Universal Power Group (UPG)

          Disruption in our logistics centers may prevent us from meeting customer demand and our sales and profitability may suffer as a result.

          We manage our product distribution in the continental United States through our operations in Carrollton, Texas, and three regional logistics centers located in Oklahoma City, Columbus, Georgia and Las Vegas, Nevada. A serious disruption, such as earthquakes, tornados, floods, or fires, at any of our logistics centers could damage our inventory and could materially impair our ability to distribute our products to customers in a timely manner or at a reasonable cost. We could incur significantly higher costs and experience longer lead times associated with distributing our products to our customers during the time that it takes for us to reopen or replace a distribution center. As a result, any such disruption could have a material adverse effect on our business.

          Disruption
in our logistics centers may prevent us from meeting customer demand and our
sales and profitability may suffer as a result.

          We
manage our product distribution in the continental United States through our
operations in Carrollton, Texas, and three regional logistics centers located
in Oklahoma City, Columbus, Georgia and Las Vegas, Nevada. A serious
disruption, such as earthquakes, tornados, floods, or fires, at any of our logistics
centers could damage our inventory and could materially impair our ability to
distribute our products to customers in a timely manner or at a reasonable
cost. We could incur significantly higher costs and experience longer lead
times associated with distributing our products to our customers during the
time that it takes for us to reopen or replace a distribution center. As a
result, any such disruption could have a material adverse effect on our
business.

          As
part of our long-term growth strategy, we may undertake strategic acquisitions.
If we are unable to address the risks associated with these acquisitions our
business operations may be disrupted and our financial performance may be
impaired.

          Our
long-term growth strategy includes building or acquiring a manufacturing
facility. We also will consider acquiring other logistics companies or
distributors if we believe such an acquisition would expand or complement our
existing business. In pursuing acquisition opportunities, we may compete with
other companies having similar growth and investment strategies. Competition
for these acquisition targets could also result in increased acquisition costs
and a diminished pool of businesses, technologies, services or products
available for acquisition. Our long-term growth strategy could be impeded if we
fail to identify and acquire promising candidates on terms acceptable to us.
Assimilating acquired businesses involves a number of other risks, including,
but not limited to:

          For
all these reasons, our pursuit of an overall acquisition or any individual
acquisition could have a material adverse effect on our business, financial
condition and results of operations. If we are unable to successfully address
any of these risks, our business could be harmed.

          Rapid
growth in our business could strain our managerial, operational, financial,
accounting and information systems, customer service staff and office resources.
If we fail to manage our growth effectively, our business may be negatively
impacted.

          In
order to achieve our growth strategy, we will need to expand all aspects of our
business, including our computer systems and related infrastructure, customer
service capabilities and sales and marketing efforts. We cannot assure you that
our infrastructure, technical staff and technical resources will adequately
accommodate or facilitate our expanded operations. To be successful, we will
need to continually improve our financial and managerial controls, billing
systems, reporting systems and procedures, and we will also need to continue to
expand, train and manage our workforce. In addition, as we offer new products
and services, we will need to increase the size and expand the training of our
customer service staff to ensure that they can adequately respond to customer
inquiries. If we fail to adequately train our customer service staff and
provide staffing sufficient to support our new products and services, we may
lose customers.

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     We manage our product distribution in the continental United States through our operations in Carrollton, Texas, and two regional logistics centers, one in Oklahoma City and the other in Las Vegas. A serious disruption, such as earthquakes, tornados, floods, or fires, at any of our logistics centers could damage our inventory and could materially impair our ability to distribute our products to customers in a timely manner or at a reasonable cost. We could incur significantly higher costs and experience longer lead times associated with distributing our products to our customers during the time that it takes for us to reopen or replace a distribution center. As a result, any such disruption could have a material adverse effect on our business.