2 unchanged sentences
In addition to the following disclosures, please refer to the other information contained in this report, including our consolidated financial statements and the related notes.
−Removed: The economic conditions around the world could adversely affect demand for our products and services and the financial health of our customers.
−Removed: Demand for our products and services depends upon worldwide economic conditions, including but not limited to overall economic growth rates, construction, consumer spending, financing availability, employment rates, interest rates, inflation, consumer confidence, defense spending levels, and the profits, capital spending, and liquidity of industrial companies.
−Removed: An economic downturn or financial market turmoil may depress demand for our products and/or services in all major geographies and markets.
−Removed: If customers are unable to purchase our products or services because of unavailable credit or unfavorable credit terms, depressed end-user demand, or are simply unwilling to purchase our products or services, our net sales and earnings will be adversely affected.
−Removed: Also, we are subject to the risk that our customers will have financial difficulties, which could harm their ability to satisfy their obligation to pay accounts receivable.
−Removed: Further, an economic downturn may affect our ability to satisfy the financial covenants in the terms of our financing arrangements.
−Removed: We operate in the highly competitive industries and we depend on continuing outsourcing by OEMs.
−Removed: We compete against many companies that engineer and manufacture complex electromedical and electromechanical products medical, aerospace & defense products and industrial products.
−Removed: The larger global competitors have more resources and greater economies of scale and have more geographically diversified international operations.
−Removed: We also compete with OEM operations that are continually evaluating manufacturing products internally against the advantages of outsourcing or delaying their decision to outsource.
−Removed: We may also be at a competitive disadvantage with respect to price when compared to manufacturers with excess capacity, lower cost structures and availability of lower cost labor.
−Removed: Competitive factors in our targeted markets are believed to be product and service pricing, quality, the ability to meet delivery schedules, customer service, value-added engineering, technology solutions, geographic location and price.
−Removed: We also expect that our competitors will continue to improve the performance of their current products or services, to reduce their current products or service sales prices and improve services that maybe offered.
−Removed: Any of these could cause a decline in sales, loss of market share, or lower profit margin.
−Removed: The availability of excess manufacturing capacity of our competitors also creates competitive pressure on price and winning new business.
−Removed: We must continue to provide a quality product, be responsive and flexible to customers’ requirements, and deliver to customers’ expectations.
−Removed: Our lack of execution could have an adverse effect on our results of operations and financial condition.
−Removed: We offer a full range of value-added engineering, technical and manufacturing services and support including project management, designing, testing, prototyping, manufacturing, supply chain management and post-market services.
−Removed: Our engineering revenue depends on our ability to deliver quality value-added engineering services required by our customers.
−Removed: The markets for our engineering services are characterized by rapidly changing technology and evolving process development.
−Removed: The continued success of our business will depend upon our ability to hire and retain qualified engineering personnel and maintain and enhance our technological leadership.
−Removed: Although we believe that we currently have the ability to provide the value-added engineering services that is required by our customers, there is no certainty that we will develop the capabilities required by our customers in the future.
−Removed: The emergence of new technology, industry standards or customer requirements may render the engineering services we currently provide obsolete or uncompetitive.
−Removed: The acquisition and implementation of new engineering knowledge, technical skills and related equipment may require significant expense that could adversely affect our operating results, as could our failure to anticipate and adapt to our customers’ changing technological requirements.
−Removed: We may not meet regulatory quality standards applicable to our manufacturing and quality processes which could have an adverse effect on our business.
−Removed: We are registered with the FDA and are subject to periodic inspection by the Food and Drug Administration (FDA) for compliance with the FDA’s Quality System Regulation/Medical Device Good Manufacturing Practices requirements, which require manufacturers of medical devices to adhere to certain regulations, including testing, quality control and documentation procedures.
−Removed: We are also ITAR registered which is required for our manufacturing of defense related products.
−Removed: Compliance with applicable regulatory requirements is subject to continual review and is rigorously monitored through periodic inspections and product field monitoring.
−Removed: If any inspection reveals noncompliance with these regulations, it could adversely affect our operations.
−Removed: Pandemics or disease outbreaks such as the current novel coronavirus (COVID-19 virus) pandemic have affected and is expected to continue to affect adversely our operations, supply chains, financial condition and results of operations.
−Removed: The coronavirus (COVID-19) pandemic is adversely affecting, and is expected to continue to affect adversely, our operations, supply chains, financial condition and results of operations, and we have experienced and expect to continue to experience unpredictable reductions in demand for certain of our services.
−Removed: During the current COVID-19 pandemic, the Company has experienced reduced sales, supply chain disruption, product shipping disruptions, reduced customer demand and reduced availability of workforce.
−Removed: Outbreaks of epidemic, pandemic, or contagious diseases, such as, historically, the Ebola virus, Middle East Respiratory Syndrome, Severe Acute Respiratory Syndrome, or the H1N1 virus, could cause a disruption to our business.
−Removed: Business disruptions could include temporary closures of our facilities or the facilities of our suppliers, reduced demand from customers, unavailability or restricted availability of our material portions of our workforce, raw materials or components necessary to manufacture our products, or disruptions or restrictions on our ability to travel or to distribute our products.
−Removed: Any disruption of our operations, our suppliers or our customers would likely impact our sales and operating results.
−Removed: In addition, a significant outbreak of epidemic, pandemic, or contagious diseases in the human population could result in a widespread health crisis that could adversely affect the economies and financial markets of many countries, resulting in an economic downturn that could affect demand for our products and services.
−Removed: Any of these events could negatively impact our sales and have a material adverse effect on our business, financial condition, results of operations, or cash flows.
−Removed: The impact of COVID-19 did result in a triggering event for goodwill and long-lived assets.
−Removed: See Note 4, Goodwill and Other Intangible Assets , for a discussion related to a full impairment of goodwill for the year ended December 31, 2020.
−Removed: Based on our assessment we concluded no impairment of long-lived assets as of December 31, 2020.
−Removed: We may be subject to additional regulatory scrutiny in the form of an audit or review as a result of our Paycheck Protection Program Promissory Note which would have an adverse effect on our liquidity.
−Removed: On April 15, 2020, we entered into a Promissory Note with Bank of America, N.A.
−Removed: (the “Promissory Note”), which provides for an unsecured loan of $6.1 million pursuant to the Paycheck Protection Program (“PPP”) under the Coronavirus Aid, Relief, and Economic Security Act and applicable regulations (the “CARES Act”) of which;
−Removed: funds were received on April 22, 2020.
−Removed: On April 23, 2020, the Small Business Administration (“SBA”) issued new guidance that questioned whether a public company with substantial market value and access to capital markets would qualify to participate in the PPP under the CARES Act.
−Removed: Subsequently, on April 28, 2020, the secretary of the Treasury and SBA announced that the government will review all PPP loans of more than $2 million for which a borrower applies for forgiveness.
−Removed: Should we be audited or reviewed by the U.S.
−Removed: Department of Treasury as a result of filing an application for forgiveness or otherwise, such audit or review could result in legal and reputational costs as well as significant use of management time.
−Removed: While the Company believes that it acted in good faith and has complied with all requirements of the PPP, if we are audited and receive an adverse or negative finding in such audit, we could be required to return up to the full amount of the Promissory Note, which would reduce our liquidity by such amount and potentially subject us to fines and penalties.
−Removed: We expect that all or a significant portion of the Promissory Note will be forgiven;
−Removed: we plan to apply for forgiveness in the second or third quarter of 2021 before the application deadline.
+Added: Risks Related to our Business
A large percentage of our sales have been made to a small number of customers, and the loss of a major customer, if not replaced, would adversely affect us.
−Removed: Our largest customer has two divisions that account for 23.4% and 22.5% of net sales for the years ended December 31, 2020 and 2019, respectively.
+Added: Our largest customer has accounts for 26.9% and 23.4% of net sales for the years ended December 31, 2021 and 2020, respectively.
The loss of a substantial portion of net sales to our largest customers could have a material adverse effect on us.
−Removed: We are dependent on suppliers for electronic components and may experience shortages, extended lead times, cost premiums and shipment delays that would adversely affect our customers and us.
+Added: We are dependent on suppliers for components and raw materials and may experience shortages, extended lead times, cost premiums and shipment delays that would adversely affect our customers and us.
We purchase raw materials, commodities and components for use in our production.
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Fuel and energy cost increases could also adversely affect our freight and operating costs.
−Removed: Due to customer specifications and requirements, we are dependent on suppliers to provide critical electronic components and materials for our operations that could result in shortages of some of the electronic components needed for their production.
−Removed: Component shortages may result in expedited freight, overtime premiums and increased component costs.
+Added: Due to customer specifications and requirements, we are dependent on suppliers to provide critical electronic and other components and materials for our operations that could result in shortages of some of the components needed for production.
+Added: Component shortages may result in an inability to deliver products on time or at all, expedited freight, overtime premiums and increased component costs.
In addition to the financial impact on operations from lost revenue and increased cost, there could potentially be harm to our customer relationships.
+Added: To reduce the effects of supply chain disruption for our customers, we have increased inventory significantly, which has resulted in a reduction of cash available.
+Added: If we are unable to sell such inventory or sell such inventory within a reasonable timeframe, it may adversely affect our operations and financial results.
Our customers cancel orders, change order quantity, timing and specifications that if not managed would have an adverse effect on inventory carrying costs.
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We estimate and reserve for any known or potential impact from these possibilities.
−Removed: Our exposure to financially troubled customers, start-up businesses or suppliers may adversely affect our financial results.
−Removed: We provide manufacturing services to companies and industries that have in the past, and may in the future, experience financial difficulty.
−Removed: Also, we provide services and products to new and high growth companies.
−Removed: If our customers experience financial difficulty or lack of funding for operations, we could have difficulty recovering amounts owed to us from these customers, or demand for our services or products from these customers could decline.
−Removed: Additionally, if our suppliers experience financial difficulty, we could have difficulty sourcing supply necessary to fulfill production requirements and meet scheduled shipments.
−Removed: If one or more of our customers were to become insolvent or otherwise were unable to pay for the services provided by us on a timely basis, or at all, our operating results and financial condition could be adversely affected.
−Removed: Such adverse effects could include one or more of the following:
−Removed: an increase in our provision for doubtful accounts, a charge for inventory write-offs, a reduction in revenue, and an increase in our working capital requirements due to higher inventory levels and increases in days our accounts receivables are outstanding.
+Added: We depend heavily on our people and may from time to time have difficulty attracting and retaining skilled employees.
+Added: Our operations depend upon the continued contributions of our key management, marketing, technical, financial, accounting, product development engineers, sales people and operations personnel.
+Added: We also believe that our continued success will depend upon our ability to attract, retain and develop highly skilled managerial and technical resources and direct labor resources within our highly competitive industries.
+Added: Not being able to attract or retain these employees could have a material adverse effect on revenues and earnings.
+Added: Our engineering revenue depends on our ability to deliver quality value-added engineering services required by our customers.
+Added: The markets for our engineering services are characterized by rapidly changing technology and evolving process development.
+Added: The continued success of our business will depend upon our ability to hire and retain qualified engineering personnel and maintain and enhance our technological leadership.
+Added: Although we believe that we currently have the ability to provide the value-added engineering services that is required by our customers, there is no certainty that we will develop the capabilities required by our customers in the future.
+Added: The emergence of new technology, industry standards or customer requirements may render the engineering services we currently provide obsolete or uncompetitive.
+Added: The acquisition and implementation of new engineering knowledge, technical skills and related equipment may require significant expense that could adversely affect our operating results, as could our failure to anticipate and adapt to our customers’
+Added: changing technological requirements.
+Added: We operate in highly competitive industries and we depend on continuing outsourcing by OEMs.
+Added: We compete against many companies that engineer and manufacture complex electromedical and electromechanical products medical, aerospace & defense products and industrial products.
+Added: The larger global competitors have more resources and greater economies of scale and have more geographically diversified international operations.
+Added: We also compete with OEM operations that are continually evaluating manufacturing products internally against the advantages of outsourcing or delaying their decision to outsource.
+Added: We may also be at a competitive disadvantage with respect to price when compared to manufacturers with excess capacity, lower cost structures and availability of lower cost labor.
+Added: Competitive factors in our targeted markets are believed to be product and service pricing, quality, the ability to meet delivery schedules, customer service, value-added engineering, technology solutions, geographic location and price.
+Added: We also expect that our competitors will continue to improve the performance of their current products or services, to reduce their current products or service sales prices and improve services that maybe offered.
+Added: Any of these could cause a decline in sales, loss of market share, or lower profit margin.
+Added: The availability of excess manufacturing capacity of our competitors also creates competitive pressure on price and winning new business.
+Added: We must continue to provide a quality product, be responsive and flexible to customers’
+Added: requirements, and deliver to customers’
+Added: expectations.
+Added: Our lack of execution could have an adverse effect on our results of operations and financial condition.
+Added: We offer a full range of value-added engineering, technical and manufacturing services and support including project management, designing, testing, prototyping, manufacturing, supply chain management and post-market services.
+Added: The manufacture and sale of products carries potential risk for product liability claims .
+Added: We represent and warrant the goods and services we deliver are free from defects in material and workmanship generally for one year.
+Added: If a product liability claim results in our being liable, it could have a material adverse effect on our business and financial position.
+Added: We have insurance coverage for products liability claims, but there can be no assurances that the amount of coverage will be adequate or that insurance proceeds will be available for a particular claim.
The Company is majority owned by one group of shareholders, and those shareholders may be able to take actions that do not reflect the will or best interests of other shareholders.
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As a result, our majority shareholder group will have the ability to elect all of the members of our Board of Directors and thereby control our policies and operations, including the appointment of management, future issuances of our common stock or other securities, the payment of dividends, if any, on our common stock, the incurrence or modification of debt by us, amendments to our amended and restated certificate of incorporation and amended and restated bylaws and the entering into of extraordinary transactions, and their interests may not in all cases be aligned with your interests.
−Removed: In addition, the majority shareholder group may have an interest in pursuing transactions that, in its judgment, could enhance its investment, even though such transactions might impact you inconsistent with your investment objectives.
+Added: In addition, the majority shareholder group may have an interest in pursuing transactions that, in its judgment, could enhance its investment, even though such transactions might be inconsistent with your investment objectives.
As a majority owned or controlled company, NASDAQ does not require the Company to comply with certain corporate governance rules including that we are not required to have a majority of independent directors on the board, an independent compensation committee, or an independent nominating and corporate governance committee.
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Having fewer independent directors or fewer independent members of the Compensation and Talent Committee or the Nominating and Corporate Governance Committee may result in increased influence of the majority ownership group over business operations.
−Removed: The manufacture and sale of products carries potential risk for product liability claims .
−Removed: We represent and warrant the goods and services we deliver are free from defects in material and workmanship generally for one year.
−Removed: If a product liability claim results in our being liable, it could have a material adverse effect on our business and financial position.
−Removed: We have insurance coverage for products liability claims, but there can be no assurances that the amount of coverage will be adequate or that insurance proceeds will be available for a particular claim.
−Removed: Complying with securities laws, tax laws, accounting policies and regulations, and subsequent changes, may be costly for us and adversely affect our financial statements.
−Removed: New or changing laws, regulations, policy and standards relating to corporate governance and public disclosure, including SEC and Nasdaq regulations, domestic or international tax legislation and the implementation of significant changes in the United States Generally Accepted Accounting Principles (“GAAP”), present challenges due to complexities, assumptions and judgements required to implement.
−Removed: We apply judgments based on our understanding, interpretation and analysis of the relevant facts, circumstances, historical experience and valuations, as appropriate.
−Removed: As a result, actual amounts could differ from those estimated at the time the financial statements are issued.
−Removed: In addition, implementation may change the financial accounting or reporting standards that govern the preparation of our financial statements or authoritative entities could reverse their previous interpretations or positions on how various financial accounting or reporting standards should be applied.
−Removed: These changes may be difficult to predict and implement and could materially or otherwise impact how we prepare and report our estimates, uncertainties, financial statements, operating results and financial condition.
−Removed: Our efforts to comply with evolving laws, regulations, accounting policies and standards have resulted in, and are likely to continue to result in, increased general and administrative expenses and management time and attention from revenue-generating activities to compliance activities and may have an adverse effect on our financial statements, including cash flows.
−Removed: We depend heavily on our people and may from time to time have difficulty attracting and retaining skilled employees.
−Removed: Our operations depend upon the continued contributions of our key management, marketing, technical, financial, accounting, product development engineers, sales people and operational personnel.
−Removed: We also believe that our continued success will depend upon our ability to attract, retain and develop highly skilled managerial and technical resources within our highly competitive industries.
−Removed: Not being able to attract or retain these employees could have a material adverse effect on revenues and earnings.
−Removed: Anti-Corruption and Trade Laws - We may incur costs and suffer damages if our employees, agents, or suppliers violate anti-bribery, anti-corruption or trade laws and regulations.
−Removed: Laws and regulations related to bribery, corruption and trade, and enforcement thereof, are increasing in frequency, complexity and severity on a global basis.
−Removed: The continued geographic expansion of our business into China and Mexico increases our exposure to, and cost of complying with, these laws and regulations.
−Removed: If our internal controls and compliance program do not adequately prevent or deter our employees, agents, suppliers and other third parties with whom we do business from violating anti-corruption laws, we may incur defense costs, fines, penalties, reputational damage and business disruptions.
−Removed: Changes in currency translation rates could adversely impact our revenue and earnings.
−Removed: Changes in exchange rates will impact our reported sales and earnings.
−Removed: A majority of our manufacturing and cost structure is based in the United States.
−Removed: In addition, decreased value of local currency may adversely affect demand for our products and may adversely affect the profitability of our products in U.S.
−Removed: dollars in foreign markets where payments are made in the local currency.
Operating in foreign countries exposes our operations to risks that could adversely affect our operating results.
We operate manufacturing facilities in Mexico and China.
−Removed: Our operations in those countries are subject to risks that could adversely impact our financial results, such as economic or political volatility, foreign legal and regulatory requirements, international trade factors (export controls, trade sanctions, duties, tariff barriers and other restrictions), protection of our and our customers’ intellectual property and proprietary technology in certain countries, potentially burdensome taxes, crime, employee turnover, staffing, managing personnel in diverse culture, labor instability, transportation delays, and foreign currency fluctuations.
−Removed: Non-compliance with environmental laws may result in restrictions and could adversely affect operations.
−Removed: Our operations are regulated under a number of federal, state, and foreign environmental and safety laws and regulations that govern the discharge of hazardous materials into the air and water, as well as the handling, storage, and disposal of such materials.
−Removed: These laws and regulations include the Clean Air Act;
−Removed: the Clean Water Act;
−Removed: the Resource Conservation and Recovery Act;
−Removed: and the Comprehensive Environmental Response, Compensation, and Liability Act;
−Removed: as well as similar federal, state and foreign laws.
−Removed: Compliance with these environmental laws is a major consideration for us due to our manufacturing processes and materials.
−Removed: It is possible we may be subject to potential financial liability for costs associated with the investigation and remediation at our sites;
−Removed: this may have an adverse effect on operations.
−Removed: We have not incurred significant costs related to compliance with environmental laws and regulations and we believe that our operations comply with all applicable environmental laws.
+Added: Our operations in those countries are subject to risks that could adversely impact our financial results, such as economic or political volatility, foreign legal and regulatory requirements, international trade factors (export controls, trade sanctions, duties, tariff barriers and other restrictions), protection of our and our customers’
+Added: intellectual property and proprietary technology in certain countries, potentially burdensome taxes, crime, employee turnover, staffing, managing personnel in diverse culture, labor instability, transportation delays, and foreign currency fluctuations.
Environmental laws could also become more stringent over time, imposing greater compliance costs and increasing risks and penalties associated with violation.
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It is possible that environmental compliance costs and penalties from new or existing regulations may harm our business, financial condition, and results of operations.
−Removed: We may be subject to risks associated with our acquisitions, and the risks could adversely affect our operating results.
−Removed: Our strategy is to grow our business organically and through acquisitions, alliances and joint venture arrangements.
−Removed: We will continue to pursue and acquire additional businesses in our industries that fit our long-term objectives for growth and profitability.
−Removed: The success of our acquisitions will depend on our ability to integrate the new operations with the existing operations.
−Removed: The Company cannot ensure that the expected benefits of any acquisition will be realized.
−Removed: Costs could be incurred on pursuits or proposed acquisitions that have not yet or may not close which could significantly impact the operating results, financial condition, or cash flows.
−Removed: Additionally, after the acquisition, unforeseen issues could arise which adversely affect the anticipated returns or which are otherwise not recoverable as an adjustment to the purchase price.
−Removed: Other acquisition risks include delays in realizing benefits from the acquired companies or products;
−Removed: difficulties due to lack of or limited prior experience in any new product or geographic markets we enter;
−Removed: unforeseen losses of customers of, or suppliers to, acquired businesses;
−Removed: difficulties in retaining key employees of the acquired businesses;
−Removed: or challenges arising from increased geographic diversity and complexity of our operations and our information technology systems.
−Removed: The price we pay for a business may exceed the value we realize and we cannot assure you that we will achieve the expected synergies and benefits of any acquisition.
−Removed: Acquisitions may result in the recording of goodwill and other intangible assets which are subject to potential impairments in the future that could harm our financial results.
−Removed: If we fail to comply with the covenants contained in our credit agreement, we may be unable to secure additional financing and repayment obligations on our outstanding indebtedness may be accelerated.
−Removed: Our credit agreement contains financial and operating covenants with which we must comply.
−Removed: As of December 31, 2020, we were in compliance with these covenants.
−Removed: However, our continued compliance with these covenants is dependent on our financial results, which are subject to fluctuation as described elsewhere in these risk factors.
−Removed: If we fail to comply with the covenants in the future or if our lender does not agree to waive any future non-compliance, we may be unable to borrow funds and any outstanding indebtedness could become immediately due and payable, which could materially harm our business.
+Added: Risks Related to our Assets
We are dependent on our information technology systems for order, inventory and production management, financial reporting, communications and other functions.
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We rely on our information technology systems to effectively manage our operational and financial functions.
−Removed: Our computer systems, Internet web sites, telecommunications, and data networks are vulnerable to damage or interruption from power loss, natural disasters and other sources of physical damage or disruption to the equipment which maintains, stores and hosts our information technology systems.
+Added: Our computer systems, web sites, telecommunications, and data networks are vulnerable to damage or interruption from power loss, natural disasters and other sources of physical damage or disruption to the equipment which maintains, stores and hosts our information technology systems.
We have taken steps to protect and create redundancies for the equipment that facilitates the use of our management information systems, but these steps may not be adequate to ensure that our operations are not disrupted by events within and outside of our control.
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Such consequences could materially and adversely affect our results of operations.
−Removed: Our business may be impacted by natural disasters or future climate change.
−Removed: Natural disasters, such as tornadoes and earthquakes, and possible future changes in climate could negatively impact our business and supply chain.
−Removed: Our properties may be exposed to rare catastrophic weather events, such as severe storms and/or floods.
−Removed: If the frequency of extreme weather events increases due to climate change, our exposure to these events could increase.
−Removed: In countries that we rely on for operations and materials, such as Mexico and China, potential natural disasters or future climate changes could disrupt our manufacturing operations, reduce demand for our customers’ products and increase supply chain costs.
−Removed: If we use hazardous materials in a manner that causes contamination or injury, we could be liable for resulting damages.
−Removed: We are subject to Federal, State, and local laws, rules and regulations governing the use, discharge, storage, handling, and disposal of biological material, chemicals, and waste.
−Removed: We cannot eliminate the risk of accidental contamination or injury to employees or third parties from the use, storage, handling, or disposal of these materials.
−Removed: In the event of contamination or injury, we could be held liable for any resulting damages, remediation costs, and any related penalties or fines.
−Removed: This liability could exceed our resources or any applicable insurance coverage we may have.
−Removed: The cost of compliance with these laws and regulations may become significant, and our failure to comply may result in substantial fines or other consequences, and either could have a significant impact on our operating results.
+Added: We have insurance coverage for cyber liability, but there can be no assurances that the amount of coverage will be adequate or that insurance proceeds will be available for a particular claim.
+Added: Financial Risks
+Added: If we fail to comply with the covenants contained in our credit agreement, we may be unable to secure additional financing and repayment obligations on our outstanding indebtedness may be accelerated.
+Added: Our credit agreement contains financial and operating covenants with which we must comply.
+Added: As of December 31, 2021, we were in compliance with these covenants.
+Added: However, our continued compliance with these covenants is dependent on our financial results, which are subject to fluctuation as described elsewhere in these risk factors.
+Added: If we fail to comply with the covenants in the future or if our lender does not agree to waive any future non-compliance, we may be unable to borrow funds and any outstanding indebtedness could become immediately due and payable, which could materially harm our business.
+Added: Our exposure to financially troubled customers, start-up businesses or suppliers may adversely affect our financial results.
+Added: We provide manufacturing services to companies and industries that have in the past, and may in the future, experience financial difficulty.
+Added: Also, we provide services and products to new and high growth companies.
+Added: If our customers experience financial difficulty or lack of funding for operations, we could have difficulty recovering amounts owed to us from these customers, or demand for our services or products from these customers could decline.
+Added: Additionally, if our suppliers experience financial difficulty, we could have difficulty sourcing supply necessary to fulfill production requirements and meet scheduled shipments.
+Added: If one or more of our customers were to become insolvent or otherwise were unable to pay for the services provided by us on a timely basis, or at all, our operating results and financial condition could be adversely affected.
+Added: Such adverse effects could include one or more of the following:
+Added: an increase in our provision for doubtful accounts, a charge for inventory write-offs, a reduction in revenue, and an increase in our working capital requirements due to higher inventory levels and increases in days our accounts receivables are outstanding.
+Added: Changes in currency translation rates could adversely impact our revenue and earnings.
+Added: Changes in exchange rates will impact our reported sales and earnings.
+Added: A majority of our manufacturing and cost structure is based in the United States.
+Added: In addition, decreased value of local currency may adversely affect demand for our products and may adversely affect the profitability of our products in U.S.
+Added: dollars in foreign markets where payments are made in the local currency.
We do not expect to pay dividends for the foreseeable future, and we may never pay dividends;
9 unchanged sentences
We may in the future be the target of similar litigation.
−Removed: Securities litigation could result in substantial costs and liabilities and could divert management’s attention and resources.
+Added: Securities litigation could result in substantial costs and liabilities and could divert management’s attention and resources.
+Added: Pandemics or disease outbreaks such as the current novel coronavirus (COVID-19 virus) pandemic have affected and is expected to continue to adversely affect our operations, supply chains, financial condition and results of operations.
+Added: The coronavirus (COVID-19) pandemic is affecting, and is expected to continue to affect, our operations, supply chains, financial condition and results of operations.
+Added: During the current COVID-19 pandemic, the Company has experienced reduced sales, supply chain disruption, product shipping disruptions, reduced customer demand and reduced availability of workforce.
+Added: Outbreaks of epidemic, pandemic, or contagious diseases, such as, historically, the Ebola virus, Middle East Respiratory Syndrome, Severe Acute Respiratory Syndrome, or the H1N1 virus, could cause a disruption to our business.
+Added: Business disruptions could include temporary closures of our facilities or the facilities of our suppliers, reduced demand from customers, unavailability or restricted availability of our material portions of our workforce, raw materials or components necessary to manufacture our products, or disruptions or restrictions on our ability to travel or to distribute our products.
+Added: Any disruption of our operations, our suppliers or our customers would likely impact our sales and operating results.
+Added: In addition, a significant outbreak of epidemic, pandemic, or contagious diseases in the human population could result in a widespread health crisis that could adversely affect the economies and financial markets of many countries, resulting in an economic downturn that could affect demand for our products and services.
+Added: Any of these events could negatively impact our sales and have a material adverse effect on our business, financial condition, results of operations, or cash flows.
+Added: The impact of COVID-19 did result in a triggering event for goodwill and long-lived assets in 2020.
+Added: See Note 4, Goodwill and Other Intangible Assets , for a discussion related to a full impairment of goodwill for the year ended December 31, 2020.
+Added: We concluded no impairment of long-lived assets as of December 31, 2021 or 2020.
+Added: The economic conditions around the world could adversely affect demand for our products and services and the financial health of our customers.
+Added: Demand for our products and services depends upon worldwide economic conditions, including but not limited to overall economic growth rates, construction, consumer spending, financing availability, employment rates, interest rates, inflation, consumer confidence, defense spending levels, and the profits, capital spending, and liquidity of industrial companies.
+Added: An economic downturn or financial market turmoil may depress demand for our products and/or services in all major geographies and markets.
+Added: If customers are unable to purchase our products or services because of unavailable credit or unfavorable credit terms, depressed end-user demand, or are simply unwilling to purchase our products or services, our net sales and earnings will be adversely affected.
+Added: Also, we are subject to the risk that our customers will have financial difficulties, which could harm their ability to satisfy their obligation to pay accounts receivable.
+Added: Further, an economic downturn may affect our ability to satisfy the financial covenants in the terms of our financing arrangements.
+Added: Our business may be impacted by natural disasters or future climate change.
+Added: Natural disasters, such as tornadoes and earthquakes, and possible future changes in climate could negatively impact our business and supply chain.
+Added: Our properties may be exposed to rare catastrophic weather events, such as severe storms and/or floods.
+Added: If the frequency of extreme weather events increases due to climate change, our exposure to these events could increase.
+Added: In countries that we rely on for operations and materials, such as Mexico and China, potential natural disasters or future climate changes could disrupt our manufacturing operations, reduce demand for our customers’
+Added: products and increase supply chain costs.
+Added: Legal and Regulatory Risks
+Added: We may not meet regulatory quality standards applicable to our manufacturing and quality processes which could have an adverse effect on our business.
+Added: We are registered with the FDA and are subject to periodic inspection by the FDA for compliance with its Quality System Regulation/Medical Device Good Manufacturing Practices requirements, which require manufacturers of medical devices to adhere to certain regulations, including testing, quality control and documentation procedures.
+Added: Also, our US facilities are ITAR compliant which is required for our manufacturing of defense related products.
+Added: Compliance with applicable regulatory requirements is subject to continual review and is rigorously monitored through periodic inspections and product field monitoring.
+Added: If any inspection reveals noncompliance with these regulations, it could adversely affect our operations.
+Added: Complying with securities laws, tax laws, accounting policies and regulations, and subsequent changes, may be costly for us and adversely affect our financial statements.
+Added: New or changing laws, regulations, policy and standards relating to corporate governance and public disclosure, including SEC and Nasdaq regulations, domestic or international tax legislation and the implementation of significant changes in the United States Generally Accepted Accounting Principles (“GAAP”), present challenges due to complexities, assumptions and judgements required to implement.
+Added: We apply judgments based on our understanding, interpretation and analysis of the relevant facts, circumstances, historical experience and valuations, as appropriate.
+Added: As a result, actual amounts could differ from those estimated at the time the financial statements are issued.
+Added: In addition, implementation may change the financial accounting or reporting standards that govern the preparation of our financial statements or authoritative entities could reverse their previous interpretations or positions on how various financial accounting or reporting standards should be applied.
+Added: These changes may be difficult to predict and implement and could materially or otherwise impact how we prepare and report our estimates, uncertainties, financial statements, operating results and financial condition.
+Added: Our efforts to comply with evolving laws, regulations, accounting policies and standards have resulted in, and are likely to continue to result in, increased general and administrative expenses and management time and attention from revenue-generating activities to compliance activities and may have an adverse effect on our financial statements, including cash flows.
+Added: Anti-Corruption and Trade Laws - We may incur costs and suffer damages if our employees, agents, or suppliers violate anti-bribery, anti-corruption or trade laws and regulations.
+Added: Laws and regulations related to bribery, corruption and trade, and enforcement thereof, are increasing in frequency, complexity and severity on a global basis.
+Added: The continued geographic expansion of our business into China and Mexico increases our exposure to, and cost of complying with, these laws and regulations.
+Added: If our internal controls and compliance program do not adequately prevent or deter our employees, agents, suppliers and other third parties with whom we do business from violating anti-corruption laws, we may incur defense costs, fines, penalties, reputational damage and business disruptions.
+Added: Non-compliance with environmental laws may result in restrictions and could adversely affect operations.
+Added: Our operations are regulated under a number of federal, state, and foreign environmental and safety laws and regulations that govern the discharge of hazardous materials into the air and water, as well as the handling, storage, and disposal of such materials.
+Added: These laws and regulations include the Clean Air Act;
+Added: the Clean Water Act;
+Added: the Resource Conservation and Recovery Act;
+Added: and the Comprehensive Environmental Response, Compensation, and Liability Act;
+Added: as well as similar federal, state and foreign laws.
+Added: Compliance with these environmental laws is a major consideration for us due to our manufacturing processes and materials.
+Added: It is possible we may be subject to potential financial liability for costs associated with the investigation and remediation at our sites;
+Added: this may have an adverse effect on operations.
+Added: We have not incurred significant costs related to compliance with environmental laws and regulations and we believe that our operations comply with all applicable environmental laws.
+Added: If we use hazardous materials in a manner that causes contamination or injury, we could be liable for resulting damages.
+Added: We are subject to Federal, State, and local laws, rules and regulations governing the use, discharge, storage, handling, and disposal of biological material, chemicals, and waste.
+Added: We cannot eliminate the risk of accidental contamination or injury to employees or third parties from the use, storage, handling, or disposal of these materials.
+Added: In the event of contamination or injury, we could be held liable for any resulting damages, remediation costs, and any related penalties or fines.
+Added: This liability could exceed our resources or any applicable insurance coverage we may have.
+Added: The cost of compliance with these laws and regulations may become significant, and our failure to comply may result in substantial fines or other consequences, and either could have a significant impact on our operating results.
Unresolved Staff Comments
1 unchanged sentence
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.