our debt, which could reduce amounts available for working capital and other general corporate purposes
The restrictions in our credit facility could also limit our flexibility in reacting to changes in our business and increases our vulnerability to general adverse economic and industry conditions
We operate in a highly competitive industry and our business may be harmed by competitive pressures Manufacturing and assembly of electro-mechanical and electronic components is a highly competitive industry characterized by a diversity and sophistication of products and components
We compete with major electronics firms that have substantially greater financial and technical resources and personnel than we do
We also face competition from many smaller, more specialized companies
We believe the primary competitive factors are pricing, quality of production, prompt customer service, timely delivery, engineering expertise, and technical assistance to customers
Among this mix of competitive standards, we believe we are competitive with respect to delivery time, quality, price and customer service
Price sensitivity becomes a paramount competitive issue in recessionary periods, and we may be at a competitive disadvantage with manufacturers with a lower cost structure, particularly off-shore manufacturers with lower labor and related production costs
To compete effectively, we must also provide technologically advanced manufacturing services, and respond flexibly and rapidly to customers’ design and schedule changes
Our inability to do so could have adverse effects on us
Customers in our industry are price-sensitive and, particularly in the recent economic downturn, there is substantial pressure from customers to reduce our prices
Our ability to remain competitive depends on our ability to meet these customer and competitive price pressures while protecting our profit margins
We have been engaged in and will have to continue cost reductions in overhead, manufacturing processes, and equipment retooling, while maintaining product flow, inventory control, and just-in-time shipping to our customers
If we are unable to accomplish these factors, we will not be competitive, and our business and operating results will be adversely impacted
Our revenues are contingent on the health of the industries we serve We rely on the continued growth and financial stability of our customers who operate in the following industry segments: · food preparation equipment; · data processing; · telecommunications; · power equipment; · instrumentation; and · military and government
These industry segments, to a varying extent, are subject to dynamic changes in technology, competition, short product life cycles, and economic recessionary periods
When our customers are adversely affected by these factors, we may be similarly affected
-12- _________________________________________________________________ [74]Back to Table of Contents [75]Index to Financial Statements Manufacture of electronic and electro-mechanical products, particularly designed for OEMs and manufactured to custom specifications, is cyclical, and demand for our products may decline Our business depends substantially on both the volume of electronic and electro-mechanical production by OEMs in the data processing, telecommunications, instrumentation and food preparation industries, and new specifications and designs for these OEMs
These industries have been cyclical over the years, and have experienced oversupply as well as significantly reduced demand, as we have experienced in recent years
An economic downturn can result in lower capacity utilization of our manufacturing operations and a shift in product mix toward lower margin assemblies
Changes in economic conditions and demand can result in customer rescheduling of orders and shipments, which affect our results of operations
Moreover, our need to invest in engineering, marketing, and customer services and support capabilities will limit our ability to reduce expenses, as we would attempt to do, in response to such downturns
We do not have long-term contracts with customers, and cancellations, reductions or delays in orders affect our profitability We do not typically obtain firm long-term contracts from our customers
Instead, we work closely with our customers to develop forecasts for upcoming orders, which are not binding, in order to properly schedule inventory and manufacturing
Our customers may alter or cancel their orders or demand delays in production for a number of reasons beyond our control, which may include: · market demand for products; · change in inventory control and procedures; · acquisitions of or consolidations among competing customers; · electronic design and technological advancements; and · recessionary economic environment
Any one of these factors may significantly change the total volume of sales and affect our operating results, in times of a recessionary environment and reduced demand for our customers’ products and in turn, our products and services
In addition, since much of our costs and operating expenses are relatively fixed, a reduction in customer demand would adversely affect our gross margins and operating income
Although we are always seeking new business and customers, we cannot be assured that we will be able to replace deferred, reduced or cancelled orders
Shortages of components as well as price fluctuations specified by our customers would delay shipments and adversely affect our profitability Substantially all of our sales are derived from electro-mechanical and subcontract electronic manufacturing in which we purchase components specified by our customers
Industry-wide shortages of electronic components, particularly components for PCB assemblies, have occurred
We did not experience any substantial supply shortages in 2003, but experienced some shortages in 2004 and 2005, which may increase as the world economy continues to recover and demand for electronic products increases
Should our industry experience a rapid recovery, shortages of components mostly likely will occur, and we may be forced to delay shipments, which could have an adverse effect on our profit margins and customer relations
Because of the continued increase in demand for surface mount components, we anticipate component shortages and longer lead times for certain components to occur from time to time
Also, we typically bear the risk of component price increases that occur, which accordingly could adversely affect our gross profit margins
As price increase pressures continue we are beginning to pass these increases on as competition allows
To the extent there is less customer demand or cancellations, we could have increased obsolescence
-13- _________________________________________________________________ [76]Back to Table of Contents [77]Index to Financial Statements Technological developments, satisfying customer designs and production requirements, quality and process controls are factors impacting our operations Our existing and future operations are and will be influenced by several factors, including technological developments, our ability to efficiently meet the design and production requirements of our customers, our ability to control costs, our ability to evaluate new orders to target satisfactory profit margins, and our capacity to develop and manage the introduction of new products
We also may not be able to adequately identify new product trends or opportunities, or respond effectively to new technological changes
Quality control is also essential to our operations, since customers demand strict compliance with design and product specifications
Any deviation from our quality and process controls would adversely affect our relationship with customers, and ultimately our revenues and profitability
Our operating results are subject to annual and quarterly fluctuation which could negatively impact our stock price There are a number of factors, beyond our control, that may affect our annual and quarterly results
These factors include: · the volume and timing of customer orders; · changes in labor and operating prices; · fluctuations in material cost and availability; · changes in domestic and international economies; · timing of our expenditures in anticipation of future orders; · increase in price competition, and competitive pressures on delivery time and product reliability; · changes in demand for customer products; · the efficiency and effectiveness of our automated manufacturing processes; · market acceptance of new products introduced by our customers; and · uneven seasonal demands by our customers
Any one or a combination of these factors can cause an adverse effect on our future annual and quarterly financial results
Fluctuations in our operating results could materially and adversely affect the market price of our common stock
Environmental laws may expose us to financial liability and restrictions on operations We are subject to a variety of federal, state and local laws and regulations relating to environmental, waste management, and health and safety concerns, including the handling, storage, discharge and disposal of hazardous materials used in or derived from our manufacturing processes
Proper waste disposal is a major consideration for printed circuit board manufacturers, which is a substantial part of our business, since metals and chemicals are used in our manufacturing process
Environmental controls are also essential in our other areas of electronic assembly
If we fail to comply with such environmental laws and regulations, then we could incur liabilities and fines and our operations could be suspended
This could also trigger indemnification of our lender under our credit facilities, as well as being deemed a default under such credit facilities
See “Our credit facilities impose operational and financial restrictions on us” above
Such laws and regulations could also restrict our ability to modify or expand our facilities, could require us to acquire costly equipment, or could impose other significant capital expenditures
In addition, our operations may give rise to claims of property contamination or human exposure to hazardous chemicals or conditions
Although we have not incurred any environmental problems in our operations, there can be no assurance that violations of environmental laws will not occur in the future due to failure to obtain permits, human error, equipment failure, or other causes
Furthermore, environmental laws may become more stringent and impose greater compliance costs and increase risks and penalties for violations
-14- _________________________________________________________________ [78]Back to Table of Contents [79]Index to Financial Statements Simclar Group controls over 73prca of our common stock and the affairs of our company Simclar Group owns 73dtta4prca of our outstanding common stock
Our common stock does not provide for cumulative voting, and therefore, the shareholders other than Simclar Group will be unable to elect any directors or have any significant impact in controlling the business or affairs of our company
The concentration of ownership with Simclar Group may also have the effect of delaying, deterring or preventing a change in control of our company, and would make transactions relating to our operations more difficult or impossible without the support of Simclar Group
Also, since we are a “controlled company” for purposes of the Nasdaq Stock Market’s corporate governance requirements, we are not required to comply with the provisions requiring that a majority of listed company directors be independent, the compensation of our executives to be determined by independent directors or nominees for election to our board of directors to be selected by independent directors
The price of our shares is volatile The market price of our common stock has substantially fluctuated in the past
The market price of our common stock has been as high as dlra6dtta80 per share in the second quarter of 2005 to as low as $
52 per share in the fourth quarter of 2002
Our common stock has limited trading volume, and it closed at dlra3dtta50 per share on March 15, 2006
There are a variety of factors which contribute to the volatility of our common stock
These factors include domestic and international economic conditions, stock market volatility, our reported financial results, fluctuations in annual and quarterly operating results, and general conditions in the contract manufacturing and technology sectors
Announcements concerning our company and competitors, our operating results, and any significant amount of shares eligible for future sale may also have an impact on the market price of our common stock
As a result of these factors, the volatility of our common stock prices may continue in the future
We have not declared dividends, and our credit facilities prohibit us from paying dividends without written consent from our lender Under Florida corporate law, holders of our common stock are entitled to receive dividends from legally available funds, when and if declared by our board of directors
We have not paid any cash dividends, and our board of directors does not intend to declare dividends in the foreseeable future
Our future earnings, if any, will be used to finance our capital requirements, repay bank borrowings and fund our operations
Our credit facilities prohibit us from paying any dividends without the written consent of the lender or making any other payments on our capital stock without the written consent of the lender
There can be no assurance that the lender will provide such consent
Possible delisting of our stock Our common stock trades on the Nasdaq Capital Market
There are certain qualitative and quantitative criteria for continued listing on the Nasdaq Capital Market, known as continued listing requirements
Failure to satisfy any one of these continued listing requirements could result in our securities being delisted from the Nasdaq Capital Market
These criteria include at least two active market makers, maintenance of dlra2cmam500cmam000 of stockholders’ equity (or alternatively, dlra35cmam000cmam000 in market capitalization or dlra500cmam000 in net income from operations in the latest fiscal year or 2 of the last 3 fiscal years), a minimum bid price for our common stock of dlra1dtta00, and at least 500cmam000 publicly held shares with a market value of at least dlra1cmam000cmam000, among others
Continued listing also requires compliance with the Nasdaq Stock Market’s corporate governance listing criteria
Usually, if a deficiency occurs for a period of 30 consecutive trading days (10 consecutive trading days for failure to satisfy the minimum market capitalization requirement), the particular company is notified by Nasdaq and has a grace period in which to achieve compliance
If the company is unable to demonstrate compliance after the expiration of any applicable grace period, the security is subject to delisting
The security might be able to trade on the Nasdaq OTC Bulletin Board, a less transparent trading market which may not provide the same visibility for the company or liquidity for its securities, as does the Nasdaq Capital Market
As a consequence, an investor may find it more difficult to dispose of or obtain prompt quotations as to the price of our securities, and may be exposed to a risk of decline in the market price of our common stock
-15- _________________________________________________________________ [80]Back to Table of Contents [81]Index to Financial Statements The Nasdaq Capital Market requires that we maintain a minimum market value of public float of dlra1cmam000cmam000 for continued listing
The publicly trading shares, exclusive of any affiliate ownership, which is the float for our common stock, is approximately 1cmam6583cmam092 shares, and as the closing price of our shares on March 15, 2006 was dlra3dtta50 per share, we currently satisfy that maintenance requirement
Our common stock has limited trading volume
There is the risk of being delisted from the Nasdaq Capital Market should our common stock fail to maintain a minimum bid price of dlra1dtta00 per share for 30 consecutive days, or we fail to meet other continued listing requirements
During 2004 we were notified by Nasdaq of a failure to meet its qualitative listing requirements due to the failure of our audit committee to comply with the independence criteria, although the company was able to correct this deficiency before further action by Nasdaq
Continued satisfaction of certain of the Nasdaq Capital Market continued listing requirements is beyond our control
There is no assurance that we will continue to satisfy the continued listing maintenance criteria, which, without a timely cure, could cause our securities to be delisted from the Nasdaq Capital Market
A significant downturn in the general economy could adversely affect our revenue, gross margin and earning
Our business is subject to inflation, rising interest rates, availability of capital markets, consumer spending rates, the effects of governmental plans to manage economic conditions and other national and global economic occurrences beyond our control which could have an adverse affect on our revenue, gross margin and earnings
As suppliers to the OEM market many of our products, and hence our revenue and gross margin, is strongly correlated with general economic conditions and with the level of business activity of our customers
Economic weakness and constrained customer spending has resulted in the past, and may result in the future, in decreased revenue, gross margin, earnings, or growth rates
We also have experienced, and may experience in the future, gross margin declines reflecting the effects of increased pressure for price concessions as our customers attempt to lower their cost structures and increased material costs as our suppliers attempt to increase their prices
In this environment, we may not be able to reduce our costs sufficiently to maintain our margins
Failure to attract and retain qualified personnel may result in difficulties in managing our business effectively and meeting revenue growth objective
Our ability to profitably manage and grow our business depends upon the contributions and abilities of key executives, operating officers and other personnel
The loss of the services of any of these key employees could have a material impact on the Companyapstas business and results of operations
In addition, continued growth and expansion of the Companyapstas contract manufacturing business in an extremely competitive market will require that it attract, motivate and retain additional skilled and experienced personnel
The inability to satisfy these requirements could have a negative impact on the Companyapstas ability to remain competitive in the future
There are inherent limitations in all control systems, and misstatements due to error or fraud may occur and may not be detected
Simclar’s management, including our Chief Executive Officer and Chief Financial Officer, does not expect that any company’s controls, including our own, will prevent all error and all fraud
A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met
The design of a control system must reflect the fact that there are resource constraints and the benefit of controls must be evaluated in relation to their costs
Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, in the company have been detected
These inherent limitations include the realities that judgments in decision making can be faulty and that breakdowns can occur because of simple error or mistake
Further, controls can be circumvented by individual acts of some persons, by collusion of two or more persons, or by management override of the controls
The design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions
Over time, a control may be inadequate because of changes in conditions or the degree of compliance with the policies or procedures may deteriorate
Because of inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected
-16- _________________________________________________________________ [82]Back to Table of Contents [83]Index to Financial Statements