1324189--3/29/2006--Orchids_Paper_Products_CO

related topics

{condition, economic, financial}

{stock, price, operating}

{provision, law, control}

{cost, contract, operation}

{cost, regulation, environmental}

{stock, price, share}

{control, financial, internal}

{debt, indebtedness, cash}

{personnel, key, retain}

{cost, operation, labor}

We may experience cost overruns in and delays in the start up of our project to expand our paper mill. We have significant indebtedness which limits our free cash flow and subjects us to restrictive covenants relating to the operation of our business. The availability of and prices for energy will significantly impact our business. Our exposure to variable interest rates may affect our financial health. We depend on our management team to operate the Company and execute our business plan. We exclusively use preconsumer solid bleached sulfate paper, or SBS paper, to produce parent rolls and any disruption in our supply or cost of preconsumer SBS paper could disrupt our production and harm our ability to produce tissue at competitive prices. We purchase parent rolls on the open market and any disruption in supply or increase in cost of parent rolls could harm our ability to produce tissue at competitive prices. Labor interruptions would adversely affect our business. Our paper mill may experience shutdowns adversely affecting our financial position and results of operations. Our operations require substantial capital, and we may not have adequate capital resources to provide for all of our cash requirements. Our business is subject to extensive governmental regulations and any imposition of new regulations or failure to comply with existing regulations could involve significant additional expense. We incur significant costs as a result of operating as a public company. If we fail to maintain an effective system of internal controls, we may not be able to accurately report our financial results or prevent fraud and, as a result, our business could be harmed and current and potential stockholders could lose confidence in us, which could cause our stock price to fall. Risks Related To Our Common Stock We do not pay cash dividends on our capital stock, and we do not anticipate paying any cash dividends in the future. Our certificate of incorporation and bylaws, and Delaware law contain provisions that could discourage a takeover. Our future operating results may be below securities analysts or investors expectations, which could cause our stock price to decline. Our common stock has only been publicly traded for a short period of time, and we expect that the price of our common stock could fluctuate substantially, possibly resulting in class action securities litigation.

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1324189--3/29/2006--Orchids_Paper_Products_CO_/DE