SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (date of earliest event reported):
November 7, 2008
AIR INDUSTRIES GROUP, INC.
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(Exact Name of Registrant as Specified in its Charter)
Delaware 000-29245 20-4458244
State of Commission IRS Employer
Incorporation File Number I.D. Number
1479 North Clinton Avenue, Bay Shore, NY 11706
Address of principal executive offices
Registrant's telephone number: (631) 968-5000
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
|_| Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
ITEM 4.02 Non-Reliance on Previously Issued Financial Statements or a Related
Audit Report or Completed Interim Review.
The Company plans to file amendments to its Quarterly Reports on Form 10-QSB or
Form 10-Q for the periods ended June 30, 2007, September 30, 2007, March 31,
2008 and June 30, 2008, as well as for its Annual Report on Form 10-K for the
fiscal year ended December 31, 2007, to change the way in which it accounted for
the series B convertible preferred stock in April and May of 2007 (the "Series B
Convertible Preferred"). On August 29, 2008, the Company received a letter of
comment from the staff of the Division of Corporation Finance, Securities and
Exchange Commission, which among other things, asked the Company to consider
whether there was a beneficial conversion feature attending the issuance of its
Series B Convertible Preferred in April and May of 2008 requiring an adjustment
to its consolidated financial statements.
After reviewing the terms of the certificate of designations relating to the
Series B Convertible Preferred, the presentation requirements of EITF D-98 and
the market price of the common stock into which the Series B Convertible
Preferred is convertible, and consultation with the Company's independent
certified public accountants, the Company's accounting staff concluded that the
adjustments to its consolidated financial statements described below were
appropriate.
On November 7, 2008, the Company's audit committee concluded that the Company's
consolidated financial statements as of and for the year ended December 31,
2007, which were included in the Company's annual report on Form 10-K for the
year ended December 31, 2007, as well as its unaudited consolidated financial
statements as of and for the quarterly periods ended June 30, 2007, September
30, 2007, March 31, 2008 and June 30, 2008, which were included in the Company's
quarterly reports on Form 10-Q for the same quarterly periods and, in the case
of the quarters ended June 30 and September 30, 2007, were restated in the
Company's Annual Report on Form 10-K for the year ended December 31, 2007, could
no longer be relied upon due to the need to make the adjustments discussed
herein. Upon authorization by the Company's board of directors, the Company's
authorized officers discussed with the Company's independent accountant the
matters disclosed in this Current Report on Form 8-K pursuant to Item 4.02.
Beneficial Conversion Feature of the Series B Convertible Preferred Stock
On April 16, 2007 and May 3, 2007, the Company sold 495,500 shares and 306,800
shares, respectively, of its Series B Convertible Preferred to a group of
accredited investors for an aggregate purchase price of $8,032,000, or $10.00
per share. As of the date of issuance, each share of Series B Convertible
Preferred stock was convertible into shares of the Company's common stock at a
conversion price of $0.2766 per share. The closing market price of a share of
the Company's common stock on the OTCBB on April 16, 2007 and May 3, 2007, was
$0.32 and $0.35, respectively. The Company did not record a beneficial
conversion at the time of the transaction. As a result of a comment from the
staff of the Securities and Exchange Commission and a review by its accounting
staff of the accounting treatment for the transaction, the Company has
determined that since the quoted market price represented the best evidence of
the fair value of its common stock at the time of the transaction, the issuance
of the shares of Series B Convertible Preferred included a beneficial conversion
feature, and consequently that it was necessary to restate its consolidated
financial statements for the quarterly periods subsequent to March 31, 2007 as
well as its financial statements for the year ended December 31, 2007, to record
a beneficial conversion feature of approximately $1,589,000. The effect of this
change will be to decrease net income attributable to common shareholders by
approximately $1,589,000 to a net loss attributable to common shareholders of
approximately $1,357,000. As a result of this adjustment, the Company's net loss
per share for the year ended December 31, 2007 would have been $0.02. The
adjustment has no effect on the Company's balance sheet.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: November 10, 2008
AIR INDUSTRIES GROUP, INC.
By: /s/ Peter Rettaliata
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Peter Rettaliata
President and Chief Executive Officer