Content analysis
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Legalese | ||
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H.S. sophomore Avg
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New words:
activity, belonging, building, choose, complex, cybersecurity, espionage, governmental, heighten, IL, internet, landscape, Lastly, malware, misuse, mobile, monitor, monitoring, phishing, physical, poor, power, ransomware, sensitive, suffered, targeted, telecommunication, terrorist, threat, transmit, uncoordinated, vulnerable, warranted
Removed:
addressed, advertising, Amendment, deductibility, doubtful, downgraded, limit, listing, mail, mailing, moved, OTC, OTCQB, Pink, Postage, postal, QTCQB, realize, Telephone, Updated
Financial report summary
?Risks
- We generally do not have long-term supply agreements or guaranteed price or delivery arrangements with the majority of our suppliers.
- Our supply agreements are generally terminable at the suppliers’ discretion.
- We generally do not have long-term sales contracts with our customers.
- We rely on third party suppliers for most of our products, and we may not be able to identify and procure relevant new products and products lines that satisfy our customers’ needs on favorable terms and prices, or at all.
- Increases in the costs of energy, shipping and raw materials used in our products could impact our cost of goods and distribution and occupancy expenses, which would result in lower operating margins.
- The unauthorized access to, or theft or destruction of, customer or employee personal, financial or other data or of our proprietary or confidential information that is stored in our information systems or by third parties on our behalf could impact our reputation and brand and expose us to potential liability and loss of revenues.
- We rely heavily on our internal information systems, which, if not properly functioning, could materially and adversely affect our business.
- We may not be able to attract and retain key personnel.
- The competitive pressures we face could have a material adverse effect on our business.
- Inclement weather and other disruptions to the transportation network could impact our distribution system.
- Our strategy of expanding into new geographic areas could be costly and may not expand our revenues.
- We may be unable to meet our goals regarding new office openings.
- Opening sales offices in new markets presents increased risks that may prevent us from being profitable in these new locations, and/or may adversely affect our operating results.
- Our ability to successfully attract and retain qualified sales personnel is uncertain.
- We have incurred significant losses in the past from trading in securities, and we may incur such losses in the future, which may also cause us to be in violation of covenants under our loan agreement.
- We may not have adequate or cost-effective liquidity or capital resources.
- We are exposed to foreign currency exchange rate risk, and changes in foreign exchange rates could increase our costs to procure products and impact our foreign sales.
- The Company’s Chairman and CEO holds almost all of our voting stock and can control the election of directors and significant corporate actions.
- Due to the small amount of public float in our common stock, sales of our common stock by Glen Ceiley could cause the price of our common stock to decline.
- Changes and uncertainties in the economy have harmed and could continue to harm our operating results.
- If we fail to maintain an effective system of internal controls over financial reporting or experience material weaknesses in our system of internal controls, we may not be able to report our financial results accurately or timely or detect fraud, which could have a material adverse effect on the market price of our common stock and our business.
Management Discussion
- Net sales consist primarily of sales of component parts and fasteners, but also include, to a lesser extent, kitting charges and special-order fees, as well as freight charged to customers.
- The increase in revenues in the three months ended February 29, 2024 (“Q2 2024”) as compared to the three months ended February 28, 2023 (“Q2 2023”) was largely due to an increased of the sales headcount by 43 employees, increasing from 370 sales employees to 413 sales employees for Q2 2023 and Q2 2024 respectively. Revenues and gross profit for Q2 2024 have increased when compared to Q2 2023 due to higher inventory stock available and sales activity filling the demand for those products.
- Selling, general and administrative expense (“SG&A”) consists primarily of payroll and related expenses for the Company’s sales and administrative staff, professional fees including accounting, legal and technology costs and expenses, and sales and marketing costs. SG&A in Q2 2024 increased from Q2 2023 largely due to increased employee headcount, increasing from 525 employees at Q2 2023 to 584 employees at Q2 2024.