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SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549







Amendment No. 1 to








FORM 10-Q/A




(Mark One)

|  |  |                                                                                                                                               
|- |  | ----------------------------------------------------------------------------------------------------------------------------------------------
|x |  | Quarterly report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended    March 31, 2003    or

|  |  |                                                                                                                                  
|- |  | ---------------------------------------------------------------------------------------------------------------------------------
|o |  | Transition report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the transition period from        to
|  |  |                                                                                                                                  
|  |  | Commission file number    1-12410                                                                                                

Simula, Inc.




(Exact Name of Registrant as Specified in Its Charter)


|                                                                        |  |                                                
|----------------------------------------------------------------------- |  | -----------------------------------------------
|Arizona
(State or Other Jurisdiction of 
Incorporation or Organization) |  | 86-0320129
(I.R.S. Employer
Identification No.)

|                                                                                                             |  |                 
|------------------------------------------------------------------------------------------------------------ |  | ----------------
|2625 S. Plaza Drive, Suite 100, Tempe, Arizona

                    (Address of Principal Executive Offices) |  | 85282
(Zip Code)

(602) 631-4005

(Registrants Telephone Number, Including Area Code)




---

(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)


Indicate by check mark whether the registrant:



|(1) |  | has filed all reports required to be filed by Section 13 or 15 (d) of
the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required
to file such reports)
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|    |   |    |  
|--- | - | -- | -
|Yes | x | No | o



|(2) |  | has been subject to such filing requirements for the past 90 days.
|--- |  | ------------------------------------------------------------------

|    |   |    |  
|--- | - | -- | -
|Yes | x | No | o

Indicate the number of shares outstanding of each of the issuers classes
of common stock, as of the
latest practicable date:

|                                  |  |                                        
|--------------------------------- |  | ---------------------------------------
|ClassCommon Stock, $.01 par value |  | Outstanding at March 31, 200313,014,395





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TABLE OF CONTENTS



|                            |                                                                                                |                                                                         |  |  |  |  |  | 
|--------------------------- | ---------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------- |  |  |  |  |  | 
|                            |                                                                                                | Consolidated Balance Sheets                                            
|                            |                                                                                                | Consolidated Statements of Operations                                  
|                            |                                                                                                | Consolidated Statements of Shareholders Deficit and Comprehensive Loss
|                            |                                                                                                | Consolidated Statements of Cash Flows                                  
|                            | Item 2. Managements Discussion and Analysis of Results of Operations and Financial Condition.
|                            | Item 3. Quantitative and Qualitative Disclosure about Market Risk                             
|                            | Item 4. Controls and Procedures                                                               
|PART II  OTHER INFORMATION
|                            | Item 6. Exhibits and Reports                                                                  
|SIGNATURES                 
|CERTIFICATIONS             
|EX-99.1                    
|EX-99.2                    



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##### Table of Contents



SIMULA, INC.

TABLE OF CONTENTS

|                                                                                                                                     |  |  |       | 
|------------------------------------------------------------------------------------------------------------------------------------ |  |  | ----- | 
|                                                                                                                                     |  |  | Page  | 
|PART I  FINANCIAL INFORMATION                                                                                                       |  |  |       | 
|Item 1  Interim Consolidated Financial Statements                                                                                   |  |  |       | 
|Consolidated Balance Sheets as of
March 31, 2003 (as restated) and December 31, 2002                                                 |  |  | 2     | 
|Consolidated Statements of Operations for the Three Month
Periods Ended March 31, 2003 (as restated) and 2002                        |  |  | 3     | 
|Consolidated
Statement of Shareholders Deficit and Comprehensive Loss for the
Three Month Period Ended March 31, 2003 (as restated) |  |  | 4     | 
|Consolidated Statements of Cash Flows for the
Three Month Periods Ended March 31, 2003 (as restated) and 2002                        |  |  | 5     | 
|Notes to Interim Consolidated Financial Statements                                                                                   |  |  | 610  | 
|Item 2  Managements Discussion and Analysis of
Results of Operations and Financial Condition                                       |  |  | 11-14 | 
|Item 3  Quantitative and Qualitative Disclosure about Market Risk                                                                   |  |  | 15    | 
|Item 4 Controls and Procedures                                                                                                      |  |  | 15    | 
|PART II - OTHER INFORMATION                                                                                                          |  |  |       | 
|Item 6  Exhibits and Reports                                                                                                        |  |  | 16    | 
|SIGNATURES                                                                                                                           |  |  | 17    | 

EXPLANATORY NOTE

This amendment
No. 1 on form 10-Q/A is being filed to give effect to the
restatement of the Companys unaudited interim consolidated
financial statements as of and for the three month period ended
March 31, 2003 as discussed in Note 13 to the unaudited
interim consolidated financial statements.





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SIMULA, INC. AND SUBSIDIARIES




Consolidated Balance Sheets
March 31, 2003 and December 31, 2002




|                                                     |                                                                                                                                                  |                             |            |                                       |             |      |            |             |             |  
|---------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------ | --------------------------- | ---------- | ------------------------------------- | ----------- | ---- | ---------- | ----------- | ----------- | -
|                                                     |                                                                                                                                                  |                             |            | 2003                                  |             | 2002
|                                                     |                                                                                                                                                  |                             |            |                                       |             |     
|                                                     |                                                                                                                                                  |                             |            | (unaudited)
(As restated
see Note 13) |             |      |            |            
|ASSETS                                               |                                                                                                                                                  |                             |            |                                       |             |      |            |            
|CURRENT ASSETS                                       |                                                                                                                                                  |                             |            |                                       |             |      |            |            
|                                                     | Cash and cash equivalents                                                                                                                        |                             | $          | 341,838                               |             |      | $          | 212,053     |            
|                                                     | Contract and trade receivables  Net (including costs and estimated
earnings in excess of billings of $14,393,111 and $14,216,255,
respectively) |                             |            | 32,021,838                            |             |      |            | 27,381,930  |            
|                                                     | Inventories                                                                                                                                      |                             |            | 5,125,320                             |             |      |            | 5,767,604   |            
|                                                     | Prepaid
expenses and other (See Note 13)                                                                                                         |                             |            | 1,528,276                             |             |      |            | 1,704,873   |            
|                                                     |                                                                                                                                                  |                             |            |                                       |             |      |            |             |            
|                                                     |                                                                                                                                                  | Total current assets        |            |                                       | 39,017,272  |      |            |             | 35,066,460  |  
|PROPERTY, EQUIPMENT, and LEASEHOLD IMPROVEMENTS -Net |                                                                                                                                                  |                             | 11,508,136 |                                       |             |      | 11,773,247 |            
|DEFERRED FINANCING COSTS                             |                                                                                                                                                  |                             | 1,863,111  |                                       |             |      | 2,419,054  |            
|INTANGIBLES  Net                                    |                                                                                                                                                  |                             | 3,565,492  |                                       |             |      | 3,534,478  |            
|OTHER ASSETS                                         |                                                                                                                                                  |                             | 2,121,826  |                                       |             |      | 2,086,245  |            
|                                                     |                                                                                                                                                  |                             |            |                                       |             |      |            |             |            
|TOTAL                                                |                                                                                                                                                  | $                           | 58,075,837 |                                       |             | $    | 54,879,484 |            
|                                                     |                                                                                                                                                  |                             |            |                                       |             |      |            |             |            
|LIABILITIES AND SHAREHOLDERS DEFICIT                |                                                                                                                                                  |                             |            |                                       |             |      |            |            
|CURRENT LIABILITIES                                  |                                                                                                                                                  |                             |            |                                       |             |      |            |            
|                                                     | Revolving line of credit                                                                                                                         |                             | $          | 15,391,876                            |             |      | $          | 11,283,393  |            
|                                                     | Trade accounts payable                                                                                                                           |                             |            | 7,721,777                             |             |      |            | 6,170,585   |            
|                                                     | Other accrued liabilities                                                                                                                        |                             |            | 8,594,817                             |             |      |            | 9,268,316   |            
|                                                     | Deferred revenue                                                                                                                                 |                             |            | 622,535                               |             |      |            | 898,503     |            
|                                                     | Accrued restructuring costs                                                                                                                      |                             |            | 1,145,473                             |             |      |            | 1,140,444   |            
|                                                     | Advances on contracts                                                                                                                            |                             |            | 542,988                               |             |      |            | 940,752     |            
|                                                     | Current portion of long-term debt                                                                                                                |                             |            | 30,387,391                            |             |      |            | 29,995,905  |            
|                                                     |                                                                                                                                                  |                             |            |                                       |             |      |            |             |            
|                                                     |                                                                                                                                                  | Total current liabilities   |            |                                       | 64,406,857  |      |            |             | 59,697,898  |  
|DEFERRED REVENUE                                     |                                                                                                                                                  |                             | 471,532    |                                       |             |      | 489,582    |            
|DEFERRED LEASE COST                                  |                                                                                                                                                  |                             | 905,154    |                                       |             |      | 807,156    |            
|LONG-TERM DEBT  Less current portion                |                                                                                                                                                  |                             | 32,260,852 |                                       |             |      | 32,313,087 |            
|                                                     |                                                                                                                                                  |                             |            |                                       |             |      |            |             |            
|                                                     |                                                                                                                                                  | Total liabilities           |            |                                       | 98,044,395  |      |            |             | 93,307,723  |  
|                                                     |                                                                                                                                                  |                             |            |                                       |             |      |            |             |            
|SHAREHOLDERS DEFICIT                                |                                                                                                                                                  |                             |            |                                       |             |      |            |            
|                                                     | Preferred stock, $.05 par value authorized 50,000,000 shares; none outstanding                                                                  |                             |            |                                       |             |      |            |             |            
|                                                     | Common stock, $.01 par value authorized 50,000,000 shares; issued 13,014,395 and 13,014,395, respectively                                       |                             |            | 130,144                               |             |      |            | 130,144     |            
|                                                     | Additional paid-in-capital                                                                                                                       |                             |            | 62,715,713                            |             |      |            | 62,715,713  |            
|                                                     | Accumulated deficit                                                                                                                              |                             |            | (98,734,478                           | )           |      |            | (97,412,584 | )          
|                                                     | Accumulated other comprehensive loss                                                                                                             |                             |            | (4,079,937                            | )           |      |            | (3,861,512  | )          
|                                                     |                                                                                                                                                  |                             |            |                                       |             |      |            |             |            
|                                                     |                                                                                                                                                  | Total shareholders deficit |            |                                       | (39,968,558 | )    |            |             | (38,428,239 | )
|                                                     |                                                                                                                                                  |                             |            |                                       |             |      |            |             |            
|TOTAL                                                |                                                                                                                                                  | $                           | 58,075,837 |                                       |             | $    | 54,879,484 |            
|                                                     |                                                                                                                                                  |                             |            |                                       |             |      |            |             |            







See notes to unaudited consolidated financial statements.




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##### Table of Contents



SIMULA, INC. AND SUBSIDIARIES




Unaudited Consolidated Statements
of Operations
Three Month Periods Ended March 31, 2003 and 2002




|                                         |  |                          |            |      |  |   |            |  
|---------------------------------------- |  | ------------------------ | ---------- | ---- |  | - | ---------- | -
|                                         |  | 2003                     |            | 2002
|                                         |  |                          |            |     
|                                         |  | (As
restatedsee Note 13) |            |     
|REVENUE                                  |  | $                        | 24,312,869 |      |  | $ | 29,102,288 |  
|COST OF REVENUE                          |  |                          | 17,003,106 |      |  |   | 19,491,597 |  
|                                         |  |                          |            |      |  |   |            |  
|GROSS MARGIN                             |  |                          | 7,309,763  |      |  |   | 9,610,691  |  
|ADMINISTRATIVE
EXPENSES (See Note 13)    |  |                          | 4,435,435  |      |  |   | 4,938,305  |  
|RESEARCH AND DEVELOPMENT                 |  |                          | 1,113,847  |      |  |   | 1,520,733  |  
|RESTRUCTURING CHARGES                    |  |                          | 300,831    |      |  |   |           |  
|                                         |  |                          |            |      |  |   |            |  
|OPERATING INCOME                         |  |                          | 1,459,650  |      |  |   | 3,151,653  |  
|INTEREST EXPENSE                         |  |                          | (2,671,619 | )    |  |   | (2,558,293 | )
|                                         |  |                          |            |      |  |   |            |  
|(LOSS) INCOME
BEFORE INCOME TAXES        |  |                          | (1,211,969 | )    |  |   | 593,360    |  
|INCOME TAX EXPENSE                       |  |                          | 109,925    |      |  |   | 220,000    |  
|                                         |  |                          |            |      |  |   |            |  
|NET (LOSS) INCOME                        |  | $                        | (1,321,894 | )    |  | $ | 373,360    |  
|                                         |  |                          |            |      |  |   |            |  
|(LOSS) INCOME PER COMMON SHARE  Basic   |  | $                        | (0.10      | )    |  | $ | 0.03       |  
|                                         |  |                          |            |      |  |   |            |  
|(LOSS) INCOME PER COMMON SHARE  Diluted |  | $                        | (0.10      | )    |  | $ | 0.03       |  
|                                         |  |                          |            |      |  |   |            |  







See notes to unaudited consolidated financial statements.




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SIMULA, INC. AND SUBSIDIARIES




Unaudited Consolidated Statements of Shareholders Deficit and Comprehensive Loss
Three Months Ended March 31, 2003




|                                                  |  |              |            |            |  |             |         |               |  |               |            |               |  |      |             |   |  |             |            |   |  |   |             |   |  |   |            |  
|------------------------------------------------- |  | ------------ | ---------- | ---------- |  | ----------- | ------- | ------------- |  | ------------- | ---------- | ------------- |  | ---- | ----------- | - |  | ----------- | ---------- | - |  | - | ----------- | - |  | - | ---------- | -
|                                                  |  |              |            |            |  |             |         |               |  |               |            |               |  |      |             |   |  | Accumulated |            |   |  |   |             |   |  |  
|                                                  |  | Common Stock |            | Additional |  |             |         |               |  | Other         |            | Total         |  |      |             |  
|                                                  |  |              |            | Paid-in    |  | Accumulated |         | Comprehensive |  | Shareholders |            | Comprehensive
|                                                  |  | Shares       |            | Amount     |  | Capital     |         | Deficit       |  | Loss          |            | Deficit       |  | Loss
|                                                  |  |              |            |            |  |             |         |               |  |               |            |               |  |     
|Balance,
January 1, 2003                          |  |              | 13,014,395 |            |  | $           | 130,144 |               |  | $             | 62,715,713 |               |  | $    | (97,412,584 | ) |  | $           | (3,861,512 | ) |  | $ | (38,428,239 | ) |  | $ |           |  
|Net
loss (As restated see Note 13)                |  |              |            |            |  |             |         |               |  |               |            |               |  |      | (1,321,894  | ) |  |             |            |   |  |   | (1,321,894  | ) |  |   | (1,321,894 | )
|Issuance of common shares                         |  |              |           |            |  |             |        |               |  |               |           |               |  |      |             |   |  |             |            |   |  |   |            |   |  |   |           |  
|Currency translation
adjustment                   |  |              |            |            |  |             |         |               |  |               |            |               |  |      |             |   |  |             | (218,425   | ) |  |   | (218,425    | ) |  |   | (218,425   | )
|                                                  |  |              |            |            |  |             |         |               |  |               |            |               |  |      |             |   |  |             |            |   |  |   |             |   |  |   |            |  
|Balance,
March 31, 2003 (As restated see Note 13) |  |              | 13,014,395 |            |  | $           | 130,144 |               |  | $             | 62,715,713 |               |  | $    | (98,734,478 | ) |  | $           | (4,079,937 | ) |  | $ | (39,968,558 | ) |  | $ | (1,540,319 | )
|                                                  |  |              |            |            |  |             |         |               |  |               |            |               |  |      |             |   |  |             |            |   |  |   |             |   |  |   |            |  







See notes to unaudited consolidated financial statements.




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SIMULA, INC. AND SUBSIDIARIES




Unaudited Consolidated Statements of Cash Flows
Three Month Periods Ended March 31, 2003 and 2002




|                                                     |                                                                                         |               |                                                  |                                           |           |                          |            |         |           |            |          |  
|---------------------------------------------------- | --------------------------------------------------------------------------------------- | ------------- | ------------------------------------------------ | ----------------------------------------- | --------- | ------------------------ | ---------- | ------- | --------- | ---------- | -------- | -
|                                                     |                                                                                         |               |                                                  |                                           |           | 2003                     |            | 2002   
|                                                     |                                                                                         |               |                                                  |                                           |           |                          |            |        
|                                                     |                                                                                         |               |                                                  |                                           |           | (As
restatedsee Note 13) |            |        
|CASH FLOWS FROM OPERATING ACTIVITIES:                |                                                                                         |               |                                                  |                                           |           |                          |            |        
|                                                     | Net (loss) income                                                                       |               | $                                                | (1,321,894                                | )         |                          | $          | 373,360 |          
|                                                     | Adjustment to reconcile net (loss) income to net cash provided by
operating activities: |               |                                                  |                                           |           |                          |            |         |          
|                                                     |                                                                                         |               | Depreciation and amortization                    |                                           |           | 1,198,741                |            |         |           | 1,056,159  |         
|                                                     |                                                                                         |               | Deferred income taxes                            |                                           |           |                         |            |         |           | 220,000    |         
|                                                     |                                                                                         |               | Capitalized interest                             |                                           |           | 392,817                  |            |         |           | 370,106    |         
|                                                     |                                                                                         |               | Loss on disposal of assets                       |                                           |           | 50,705                   |            |         |           |           |         
|                                                     |                                                                                         |               | Restructuring charge                             |                                           |           | 300,831                  |            |         |           |           |         
|                                                     |                                                                                         |               | Currency translation adjustment                  |                                           |           | (218,425                 | )          |         |           | (206,537   | )       
|                                                     |                                                                                         |               | Bad debt expense                                 |                                           |           | 1,952                    |            |         |           | 140,062    |         
|                                                     | Changes in net assets and liabilities:                                                  |               |                                                  |                                           |           |                          |            |         |          
|                                                     |                                                                                         |               | Contract and trade receivables  net of advances |                                           |           | (5,039,624               | )          |         |           | (855,909   | )       
|                                                     |                                                                                         |               | Inventories                                      |                                           |           | 642,284                  |            |         |           | (280,401   | )       
|                                                     |                                                                                         |               | Prepaid expenses and other                       |                                           |           | 176,597                  |            |         |           | 191,386    |         
|                                                     |                                                                                         |               | Other assets                                     |                                           |           | (35,581                  | )          |         |           | 232,462    |         
|                                                     |                                                                                         |               | Trade accounts payable                           |                                           |           | 1,551,192                |            |         |           | 834,801    |         
|                                                     |                                                                                         |               | Deferred revenue                                 |                                           |           | (294,018                 | )          |         |           | (632,669   | )       
|                                                     |                                                                                         |               | Deferred lease costs                             |                                           |           | 97,998                   |            |         |           | 81,373     |         
|                                                     |                                                                                         |               | Accrued
restructuring costs                      |                                           |           | (295,802                 | )          |         |           | (95,795    | )       
|                                                     |                                                                                         |               | Other accrued liabilities                        |                                           |           | (673,499                 | )          |         |           | (1,875,064 | )       
|                                                     |                                                                                         |               |                                                  |                                           |           |                          |            |         |          
|                                                     |                                                                                         |               |                                                  | Net cash used by operating activities     |           |                          | (3,465,726 | )       |           |            | (446,666 | )
|                                                     |                                                                                         |               |                                                  |                                           |           |                          |            |         |          
|CASH FLOWS FROM INVESTING ACTIVITIES:                |                                                                                         |               |                                                  |                                           |           |                          |            |        
|                                                     |                                                                                         |               | Purchase of property and equipment               |                                           |           | (344,019                 | )          |         |           | (432,660   | )       
|                                                     |                                                                                         |               | Costs incurred to obtain intangibles             |                                           |           | (115,387                 | )          |         |           | (74,378    | )       
|                                                     |                                                                                         |               |                                                  |                                           |           |                          |            |         |          
|                                                     |                                                                                         |               |                                                  | Net cash used in investing activities     |           |                          | (459,406   | )       |           |            | (507,038 | )
|                                                     |                                                                                         |               |                                                  |                                           |           |                          |            |         |          
|CASH FLOWS FROM FINANCING ACTIVITIES:                |                                                                                         |               |                                                  |                                           |           |                          |            |        
|                                                     |                                                                                         |               | Net borrowings under line of credit              |                                           |           | 4,108,483                |            |         |           | 1,174,136  |         
|                                                     |                                                                                         |               | Principal payments under other debt arrangements |                                           |           | (53,566                  | )          |         |           | (241,197   | )       
|                                                     |                                                                                         |               |                                                  |                                           |           |                          |            |         |          
|                                                     |                                                                                         |               |                                                  | Net cash provided by financing activities |           |                          | 4,054,917  |         |           |            | 932,939  |  
|                                                     |                                                                                         |               |                                                  |                                           |           |                          |            |         |          
|NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS |                                                                                         |               | 129,785                                          |                                           |           |                          | (20,765    | )      
|CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD       |                                                                                         |               | 212,053                                          |                                           |           |                          | 362,319    |        
|                                                     |                                                                                         |               |                                                  |                                           |           |                          |            |         |          
|CASH AND CASH EQUIVALENTS, END OF PERIOD             |                                                                                         | $             | 341,838                                          |                                           |           | $                        | 341,554    |        
|                                                     |                                                                                         |               |                                                  |                                           |           |                          |            |         |          
|SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:    |                                                                                         |               |                                                  |                                           |           |                          |            |        
|                                                     |                                                                                         | Interest Paid |                                                  | $                                         | 1,813,133 |                          |            | $       | 2,376,960 |           
|                                                     |                                                                                         |               |                                                  |                                           |           |                          |            |         |          
|                                                     |                                                                                         | Taxes Paid    |                                                  | $                                         | 76,668    |                          |            | $       | 192,454   |           
|                                                     |                                                                                         |               |                                                  |                                           |           |                          |            |         |          







See notes to unaudited consolidated financial statements.




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Note 1 - Basis of Presentation

The consolidated financial statements include the accounts of Simula, Inc.
and its subsidiaries (collectively we and our). All of the subsidiaries
are wholly owned. All intercompany transactions are eliminated in
consolidation.




The
accompanying unaudited consolidated financial statements have been
prepared on a going concern basis, which contemplates the realization
of assets and the satisfaction of liabilities in the normal course of
business. As noted in the accompanying financial statements, current
maturities of debt are approximately $45,800,000 million as of
March 31, 2003 and there is uncertainty relating to the Companys ability to refinance certain of its debt. These factors, among others, indicate that the Company may be unable to continue as a going concern. The accompanying financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
In order to meet future quarterly covenants and current and long-term debt maturities, we will need asset sales proceeds, refinancing or recapitalization transactions, or the sale or merger of the Company.




We have prepared the accompanying interim consolidated financial
statements in accordance with Generally Accepted Accounting
Principles in the United States of America (GAAP)
for interim financial information and with the instructions to Form 10-Q.
Accordingly, they do not include all of the information and notes required by
GAAP for complete financial statements. In the opinion of management, all
adjustments and reclassifications considered necessary for a fair and
comparable presentation have been included and are of a normal recurring
nature. Operating results for the three months ended March 31, 2003 are not
necessarily indicative of the results that may be expected for the year ending
December 31, 2003. Such interim financial statements should be read in
conjunction with our consolidated financial statements and notes thereto
included in our 2002 Form 10-K.

Note 2  Recently Issued Accounting Standards

In April 2002, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standard (SFAS) No. 145, Rescission of
FASB Statements No. 4, 44 and 64, amendment of FASB Statement
No. 13, and
Technical Corrections, which, among other things, no longer allows for the
classification of gains and losses from extinguishment of debt as
extraordinary. We adopted SFAS No. 145 effective January 1, 2003 and upon
adoption, gains and losses on certain future debt extinguishment, if any, will
be recorded in pre-tax income. In addition any previously recorded
extraordinary gains or losses from early extinguishment of debt will be
reclassified to income before extraordinary income or loss to conform to the
requirements under SFAS 145.

In June 2002, the FASB issued SFAS No. 146, Accounting for Costs
Associated with Exit or Disposal Activities,which addresses financial
accounting and reporting for costs associated with exit or disposal activities.
SFAS No. 146 also nullifies Emerging Issues Task Force (EITF) No. 94-3,
Liability Recognition for Certain Employee Termination Benefits and Other
Costs to Exit an Activity (including Certain Costs Incurred in a
Restructuring). SFAS No. 146 is effective for exit or disposal activities
initiated after December 31, 2002. We adopted SFAS No. 146 effective January
1, 2003 and do not anticipate that the new standard will have a material impact
on our financial position or results of operations.

In December 2002, the FASB issued SFAS No. 148, Accounting for
Stock-Based CompensationTransition and Disclosure. This Statement amends
SFAS No. 123 to provide alternative methods of transition for a voluntary
change to the fair value method of accounting for stock-based employee
compensation. We adopted the new disclosure requirements of SFAS No. 148 in
2002. We continue to account for stock-based compensation under the
recognition and measurement principles of Accounting Principles Board (APB)
Opinion No. 25, Accounting for Stock Issued to Employees,and related
Interpretations.

In
November 2002, the FASB issued Interpretation (FIN)
No. 45, Guarantors Accounting and Disclosure
Requirements for Guarantees, Including Indirect Guarantees of
Indebtedness of Others. The interpretation requires a guarantor
to recognize, at the inception of a guarantee, a liability for the
fair value of the obligation undertaken in issuing the guarantee and
expands the disclosures required. Initial recognition and
measurement provisions of FIN No. 45 are applicable on a
prospective basis to guarantees issued or modified after
December 31, 2002, consequently, the adoption of FIN
No. 45 had no effect on our financial position, results of
operations or cash flows. We believe our current accounting policies
are consistent with the interpretation.




In
January 2003, the FASB issued FIN No. 46,
Consolidation of Variable Interest Entities  an
Interpretation of ARB No. 51, FIN No. 46 clarifies
the consolidation requirements of variable interest entities. We have
adopted the interpretation. We have no interests in unconsolidated
variable interest entities and, consequently, adoption of FIN
No. 46 had no effect on our financial position, results of
operations or cash flows.




Note 3 - Earnings per share

The following is a reconciliation of the numerators and denominators of
basic and diluted per share computations. For the three month period ended
March 31, 2003 the effect of 163,618 shares related to stock options were not
used in determining dilutive earnings per share because the result would have
been anti-dilutive. Additionally, for the three month periods ended March 31,
2003 and 2002, the effect of 1,774,074 shares to be issued upon conversion of
the 8% Senior Subordinated Convertible Notes was not used in determining
dilutive earnings per share because the result would have been anti-dilutive.




|                                                     |  |                              |            |      |  |   |            | 
|---------------------------------------------------- |  | ---------------------------- | ---------- | ---- |  | - | ---------- | 
|                                                     |  | Three Months Ended March 31,
|                                                     |  |                             
|                                                     |  | 2003                         |            | 2002
|                                                     |  |                              |            |     
|                                                     |  | (As
restatedsee Note 13)     |            |     
|Net (loss) earnings available to common shareholders |  | $                            | (1,321,894 | )    |  | $ | 373,360    | 
|                                                     |  |                              |            |      |  |   |            | 
|Basic weighted average shares outstanding            |  |                              | 13,014,395 |      |  |   | 12,892,858 | 
|Effect of dilutive securities                        |  |                              |           |      |  |   | 287,727    | 
|                                                     |  |                              |            |      |  |   |            | 
|Diluted weighted average shares outstanding          |  |                              | 13,014,395 |      |  |   | 13,180,585 | 
|                                                     |  |                              |            |      |  |   |            | 
|(Loss) earnings per common share basic and diluted: |  | $                            | (0.10      | )    |  | $ | 0.03       | 
|                                                     |  |                              |            |      |  |   |            | 




6



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##### Table of Contents



Note 4  Stock Based Compensation




We have three stock-based employee compensation plans. We account for
those plans under the recognition and measurement principles of APB Opinion No.
25, Accounting for Stock Issued to Employees,and related Interpretations
under which no compensation cost has been recognized. However, we have
computed compensation cost, for pro forma disclosure purposes, based on the fair
value of all options awarded on the date of grant, utilizing the Black-Scholes
option pricing method. The following table illustrates the effect on
net
(loss) income and (loss) income per share if we had applied the fair value recognition
provisions of FASB Statement No. 123, Accounting for Stock-Based
Compensation,to stock-based employee compensation for the three month periods
ended March 31:







|                                                                                                                |  |                          |            |      |  |   |            |  
|--------------------------------------------------------------------------------------------------------------- |  | ------------------------ | ---------- | ---- |  | - | ---------- | -
|                                                                                                                |  | 2003                     |            | 2002
|                                                                                                                |  |                          |            |     
|                                                                                                                |  | (As
restatedsee Note 13) |            |     
|Net (loss) income  as reported                                                                                 |  | $                        | (1,321,894 | )    |  | $ | 373,360    |  
|                                                                                                                |  |                          |            |      |  |   |            |  
|Deduct: Total stock based employee compensation
expense determined under fair value based
method for all awards |  |                          | (318,254   | )    |  |   | (1,529,075 | )
|                                                                                                                |  |                          |            |      |  |   |            |  
|Net loss  pro forma                                                                                            |  | $                        | (1,640,148 | )    |  | $ | (1,155,715 | )
|                                                                                                                |  |                          |            |      |  |   |            |  
|(Loss) income per share: basic and diluted as reported                                                          |  | $                        | (0.10      | )    |  | $ | 0.03       |  
|                                                                                                                |  |                          |            |      |  |   |            |  
|Loss per share  basic and diluted  pro forma                                                                  |  | $                        | (0.13      | )    |  | $ | (0.09      | )
|                                                                                                                |  |                          |            |      |  |   |            |  




The fair value of each option grant is estimated on the date of grant
using the Black-Scholes options pricing model and the following table
illustrates the assumptions used for grants for the three month periods ended
March 31,:

|                        |  |      |      |      |  |  |      |  
|----------------------- |  | ---- | ---- | ---- |  |  | ---- | -
|                        |  | 2003 |      | 2002
|                        |  |      |      |     
|Dividend yield          |  | None |      | None
|Expected volatility     |  |      | 116  | %    |  |  | 93   | %
|Risk-free interest rate |  |      | 3.6  | %    |  |  | 3.6  | %
|Expected lives          |  |      | 3.25 |      |  |  | 3.25 |  

Note 5 - Inventories

At March 31, 2003 and December 31, 2002, inventories consisted of the
following:

|                  |                   |   |           |           |      |   |           |           | 
|----------------- | ----------------- | - | --------- | --------- | ---- | - | --------- | --------- | 
|                  |                   |   | 2003      |           | 2002
|                  |                   |   |           |           |     
|Raw Materials     |                   | $ | 3,608,836 |           |      | $ | 4,420,174 |          
|Work in Progress  |                   |   | 712,201   |           |      |   | 774,822   |          
|Finished Goods    |                   |   | 1,106,232 |           |      |   | 844,557   |          
|Inventory Reserve |                   |   | (301,949  | )         |      |   | (271,949  | )        
|                  |                   |   |           |           |      |   |           |          
|                  | Total Inventories |   | $         | 5,125,320 |      |   | $         | 5,767,604 | 
|                  |                   |   |           |           |      |   |           |          

Note 6  Property, Equipment and Leasehold Improvements



| |                                                                                                                   
| | ------------------------------------------------------------------------------------------------------------------
| | At March 31, 2003 and December 31, 2002 property, equipment and leasehold
improvements consisted of the following:

|                                               |                                                      |   |             |            |      |   |             |            | 
|---------------------------------------------- | ---------------------------------------------------- | - | ----------- | ---------- | ---- | - | ----------- | ---------- | 
|                                               |                                                      |   | 2003        |            | 2002
|                                               |                                                      |   |             |            |     
|Land                                           |                                                      | $ | 816,888     |            |      | $ | 816,888     |           
|Buildings and leasehold improvements           |                                                      |   | 4,543,048   |            |      |   | 4,593,765   |           
|Equipment                                      |                                                      |   | 20,109,535  |            |      |   | 20,508,363  |           
|                                               |                                                      |   |             |            |      |   |             |           
|Total                                          |                                                      |   | 25,469,471  |            |      |   | 25,919,016  |           
|Less accumulated depreciation and amortization |                                                      |   | (13,961,335 | )          |      |   | (14,145,769 | )         
|                                               |                                                      |   |             |            |      |   |             |           
|                                               | Property, equipment and leasehold improvements - net |   | $           | 11,508,136 |      |   | $           | 11,773,247 | 
|                                               |                                                      |   |             |            |      |   |             |           

7



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##### Table of Contents



Note 7  Debt




On March 31, 2003, we were not in compliance with certain non-monetary
financial covenants under our Revolving Line of Credit (the
RLC). On May 13,
2003, we received a waiver of this non-compliance at March 31, 2003. Our RLC had
outstanding borrowings of $15.4 million and remaining borrowing availability of
$1.6 million at March 31, 2003 as compared to outstanding borrowings of $11.3
million and a remaining borrowing availability of $1.3 million at December 31,
2002.




Note 8  Other Intangible Assets

All of our intangible assets with finite lives ranging from 15 to 20 years
were principally comprised of technology patents with a total cost at March 31,
2003 and December 31, 2002 as follows:

|                              |                   |   |           |           |      |   |            |           | 
|----------------------------- | ----------------- | - | --------- | --------- | ---- | - | ---------- | --------- | 
|                              |                   |   | 2003      |           | 2002
|                              |                   |   |           |           |     
|Patents and licenses          |                   | $ | 4,286,106 |           |      | $ | 4,194,603  |          
|Other                         |                   |   | 132,669   |           |      |   | 566,010    |          
|                              |                   |   |           |           |      |   |            |          
|Total                         |                   |   | 4,418,775 |           |      |   | 4,760,613  |          
|Less accumulated amortization |                   |   | (853,283  | )         |      |   | (1,226,135 | )        
|                              |                   |   |           |           |      |   |            |          
|                              | Intangibles  net |   | $         | 3,565,492 |      |   | $          | 3,534,478 | 
|                              |                   |   |           |           |      |   |            |          

Intangible asset amortization expense for the three month periods ended March
31, 2003 and 2002 were approximately $60,500 and $74,000, respectively.
Estimated amortization expense for the five succeeding fiscal years is as
follows:

|     |  |   |         | 
|---- |  | - | ------- | 
|2003 |  | $ | 220,000 | 
|2004 |  |   | 280,000 | 
|2005 |  |   | 280,000 | 
|2006 |  |   | 280,000 | 
|2007 |  |   | 280,000 | 

Note 9  Research and Development

Our research and development efforts arise from funded development
contracts and proprietary research and development. Amounts arising from such
efforts for the three moths ended March 31, were as follows:

|                                  |                                                                      |   |           |          |      |   |           |           |  
|--------------------------------- | -------------------------------------------------------------------- | - | --------- | -------- | ---- | - | --------- | --------- | -
|                                  |                                                                      |   | 2003      |          | 2002
|                                  |                                                                      |   |           |          |     
|Research and development expenses |                                                                      | $ | 1,113,847 |          |      | $ | 1,520,733 |          
|                                  |                                                                      |   |           |          |      |   |           |          
|Funded contracts:                 |                                                                      |   |           |          |      |   |           |          
|                                  | Revenue funded by customers                                          |   | $         | 290,651  |      |   | $         | 1,061,504 |  
|                                  | Research and development expenses classified as cost of such
Revenue |   |           | (167,779 | )    |   |           | (777,789  | )
|                                  |                                                                      |   |           |          |      |   |           |          
|                                  | Income on funded contracts                                           |   | $         | 122,872  |      |   | $         | 283,715   |  
|                                  |                                                                      |   |           |          |      |   |           |          

Note 10 - Restructuring




In December 1999, we adopted a plan of restructuring that included the
divestiture of our commercial airline seat manufacturing operation. In July
2002, we adopted a plan of restructuring focused on reducing workforce to align
with a newly developed strategic focus and in January 2003, we adopted a plan
to restructure our Aerospace and Defense business by reducing workforce and
closing our Asheville facility and consolidating those operations into our
Phoenix facility. At March 31, 2003, there was $1,145,473 of remaining
liability, which principally relates to lease obligations associated with the
closed airline facility, which run through May of 2008 and other contracts as a part of the 1999 restructuring
and severance obligations as part of the 2002 and 2003 restructuring, which are expected to be fully paid by December of 2004. A
summary of the change in accrued restructuring is as follows:




8



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##### Table of Contents



|                                                       |  |          |         |           |  |           |          |       |  |   |          |   |  |   |           |  
|------------------------------------------------------ |  | -------- | ------- | --------- |  | --------- | -------- | ----- |  | - | -------- | - |  | - | --------- | -
|                                                       |  | Facility |         | Other     |  |           |          |       |  |   |          |  
|                                                       |  | Closure  |         | Contracts |  | Severance |          | Total
|                                                       |  |          |         |           |  |           |          |      
|Balance at December 31, 2002                           |  | $        | 535,285 |           |  | $         | 331,941  |       |  | $ | 273,218  |   |  | $ | 1,140,444 |  
|First quarter 2003 Aerospace
and Defense restructuring |  |          |        |           |  |           |         |       |  |   | 300,831  |   |  |   | 300,831   |  
|Reclassification of charges                            |  |          | 294,279 |           |  |           | (294,279 | )     |  |   |         |   |  |   |          |  
|Cash payments                                          |  |          | (48,064 | )         |  |           | (2,040   | )     |  |   | (245,698 | ) |  |   | (295,802  | )
|                                                       |  |          |         |           |  |           |          |       |  |   |          |   |  |   |           |  
|Balance at March 31, 2003                              |  | $        | 781,500 |           |  | $         | 35,622   |       |  | $ | 328,351  |   |  | $ | 1,145,473 |  
|                                                       |  |          |         |           |  |           |          |       |  |   |          |   |  |   |           |  

Note 11  Derivative Instruments

We have certain receivables and payables denominated in Euros. To
eliminate our exposure to changes in the U.S. dollar/Euro exchange rate, we
periodically enter into forward contracts to protect our future cash flows. Our
forward contracts generally range from one to three months in original
maturity.

In accordance with SFAS No. 133, we designate such forward contracts as
cash flow hedges. We account for changes in the fair value of our forward
contracts, based on changes in the forward exchange rate, with all such changes
in fair value reported in other comprehensive income. Amounts in other
comprehensive income are reclassified into earnings upon settlement of the
forward contract at an amount that will offset the related transaction gain or
loss arising from the re-measurement and adjust earnings for the cost of the
forward contracts. As of March 31, 2003, there were no significant gains or
losses recognized in earnings for hedge ineffectiveness and we did not
discontinue any hedges because it was probable that the original forecasted
transaction would not occur. We have no open hedging contracts as of March 31,
2003.




Note 12  Segment Reporting




We are a holding company for wholly owned subsidiaries, which operate in
two primary business segments. Our Aerospace and Defense segment includes
operations that design and manufacture crash resistant components, energy
absorbing devices, and ballistic armor products which are sold principally to
branches of the United States armed forces. Our Commercial Products segment
includes operations encompassing inflatable restraints and related technology
for automobiles, products derived from our proprietary technology and polymer
materials. All other activity, included in Other, represents general corporate
operations, including unallocated interest and technology sales and royalties.




For the three-month periods ended March 31, 2003 and 2002, inter-segment
sales were insignificant and total intercompany sales of $139,615 and $34,535,
respectively, have been eliminated. For the three-month periods ended
March 31, 2003 and 2002, sales to the branches of the United
States Armed Forces were 88% and 66%, respectively, of total sales.







|                        |                                |                           |            |             |   |            |           |                           |           |                           |          |         |   |   |            |            |           | 
|----------------------- | ------------------------------ | ------------------------- | ---------- | ----------- | - | ---------- | --------- | ------------------------- | --------- | ------------------------- | -------- | ------- | - | - | ---------- | ---------- | --------- | 
|                        |                                |                           |            | 2003       
|                        |                                |                           |            |            
|                        |                                |                           |            | Aerospace   |   | Commercial |           |                           |           |                           |          |         |   |  
|                        |                                |                           |            | and Defense |   | Products   |           | Other                     |           | Total                    
|                        |                                |                           |            |             |   |            |           |                           |           |                          
|                        |                                |                           |            |             |   |            |           | (As
restated
see Note 13) |           | (As
restated
see Note 13)
|Revenue:                |                                |                           |            |             |   |            |           |                           |           |                           |          |         |   |   |            |           
|                        | Contract revenue               |                           | $          | 15,039,585  |   |            | $         |                          |           |                           | $        |        |   |   | $          | 15,039,585 |          
|                        | Product sales:                 |                           |            |             |   |            |           |                           |           |                           |          |         |   |   |            |            |          
|                        |                                | Automotive safety systems |            |             |  |            |           |                           | 8,832,784 |                           |          |         |  |   |            |            | 8,832,784 | 
|                        |                                | Other                     |            |             |  |            |           |                           | 3,909     |                           |          |         |  |   |            |            | 3,909     | 
|                        | Technology sales and royalties |                           |            |            |   |            |           | 275,667                   |           |                           |          | 160,924 |   |   |            | 436,591    |          
|                        |                                |                           |            |             |   |            |           |                           |           |                           |          |         |   |   |            |            |          
|Total revenue           |                                | $                         | 15,039,585 |             |   | $          | 9,112,360 |                           |           | $                         | 160,924  |         |   | $ | 24,312,869 |           
|                        |                                |                           |            |             |   |            |           |                           |           |                           |          |         |   |   |            |            |          
|Operating income (loss) |                                | $                         | 1,944,290  |             |   | $          | 253,769   |                           |           | $                         | (738,409 | )       |   | $ | 1,459,650  |           




9



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##### Table of Contents



|                        |                                |                           |            |             |   |            |           |         |           |       |         |         |   |   |            |            |           | 
|----------------------- | ------------------------------ | ------------------------- | ---------- | ----------- | - | ---------- | --------- | ------- | --------- | ----- | ------- | ------- | - | - | ---------- | ---------- | --------- | 
|                        |                                |                           |            | 2002       
|                        |                                |                           |            |            
|                        |                                |                           |            | Aerospace   |   | Commercial |           |         |           |       |         |         |   |  
|                        |                                |                           |            | and Defense |   | Products   |           | Other   |           | Total
|                        |                                |                           |            |             |   |            |           |         |           |       |         |         |   |   |            |            |          
|Revenue:                |                                |                           |            |             |   |            |           |         |           |       |         |         |   |   |            |           
|                        | Contract revenue               |                           | $          | 19,293,239  |   |            | $         |        |           |       | $       |        |   |   | $          | 19,293,239 |          
|                        | Product sales:                 |                           |            |             |   |            |           |         |           |       |         |         |   |   |            |            |          
|                        |                                | Automotive safety systems |            |             |  |            |           |         | 9,028,163 |       |         |         |  |   |            |            | 9,028,163 | 
|                        |                                | Other                     |            |             |  |            |           |         | 102,765   |       |         |         |  |   |            |            | 102,765   | 
|                        | Technology sales and royalties |                           |            |            |   |            |           | 290,494 |           |       |         | 387,627 |   |   |            | 678,121    |          
|                        |                                |                           |            |             |   |            |           |         |           |       |         |         |   |   |            |            |          
|Total revenue           |                                | $                         | 19,293,239 |             |   | $          | 9,421,422 |         |           | $     | 387,627 |         |   | $ | 29,102,288 |           
|                        |                                |                           |            |             |   |            |           |         |           |       |         |         |   |   |            |            |          
|Operating income (loss) |                                | $                         | 3,514,075  |             |   | $          | (290,198  | )       |           | $     | (72,224 | )       |   | $ | 3,151,653  |           










Note 13 
Restatement:

Subsequent to the issuance of the Companys
 unaudited consolidated financial statements for the quarter ended
March 31, 2003, the Company determined that certain costs
of the sale of the automotive safety business and the potential
sale of the remainder Company were incorrectly capitalized as
Prepaid Expenses and Other on the balance sheet. These costs
include legal and other fees related to these proposed
transactions, that had been incurred by the Company and should
have been recorded as expense as incurred. The Prepaid Expense and
Other amount in the balance sheet at March 31, 2003 has
been restated to expense the capitalized amount of $144,057. The
statements of operations and cashflows for the three months
ended March 31, 2003 have also been restated to reflect the
expensing of the $144,057 previously capitalized. A summary of the
significant effects of the restatement are as follows:







As of March 31, 2003







|                                            |  |                        |             |             |  |   |             |  
|------------------------------------------- |  | ---------------------- | ----------- | ----------- |  | - | ----------- | -
|                                            |  | As Previously Reported |             | As Restated
|                                            |  |                        |             |            
|Prepaid expenses and other                  |  | $                      | 1,672,333   |             |  | $ | 1,528,276   |  
|Total current assets                        |  |                        | 39,161,329  |             |  |   | 39,017,272  |  
|Total assets                                |  |                        | 58,219,894  |             |  |   | 58,075,837  |  
|Accumulated deficit                         |  |                        | (98,590,421 | )           |  |   | (98,734,478 | )
|Total shareholders deficit                 |  |                        | (39,824,501 | )           |  |   | (39,968,558 | )
|Total liabilities and shareholders deficit |  |                        | 58,219,894  |             |  |   | 58,075,837  |  







For the Three Month Period Ended

March 31, 2003








|                                  |  |                        |            |             |  |   |            |  
|--------------------------------- |  | ---------------------- | ---------- | ----------- |  | - | ---------- | -
|                                  |  | As Previously Reported |            | As Restated
|                                  |  |                        |            |            
|Administrative Expenses           |  | $                      | 4,291,378  |             |  | $ | 4,435,435  |  
|Operating Income                  |  |                        | 1,603,707  |             |  |   | 1,459,650  |  
|Loss Before Taxes                 |  |                        | (1,067,912 | )           |  |   | (1,211,969 | )
|Net Loss                          |  |                        | (1,177,837 | )           |  |   | (1,321,894 | )
|(Loss) per common share  basic   |  | $                      | (.09       | )           |  | $ | (.10       | )
|(Loss) per common share  diluted |  | $                      | (.09       | )           |  | $ | (.10       | )




10



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##### Table of Contents






Item 2. Managements Discussion and Analysis of Results of Operations and Financial Condition.

The following managements discussion and
analysis gives effect to the restatement discussed in Note 13 of
the unaudited consolidated financial statements.

Results of Operations

Three Month Period Ended March 31, 2003 Compared to
Three Month Period Ended March 31, 2002

CONSOLIDATED




|                                                                                |  |                           |        |      |  |                           |        |                           |  |   |       |  |  |  |      |   
|------------------------------------------------------------------------------- |  | ------------------------- | ------ | ---- |  | ------------------------- | ------ | ------------------------- |  | - | ----- |  |  |  | ---- | --
|                                                                                |  |                           |        |      |  |                           |        |                           |  |  
|                                                                                |  | Three Months Ended        |        |      |  |                           |        |                           |  |  
|                                                                                |  | March 31,                 |        |      |  |                           |        |                           |  |  
|                                                                                |  |                           |        |      |  |                           |        | Percent                  
|(In thousands)                                                                  |  | 2003                      |        | 2002 |  | Change                    |        | Inc (Dec)                
|                                                                                |  |                           |        |      |  |                           |        |                          
|                                                                                |  | (As
restated
See Note 13) |        |      |  | (As
restated
See Note 13) |        | (As
restated
See Note 13)
|Revenue                                                                         |  | $                         | 24,313 |      |  | $                         | 29,102 |                           |  | $ | 4,789 |  |  |  | (16  | %)
|Gross margin                                                                    |  |                           | 7,310  |      |  |                           | 9,611  |                           |  |   | 2,301 |  |  |  | (24  | %)
|Administrative and research
and development expense                             |  |                           | 5,549  |      |  |                           | 6,459  |                           |  |   | 910   |  |  |  | (14  | %)
|Operating income                                                                |  |                           | 1,460  |      |  |                           | 3,152  |                           |  |   | 1,692 |  |  |  | (54  | %)
|Interest expense, net                                                           |  |                           | 2,672  |      |  |                           | 2,558  |                           |  |   | 114   |  |  |  | 4    | % 
|(Loss)
income before income tax                                                 |  |                           | (1,212 | )    |  |                           | 593    |                           |  |   | 1,805 |  |  |  | (304 | %)
|Income
tax expense                                                              |  |                           | 110    |      |  |                           | 220    |                           |  |   | 110   |  |  |  | (50  | %)
|Gross margin as a percentage of revenue                                         |  |                           | 30     | %    |  |                           | 33     | %                         |  |   |       |  |  |  |      |   
|Administrative and research and
development
expenses as a percentage of revenue |  |                           | 23     | %    |  |                           | 22     | %                         |  |   |       |  |  |  |      |   




AEROSPACE & DEFENSE

|                                        |  |                    |        |      |  |        |        |           |  |   |       |  |  |  |     |   
|--------------------------------------- |  | ------------------ | ------ | ---- |  | ------ | ------ | --------- |  | - | ----- |  |  |  | --- | --
|                                        |  |                    |        |      |  |        |        |           |  |  
|                                        |  | Three
Months Ended |        |      |  |        |        |           |  |  
|                                        |  | March 31,          |        |      |  |        |        |           |  |  
|                                        |  |                    |        |      |  |        |        | Percent  
|(In thousands)                          |  | 2003               |        | 2002 |  | Change |        | Inc (Dec)
|                                        |  |                    |        |      |  |        |        |          
|Revenue                                 |  | $                  | 15,040 |      |  | $      | 19,293 |           |  | $ | 4,253 |  |  |  | (22 | %)
|Gross margin                            |  |                    | 5,354  |      |  |        | 6,711  |           |  |   | 1,357 |  |  |  | (20 | %)
|Gross margin as a percentage of revenue |  |                    | 36     | %    |  |        | 35     | %         |  |   |       |  |  |  |     |   

COMMERCIAL PRODUCTS

|                                        |  |                    |       |      |  |        |       |           |  |   |     |  |  |  |     |   
|--------------------------------------- |  | ------------------ | ----- | ---- |  | ------ | ----- | --------- |  | - | --- |  |  |  | --- | --
|                                        |  |                    |       |      |  |        |       |           |  |  
|                                        |  | Three Months Ended |       |      |  |        |       |           |  |  
|                                        |  | March 31,          |       |      |  |        |       |           |  |  
|                                        |  |                    |       |      |  |        |       | Percent  
|(In thousands)                          |  | 2003               |       | 2002 |  | Change |       | Inc (Dec)
|                                        |  |                    |       |      |  |        |       |          
|Revenue                                 |  | $                  | 9,112 |      |  | $      | 9,421 |           |  | $ | 309 |  |  |  | (3  | %)
|Gross margin                            |  |                    | 1,795 |      |  |        | 2,512 |           |  |   | 717 |  |  |  | (29 | %)
|Gross margin as a percentage of revenue |  |                    | 20    | %    |  |        | 27    | %         |  |   |     |  |  |  |     |   

Results of Operations for the Three-Month Period Ended March 31, 2003

Revenue for the three-month period ended March 31, 2003 decreased 16% compared
to revenue in the same period for 2002. Revenue for the period declined 22% in
the Aerospace and Defense segment primarily due to timing of orders
and delays for funding of various programs. In the first quarter of 2003
Small Arms Protective Inserts (SAPI) body armor revenue grew compared to the
same period in 2002 however production revenues and profitability were
negatively impacted as we completed the SAPI body armor design validation for
rework announced in November of 2002. We resumed full production of SAPI for
the U.S. Army in late February 2003. Also in the first quarter we completed
the consolidation of our Asheville, North Carolina, operation into the larger
Aerospace and Defense facility

11



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##### Table of Contents



based in Phoenix. The plant closure
and transition resulted in a temporary
revenue shortfall. Additionally, revenues were negatively impacted by
decreases in our military sealed parachute product and was partially offset by
increased production of military personnel vests. Revenue from the Commercial
Products segment declined 3%. Commercial products continue to face pricing
pressures, however this pricing pressure was partially offset by favorable
foreign exchange rates.

Gross margin as a percent of sales decreased to 30% for the three-month
period ended March 31, 2003 from 33% for the comparable period in 2002. Gross
margin as a percent of sales in our Aerospace and Defense segment increased to
36% for the three months ended March 31, 2003 from 35% for the same period in
2002 due to the effect of cost reduction efforts completed in 2002. Gross
margin as a percent of sales in our Commercial Products segment declined to 20%
for the three months ended March 31, 2003 from 27% for the same period in 2002.
Commercial segment gross margins experienced decreases attributed to continued
pricing pressure on existing platforms and a shift in product mix to next
generation products which generate lower margins.




Administrative and research and development expenses for the three-month
period ended March 31, 2003 decreased $0.9 million or 14% as compared to the
same 2002 period. This decrease was primarily attributable to cost savings
reductions related to restructuring activities in prior periods that we are now
seeing the result of as well a continued focus on reducing costs. The decrease
in Administrative costs is partially offset as we invested heavily in the
design and qualification testing of its new SAPI body armor product for future
procurements and by company wide premium increases in insurance that did not
have an impact in the first quarter of 2002. Additionally, we began
to incur costs related to selling our automotive safety business as
well as the sale of the entire company.







Operating
income for the three-month period ended March 31, 2003 was $1.5
million compared to $3.2 million for the same period in 2002. The 2003
operating income for the three-month period was negatively impacted primarily
by lower revenues discussed above as well as restructuring charges, costs
associated with the move of our Asheville facility, the investments in the
design and qualification testing for SAPI body armor for future
procurements, costs related to selling our business, discussed above
and the completion of the voluntary SAPI rework.




Interest expense for the three-month period ended March 31, 2003 was $2.7
million compared to $2.6 for the same period in 2002. Cash paid for interest
for each of the three-month periods ended March 31, 2003 and 2002 was $1.8
million and $2.4 million, respectively.




Income
Taxes  We recorded a tax expense of approximately $110,000 and
$220,000, respectively for
the three-month periods ended March 31, 2003 and 2002 for our operations in the U.K. and
North Carolina and believe that the year to date tax rate is properly reflected
in the financial statements.




Liquidity and Capital Resources




The
accompanying unaudited consolidated financial statements have been
prepared on a going concern basis, which contemplates the realization
of assets and the satisfaction of liabilities in the normal course of
business. As noted in the accompanying financial statements, current
maturities of debt are approximately $45,800,000 million as of
March 31, 2003 and there is uncertainty relating to the
Companys ability to refinance certain of its debt. These
factors, among others, indicate that the Company may be unable to
continue as a going concern. The accompanying financial statements do
not include any adjustments relating to the recoverability and
classification of recorded asset amounts or amounts and
classification of liabilities that might be necessary should the
Company be unable to continue as a going concern. In order to meet
future quarterly covenants and current and long-term debt maturities,
we will need asset sales proceeds, refinancing or recapitalization
transactions, or the sale or merger of the Company.




Current maturities of our debt as of March 31, 2003 are $45.8 million and
primarily consists of $15.4 million with our revolving line of credit (RLC)
due September 30, 2003, $3.2 million with our 9.5% Senior Subordinated Notes
due September 30, 2003 and $26.9 million for our Senior Secured Note due
December 31, 2003. In order to meet future quarterly covenants and current and
long-term debt maturities, we will need asset sales proceeds, refinancing or
recapitalization transactions, or the sale or merger of the Company.

With regard to a sale or merger of the Company or debt refinancing, we
have retained investment bankers, structured a process, completed most process
steps, and have received considerable interest in completing a transaction. In
the event that the Company is successful in completing a sale, merger or
refinancing, the terms of the new structure or financing may allow the Company
to repay or refinance its debt.

On March 31, 2003, we were not in compliance with certain non-monetary
financial covenants under our RLC. On May 13, 2003, we received waivers of the
non-compliance at March 31, 2003.

Because of our management and operational re-alignment and our operational
profitability, we expect to generate future positive operating cash
flows and our existing
availability under our RLC will be adequate to fund our operations, excluding
the principal payments on the current debt previously discussed.

We continually review our revenue and cost forecasts so that we can react
to changes in our operations and liquidity position. The amount and timing of
Department of Defense procurement and future constraints on certain raw
materials and their costs could impact our ability to generate Aerospace

12



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##### Table of Contents



and Defense revenue and income. In our Commercial Products segment sales
contracts for our automotive products are based upon the estimated production
of the next years requirements of the original equipment manufactures
(OEMs). Our ability to maintain Commercial Products revenue will be impacted
by our ability to successfully compete in an increasingly price competitive
market and to properly manage our foreign currency transaction risk. See
Forward-Looking Information and Risks and Uncertainties in our Businessand
Quantitative and Qualitative Disclosure about Market
Risk

Our ability to generate sufficient cash flow from operations is
principally dependent upon our ability to continue to increase revenue and
contain or reduce operating expenses. At March 31, 2003, we had cash and cash
equivalents of $341,838 compared to $212,053 at December 31, 2002. Our RLC had
outstanding borrowings of $15.4 million and remaining borrowing availability of
$1.6 million at March 31, 2003 as compared to outstanding borrowings of $11.3
million and a remaining borrowing availability of $1.3 million at December 31,
2002. The RLC at March 31, 2003 was impacted by timing of collection related to
significant U.S. government receivables. At May 5, 2003 our RLC had
outstanding borrowings of $14.6 million and remaining borrowing availability of
$2.4 million. Because of our federal and certain state net operating loss
carryforwards, we are not a significant cash taxpayer.

Operating activities used approximately $3.5 million of cash during the
three-months ended March 31, 2003 as compared to $0.4 million for the
comparable period in 2002. The increase in cash used by operations was
attributable to greater overall working capital required as compared to the
prior 2002 period, which required heavier investments primarily in accounts
receivable and was partially offset by an increase in accounts payable and
decreases in inventory.

Investing activities used $0.5 million during the three-months ended March
31, 2003, principally attributable to the purchase of manufacturing equipment
in both of our business segments and additional investment in our patent
portfolio.

Financing activities provided net cash of $4.1 million for the
three-months ended March 31, 2003, compared to $0.9 million provided by
financing activities for the same period in 2002. Cash provided in financing
activities during the three-months ended March 31, 2003 and 2002 primarily
related to increased borrowing under our RLC.

We believe we have sufficient manufacturing capacity, at March 31, 2003,
to meet our anticipated future delivery requirements. We may, however, seek
strategic partners for the joint development of capital intensive manufacturing
capacity for new high technology products. We may also seek to obtain
additional capital should demand for our products exceed current capacity. The
raising of capital in public or private markets will depend primarily upon
prevailing market conditions and the demand for our products and technologies.

Research and Development

Historically, we have made significant investments in research and
development. Our research and development expenditures have fluctuated based
on available government-funded contracts and available company funding. We
anticipate that future fluctuations will continue as a result of our efforts to
expand product lines and enhance our existing technologies.

Forward Looking Information and Risks and Uncertainties in our Business

A wide variety of factors affect our projected operating and financial
results and can adversely impact our revenues, profitability and cash flows.
Our liquidity and available working capital depend upon our cash flow from
operations and, potentially, upon proceeds from asset sales or licensing,
refinancing of our debt, or potential sale or merger of the Company. Improved
cash flow from operations will depend on our ability to continue to implement
our cost cutting initiatives. Continued compliance with our debt covenants is
necessary to avoid loan defaults and is a requirement for maintaining access to
funds available under our RLC.

With respect to our product offerings many of our products are
subassemblies in final products. We act as subcontractor to defense industry
prime contractors and as a component supplier to automotive (OEM) and first
tier systems suppliers. Accordingly, we are reliant on others to gain and
retain market acceptance for our products, and we must continue to demonstrate
that our products will provide

13



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##### Table of Contents



advantages to the manufacturers of final products, including increasing product
safety and providing such manufacturers with competitive cost advantages

Although we have long established relationships with a number of our
Aerospace and Defense customers, we do not have significant long-term supply
contracts with any of these customers. Our customers typically do not commit
to long-term production schedules and, as a result, customer orders generally
are subject to cancellation or delay. Reliance upon defense contracts involves
certain risks, including dependence on congressional appropriations and changes
in governmental policies that reflect military and political developments.

In our Commercial Products segment, we operate in the highly competitive
automotive safety industry. As most of our competitors have greater resources
than we do and since products become commoditized over time, our success in
this industry is largely dependent on our ability to innovate. Our ability to
compete effectively in this industry also depends on our ability to remain
competitive in pricing, service, and performance. In addition, automotive OEMs
continually exert downward pressure on prices, forcing us to cut costs and to
innovate in order to maintain margins and projected volumes from year to year.

Factors pertinent to our ability to meet our current and future financial projections include:



| |  | our ability to refinance our debt or achieve acceptable valuations in a process to sell or merge the Company;                                                                                                                
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
| |  | our relationship with our senior lenders and on-going compliance with loan terms and covenants;                                                                                                                              
| 
| |  | our relationship with significant customers and maintenance of preferred supplier relationships with them that are
renegotiated frequently;                                                                                  
| 
| |  | our leveraged status and the level and cost of our debt;                                                                                                                                                                     
| 
| |  | the continued reduction of our fixed expenses;                                                                                                                                                                               
| 
| |  | ability to monetize assets including through sales of certain assets or technologies at a favorable price;                                                                                                                   
| 
| |  | our ability to continue to provide design and manufacturing services, products and new product applications that compare
favorably on the basis of time to introduction, cost, and performance with those of our competitors;
| 
| |  | the cyclical nature of the automobile industry and other markets addressed by our products;                                                                                                                                  
| 
| |  | the level and makeup of military expenditures;                                                                                                                                                                               
| 
| |  | contract mix and shifting production and delivery schedules among our market segments;                                                                                                                                       
| 
| |  | the amount of resources available for independent research and development;                                                                                                                                                  
| 
| |  | proof of concept and production validation of certain of our new technologies and proposed products, as well as our
financial ability to establish manufacturing capacity for such products; and                             
| 
| |  | technological changes introduced by competitors and customers.                                                                                                                                                               

As used throughout this report, the words estimate, anticipate,
expect, should, intend, project, target, or other expressions that
indicate future events identify forward-looking statements which are made
pursuant to safe harbor provisions of the Private Securities Litigation Reform
Act of 1995. We undertake no obligation to update any of these forward-looking
statements to reflect events or circumstances after the date on which such
statements were made or to reflect the occurrence of unanticipated events.
Actual results and trends may differ materially. Risks include those described
herein and in our registration statements and periodic reports filed with the
U.S. Securities and Exchange Commission.

14



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##### Table of Contents






Item 3. Quantitative and Qualitative Disclosure about Market Risk

Currency Exchange Rate Risk

We have currency exposures related to buying and selling in currencies
other than the local currency in which we operate. These exposures may impact
future earnings and/or operating cash flows. Currently, our most significant
exposure relates to the Euro and the British Pound. We have supply contracts
for our ITS® and AHPS that are Euro denominated. We also maintain a
manufacturing facility in the United Kingdom for which we fund its operating
expenses in British Pounds. We enter into foreign currency hedge transactions
to mitigate our associated risks. The magnitude of the exposure varies over
time and we enter into agreements from time to time by which we seek to manage
certain portions of our foreign exchange exposure in accordance with
established policy guidelines. These arrangements primarily hedge cash flows
for forecasted transactions involving receivables and payables. We currently
have no hedging contracts open as of March 31, 2003.




Item 4. Controls and Procedures




We
evaluated, under the supervision and with the participation of
management, including the Chief Executive Officer (CEO) and the Chief
Financial Officer (CFO), the effectiveness of the design and
operation of our disclosure controls and procedures as of
March 31, 2003, pursuant to Rule 15d-14 under the Securities
Exchange Act of 1934 (Exchange Act). Based upon that evaluation, the
CEO and CFO concluded that Simulas disclosure controls and
procedures are effective to ensure that information required to be
disclosed in Simulas reports filed or submitted under the Exchange
Act are recorded, processed, summarized and reported within the time
periods specified in the Securities and Exchange Commissions rules
and forms.







During
the quarterly period covered by this amended report, there were no significant changes in
our internal controls or in other factors that could significantly
affect the disclosure controls.




15



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##### Table of Contents






PART II  OTHER INFORMATION




Item 6. Exhibits and Reports

(a)  Exhibits: The following Exhibits are included pursuant to Item 601 of
Regulation S-K.

|       |  |                                                                                                                                              |  |           |     |  
|------ |  | -------------------------------------------------------------------------------------------------------------------------------------------- |  | --------- | --- | -
|No.    |  | Description                                                                                                                                  |  | Reference
|3.1    |  | Articles of Incorporation of Simula, Inc., as amended and restated                                                                           |  |           | (2  | )
|       |  |                                                                                                                                              |  |           |     |  
|3.2    |  | Bylaws of Simula, Inc., as amended and restated                                                                                              |  |           | (1  | )
|       |  |                                                                                                                                              |  |           |     |  
|4.7    |  | Indenture dated April 1, 1997, in connection with the Companys issuance of the 8%
Senior Subordinated Convertible Notes due May 1, 2004     |  |           | (6  | )
|       |  |                                                                                                                                              |  |           |     |  
|10.11  |  | 1992 Stock Option Plan, as amended effective September 15, 1998                                                                              |  |           | (3  | )
|       |  |                                                                                                                                              |  |           |     |  
|10.12  |  | 1992 Restricted Stock Plan                                                                                                                   |  |           | (1  | )
|       |  |                                                                                                                                              |  |           |     |  
|10.21  |  | 1994 Stock Option Plan, as amended effective September 15, 1998                                                                              |  |           | (3  | )
|       |  |                                                                                                                                              |  |           |     |  
|10.26  |  | Simula, Inc. Employee Stock Purchase Plan                                                                                                    |  |           | (2  | )
|       |  |                                                                                                                                              |  |           |     |  
|10.27  |  | Outside Directors Equity Plan                                                                                                                |  |           | (9  | )
|       |  |                                                                                                                                              |  |           |     |  
|10.37  |  | Simula, Inc. 1999 Incentive Stock Option Plan                                                                                                |  |           | (4  | )
|       |  |                                                                                                                                              |  |           |     |  
|10.41  |  | Financing Agreement with The CIT Group/Business Credit, Inc. dated December 30,1999                                                          |  |           | (5  | )
|       |  |                                                                                                                                              |  |           |     |  
|10.41A |  | Amendment Number Three to Financing Agreement between the Company and The CIT
Group/Business Credit, Inc. dated September 26, 2001           |  |           | (7  | )
|       |  |                                                                                                                                              |  |           |     |  
|10.41B |  | Amendment Number Five to Financing Agreement between the Company and The CIT
Group/Business Credit, Inc. dated June 30, 2002                 |  |           | (10 | )
|       |  |                                                                                                                                              |  |           |     |  
|10.41C |  | Amendment Number Seven to Financing Agreement between the Company and The CIT
Group/Business Credit, Inc. dated October 22, 2002             |  |           | (10 | )
|       |  |                                                                                                                                              |  |           |     |  
|10.41D |  | Amendment Number Nine to Financing Agreement between the Company and The CIT
Group/Business Credit, Inc. dated March 25, 2003                |  |           | (11 | )
|       |  |                                                                                                                                              |  |           |     |  
|10.41E |  | Waiver to Certain Financial Covenants to Financing Agreement between the Company and
The CIT Group/Business Credit, Inc. dated April 9, 2003 |  |           | (11 | )
|       |  |                                                                                                                                              |  |           |     |  
|10.45  |  | Loan Agreement between the Company and Allied Capital Corporation dated September 26,
2001                                                   |  |           | (7  | )
|       |  |                                                                                                                                              |  |           |     |  
|10.45A |  | Waiver and Amendment No. 1 to Loan Agreement between the Company and Allied Capital
Corporation dated August 19, 2002                        |  |           | (10 | )
|       |  |                                                                                                                                              |  |           |     |  
|10.45B |  | Consent and Amendment No. 2 to Loan Agreement between the Company and Allied Capital
Corporation dated March 25, 2003                        |  |           | (11 | )
|       |  |                                                                                                                                              |  |           |     |  
|10.46  |  | Employment Agreement between the Company and Bradley P. Forst dated November 12,
2001, effective October 1, 2000                             |  |           | (7  | )
|       |  |                                                                                                                                              |  |           |     |  
|10.48  |  | Employment Agreement between the Company and Joseph Coltman dated December 13, 2001,
effective October 13, 2000                              |  |           | (8  | )
|       |  |                                                                                                                                              |  |           |     |  
|10.49  |  | Employment Agreement between the Company and John S. Hodgson dated February 1, 2002,
effective February 11, 2002                             |  |           | (8  | )
|       |  |                                                                                                                                              |  |           |     |  
|10.50  |  | Retention Agreement between the Company and John A. Jenson dated December 20, 2002                                                           |  |           | (11 | )
|       |  |                                                                                                                                              |  |           |     |  
|99.1   |  | Certification by Chief Executive Officer pursuant to section 906 of Sarbanes-Oxley Act                                                       |  |           | *   |  
|       |  |                                                                                                                                              |  |           |     |  
|99.2   |  | Certification by Chief Financial Officer pursuant to section 906 of Sarbanes-Oxley Act                                                       |  |           | *   |  



|* |  | Filed herewith
|- |  | --------------

|     |  |                                                                                                                             
|---- |  | ----------------------------------------------------------------------------------------------------------------------------
|(1)  |  | Filed with Registration Statement on Form S-18, No. 33-46152-LA,
under the Securities Act of 1933, effective April 13, 1992.
|     |  |                                                                                                                             
|(2)  |  | Filed with Definitive Proxy on May 15, 1996, for the Companys
Annual Meeting of Shareholders held on June 20, 1996.        
|     |  |                                                                                                                             
|(3)  |  | Filed with report on Form 10-Q for the quarter ended September 30,
1998.                                                    
|     |  |                                                                                                                             
|(4)  |  | Filed with Definitive Proxy on May 14, 1999, for the Companys
Annual Meeting of Shareholders held on June 17, 1999.        
|     |  |                                                                                                                             
|(5)  |  | Filed with report on Form 10-K for the year ended December 31,
1999.                                                        
|     |  |                                                                                                                             
|(6)  |  | Filed with report on Form 10-Q for the quarter ended March 31,
2000.                                                        
|     |  |                                                                                                                             
|(7)  |  | Filed with report on Form 10-Q for the quarter ended September 30,
2001.                                                    
|     |  |                                                                                                                             
|(8)  |  | Filed with report on Form 10-K for the year ended December 31,
2001.                                                        
|     |  |                                                                                                                             
|(9)  |  | Filed with Registration Statement on Form S-8, effective March 28,
2002                                                     
|     |  |                                                                                                                             
|(10) |  | Filed with report on Form 10-Q for the quarter ended September 30,
2002.                                                    
|     |  |                                                                                                                             
|(11) |  | Filed with report on Form 10-K for the year ended December 31,
2002.                                                        

(b)  Reports on Form 8-K:



| | (1) |  | Report on Form 8-K dated March 31, 2003, furnishing notification of
late filing on Form 12b-25.
| | --- |  | -----------------------------------------------------------------------------------------------

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SIGNATURES




Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this amended report (Amendment No. 1) on Form 10Q/A for the quarter ended March
31, 2003 to be signed on its behalf by the undersigned thereunto duly
authorized.




|                       |  |                                                           
|---------------------- |  | ----------------------------------------------------------
|                       |  | SIMULA, INC.                                              
|                       |  |                                                           
|                       | 
|DATE: November 5, 2003 |  | /s/ John A. Jenson

John A. Jenson
Chief Financial Officer
|                       | 

17



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CERTIFICATION

I, Bradley P. Forst, certify that:



|1. |  | I have reviewed this Amendment
No. 1 Report on Form 10-Q/A of Simula, Inc.;                                                                                                                                                                                                                                       
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|2. |  | Based on my knowledge, this
amended report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect
to the period covered by this report;
|  
|3. |  | Based on my knowledge, the financial statements, and other
financial information included in this amended report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented
in this amended report;           
|  
|4. |  | The registrants other certifying officer(s) and I are
responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and
15d-15(e)) for the registrant and have:                                                                                    



| | (a) |  | Designed such disclosure controls and procedures, or
caused such disclosure controls and procedures to be designed
under our supervision, to ensure that material information
relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is
being prepared;         
| | --- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (c) |  | Evaluated the effectiveness of the registrants
disclosure controls and procedures and presented in this amended report
our conclusions about the effectiveness of the disclosure
controls and procedures, as of the end of the period covered by
this report based on such evaluation and                                                                                             
|
| | (d) |  | Disclosed in this report any change in the
registrants internal control over financial reporting that
occurred during the registrants most recent fiscal quarter (the
registrants fourth fiscal quarter in the case of an annual
report) that has materially affected, or is reasonably likely to
materially affect, the registrants internal control over
financial reporting; and



|5. |  | The registrants other certifying officer(s) and I have
disclosed, based on our most recent evaluation of internal control
over financial reporting, to the registrants auditors and the audit
committee of the registrants board of directors (or persons
performing the equivalent functions):
|-- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (a) |  | All significant deficiencies and material weaknesses
in the design or operation of internal control over financial
reporting which are reasonably likely to adversely affect the
registrants ability to record, process, summarize and report
financial information; and
| | --- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (b) |  | Any fraud, whether or not material, that involves management
or other employees who have a significant role in the registrants
internal control over financial reporting.
| | --- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |                        
| | -----------------------
| | /s/ Bradley P. Forst   
| |                        
| | Bradley P. Forst       
| | Chief Executive Officer
| | November 5, 2003       




18



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CERTIFICATION

I, John A. Jenson, certify that:



|1. |  | I have reviewed this Amendment
No. 1 Report on Form 10-Q/A of Simula, Inc.;                                                                                                                                                                                                                                               
|-- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|2. |  | Based on my knowledge, this
amended report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this amended report;
|  
|3. |  | Based on my knowledge, the financial statements, and other financial
information included in this amended report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
amended report;                   
|  
|4. |  | The registrants other certifying officer(s) and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and
have:                                                                                            



| | (a) |  | Designed such disclosure controls
and procedures, or caused such disclosure controls and procedures to
be designed under our supervision, to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report
is being prepared;         
| | --- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (c) |  | Evaluated the effectiveness of the registrants disclosure controls
and procedures and presented in this amended report our conclusions
about the effectiveness of the disclosure controls and procedures, as
of the end of the period covered by this report based on such
evaluation and                                                                                             
|
| | (d) |  | Disclosed in this report any
change in the registrants internal control over financial
reporting that occurred during the registrants most recent
fiscal quarter (the registrants fourth fiscal quarter in the
case of an annual report) that has materially affected, or is
reasonably likely to materially affect, the registrants internal
control over financial reporting; and



|5. |  | The registrants other certifying officer(s) and I have disclosed, based on
our most recent evaluation of internal control over financial
reporting, to the registrants auditors and the audit
committee of the registrants board of directors (or persons performing
the equivalent functions):
|-- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (a) |  | All significant deficiencies and
material weaknesses in the design or operation of internal
control over financial reporting which are reasonably likely to adversely affect the registrants ability to
record, process, summarize and report financial information; and
| | --- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (b) |  | Any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrants
internal control over financial reporting.                                                                                               



| |                                                                            
| | ---------------------------------------------------------------------------
| | /s/ John A. Jenson

John A. Jenson
Chief Financial Officer
November 5, 2003




19



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##### Table of Contents



EXHIBIT INDEX

|     |  |                                                                                       
|---- |  | --------------------------------------------------------------------------------------
|99.1 |  | Certification by Chief Executive Officer pursuant to section 906 of Sarbanes-Oxley Act
|     |  |                                                                                       
|99.2 |  | Certification by Chief Financial Officer pursuant to section 906 of Sarbanes-Oxley Act