Delaware
|
3728
|
20-4458244
|
||||
(State or other Jurisdiction
of Incorporation or Organization)
|
(Primary Standard Industrial
Classification Code
Number)
|
(I.R.S. Employer
Identification No.)
|
Large accelerated filer ¨
|
Accelerated filer ¨
|
Non-accelerated filer ¨
|
Smaller reporting company x
|
(Do not check if a smaller reporting company)
|
|
Title of Each Class Of
Securities To Be Registered
|
Amount To
Be
Registered
|
Proposed
Maximum
Offering Price
Per Security
(1)
|
Proposed
Maximum
Aggregate
Offering Price
|
Amount Of
Registration
Fee
|
||||||||||||
Common Stock, $.001 par value
|
1,918,780(2)
|
$
|
$6.00
|
|
$
|
11,512,680
|
$
|
1,570.33
|
(1)
|
Estimated solely for purposes of calculating the registration fee in accordance with Rule 457(c) and Rule 457(g) under the Securities Act of 1933, using the average of the high and low price as reported on the OTCBB on April 26, 2013, which was $6.00 per share.
|
|
(2) |
Includes 293,787 shares of common stock issuable upon exercise of stock options granted under the registrant’s 2010 Equity Incentive Plan.
|
·
|
938,355 shares of common stock sold to investors in a private placement in June and July 2012 (the “2012 Financing”);
|
·
|
686,638 shares of common stock issued to holders of our Junior Subordinated Notes in June 2012 in exchange for their Junior Subordinated Notes (the “Exchange Transaction”); and
|
·
|
293,787 shares of common stock issuable upon exercise of stock options granted under our 2010 Incentive Equity Plan (the “Option Shares”).
|
Page
|
||
Special Note Regarding Forward-Looking Statements
|
i
|
|
About this Prospectus
|
i
|
|
Prospectus Summary
|
1
|
|
Risk Factors
|
3
|
|
Use of Proceeds
|
11
|
|
Market For Common Stock and Related Stockholder Matters
|
11
|
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
12
|
|
Business
|
24
|
|
Directors and Executive Officers
|
31
|
|
Executive Compensation
|
35
|
|
Certain Relationships and Related Transactions
|
37
|
|
Security Ownership of Certain Beneficial Owners and Management
|
38
|
|
Selling Stockholders
|
39
|
|
Plan of Distribution
|
47
|
|
Description of Securities
|
48
|
|
Indemnification for Securities Act Liabilities
|
50
|
|
Legal Matters
|
50
|
|
Experts
|
50
|
|
Available Information
|
50
|
|
Index to Financial Statements
|
F-1
|
Common stock offered by the selling stockholders
|
1,918,780 shares of common stock, including the following:
|
|||
-
|
938,355 shares of common stock sold in the 2012 Financing;
|
|||
-
|
686,638 shares of common stock issued to holders of our Junior Subordinated Notes in the Exchange Transaction; and
|
|||
-
|
293,787 shares of common stock issuable upon exercise of stock options granted under our 2010 Equity Incentive Plan.
|
|||
Common stock to be outstanding after the offering
|
Up to 6,004,880 shares. *
|
|||
Use of proceeds
|
We will not receive any proceeds from the sale of the common stock. However, we will receive the exercise price of any common stock we sell to certain of the selling stockholders upon exercise of stock options. We expect to use the proceeds received from the exercise of the stock options for general working capital purposes.
|
|||
OTCBB symbol
|
AIRI
|
*
|
Based on 5,711,093 shares of common stock outstanding as of March 15, 2013 and includes the 293,787 shares of common stock that are issuable upon the exercise of the stock options that are registered pursuant to the registration statement that this prospectus is part of but does not include any shares of common stock issuable upon exercise of other outstanding warrants or options.
|
1)
|
Risks related to our business, including risks specific to the defense and aerospace Industry:
|
|
2)
|
Risks arising from our indebtedness; and
|
|
3)
|
Risks related to our common stock and our status as a public company.
|
o
|
incur additional indebtedness;
|
o
|
pay dividends on our capital stock or redeem, repurchase or retire our capital stock or indebtedness;
|
o
|
make investments, loans, advances and acquisitions;
|
o
|
create restrictions on the payment of dividends or other amounts to us from our subsidiaries;
|
o
|
sell assets, including capital stock of our subsidiaries;
|
o
|
consolidate or merge;
|
o
|
create liens; or;
|
o
|
enter into sale and lease-back transactions.
|
High
|
Low
|
|||||||
Quarter Ended March 31, 2011
|
$
|
3.20
|
$
|
2.95
|
||||
Quarter Ended June 30, 2011
|
$
|
3.00
|
$
|
2.95
|
||||
Quarter Ended September 30, 2011
|
$
|
3.00
|
$
|
2.95
|
||||
Quarter Ended December 31, 2011
|
$
|
3.00
|
$
|
2.95
|
||||
Quarter Ended March 31, 2012
|
$
|
9.64
|
$
|
2.95
|
||||
Quarter Ended June 30, 2012
|
$
|
6.27
|
$
|
3.17
|
||||
Quarter Ended September 30, 2012
|
$
|
6.27
|
$
|
5.50
|
||||
Quarter Ended December 31, 2012
|
$
|
12.00
|
$
|
5.70
|
||||
Quarter Ended March 31, 2013
|
$
|
6.80
|
$
|
6.00
|
||||
Quarter Ended June 30, 2013 (through April 26, 2013)
|
$
|
6.00
|
$
|
6.00
|
Statement of Operations Data
|
||||||||
2012
|
2011
|
|||||||
Net sales
|
$
|
64,215,000
|
$
|
53,745,000
|
||||
Cost of sales
|
49,357,000
|
42,817,000
|
||||||
Gross profit
|
$
|
14,858,000
|
$
|
10,928,000
|
||||
Operating and interest costs
|
10,717,000
|
8,651,000
|
||||||
Other income (expense) net
|
(146,000
|
)
|
27,000
|
|||||
Income taxes
|
1,447,000
|
57,000
|
||||||
Net Income
|
$
|
2,548,000
|
$
|
2,247,000
|
||||
Balance Sheet Data
|
||||||||
2012
|
2011
|
|||||||
Cash and cash equivalents
|
$
|
490,000
|
$
|
577,000
|
||||
Working capital
|
11,680,000
|
7,821,000
|
||||||
Total assets
|
53,156,000
|
36,981,000
|
||||||
Total stockholders' equity
|
18,988,000
|
4,666,000
|
Year Ended December 31,
|
||||||||
2012
|
2011
|
|||||||
Air Industries Machining
|
||||||||
Net Sales
|
$
|
42,075,000
|
$
|
42,668,000
|
||||
Gross Profit
|
8,218,000
|
8,013,000
|
||||||
Pre Tax Income
|
4,181,000
|
3,527,000
|
||||||
Assets
|
24,673,000
|
27,735,000
|
||||||
Welding Metallurgy
|
||||||||
Net Sales
|
14,907,000
|
11,077,000
|
||||||
Gross Profit
|
4,030,000
|
2,915,000
|
||||||
Pre Tax Income
|
1,501,000
|
1,288,000
|
||||||
Assets
|
10,818,000
|
8,028,000
|
||||||
Nassau Tool Works
|
||||||||
Net Sales
|
7,233,000
|
-
|
||||||
Gross Profit
|
2,610,000
|
-
|
||||||
Pre Tax Income
|
963,000
|
-
|
||||||
Assets
|
14,410,000
|
-
|
||||||
Corporate
|
||||||||
Net Sales
|
-
|
-
|
||||||
Gross Profit
|
-
|
-
|
||||||
Pre Tax Loss
|
(2,650,000
|
)
|
(2,511,000
|
)
|
||||
Assets
|
13,200,000
|
7,883,000
|
||||||
Consolidated
|
||||||||
Net Sales
|
64,215,000
|
53,745,000
|
||||||
Gross Profit
|
14,858,000
|
10,928,000
|
||||||
Pre Tax Income
|
3,995,000
|
2,304,000
|
||||||
Provision for Taxes
|
1,447,000
|
57,000
|
||||||
Net Income
|
2,548,000
|
2,247,000
|
||||||
Elimination of Assets
|
(9,945,000
|
)
|
(6,665,000
|
)
|
||||
Total Assets
|
53,156,000
|
36,981,000
|
Customer
|
Percentage of Sales
|
|||||||
2012
|
2011
|
|||||||
Sikorsky Aircraft
|
27.6
|
44.4
|
||||||
Goodrich Landing Gear Systems
|
26.3
|
19.2
|
||||||
Northrup Grumman Corporation
|
11.4
|
11.9
|
Customer
|
Percentage of Receivables
|
|||||||
December
|
December
|
|||||||
2012
|
2011
|
|||||||
Northrup Grumman Corporation
|
25.3
|
26.2
|
||||||
GKN Aerospace
|
18.6
|
12.9
|
||||||
Goodrich Landing Gear Systems
|
10.7
|
18.3
|
||||||
Sikorsky Aircraft
|
*
|
13.3
|
||||||
Helicopter Support Inc
|
*
|
11.5
|
●
|
Consolidated: Gross profit from operations for the year ended December 31, 2012 increased by approximately $3,930,000 or 36.0%, to approximately $14,858,000 as compared to gross profit of $10,928,000 for the comparable period in 2011.
|
|
●
|
AIM: Gross profit at AIM increased by approximately $205,000 or less than 2.6% to $8,218,000 for the year ended December 31, 2012 as compared to $8,013,000 for the comparable period in 2011.
|
|
●
|
WMI: Gross profit at Welding for the year ended December 31, 2012 increased by approximately $1,115,000 or 38.3% to $4,030,000 for 2012 compared to $2,915,000 for the comparable period in 2011. The increase in gross profit at WMI was attributable in part to higher sales, and in part to an increase in gross margin resulting from the reclassification of costs of certain personnel to General and Administrative expense from indirect labor.
|
|
●
|
NTW: Gross profit for the period June 20, 2012 to December 31, 2012 was $2,610,000.
|
●
|
Consolidated SG&A costs for the year ended December 31, 2012 totaled $8,873,000 and increased by $2,298,000 or 34.9% compared to $6,575,000 for the year ended December 31, 2011. Included in SG&A costs for 2012 is approximately $1,644,000 in costs incurred at NTW, approximately 71.5% of the increase. In addition, there are also included $200,000 of costs incurred by AIRI relating to the NTW Acquisition and $145,000 of expenses at WMI relating to the reclassification of certain personnel as described below.
|
o
|
AIM: SG&A costs for the year ended December 31, 2012 totaled approximately $3,360,000 and decreased by $ (541,000) or (13.9 %) compared to the year ended December 31, 2011.
|
|
o
|
WMI: SG&A costs for the year ended December 31, 2012 totaled approximately $2,417,000 and increased by $901,000 or approximately 59.4% compared to the year ended December 31, 2011. The increase in SG&A costs at Welding resulted in part from a reclassification in 2012 of certain management personnel costs from factory overhead to SG&A. The reclassification resulted from a determination that the nature of the services performed by certain individuals had evolved from production activities to more managerial activities in part, as a result of an increase in the number of personnel at WMI as a result of the growth in its business. The reduction in factory overhead costs increased gross profit margin at Welding for 2012 to 27.0% from 26.0%.
|
|
o
|
NTW: SG&A costs totaled approximately $1,644,000 for the period June 20, 2012 to December 31, 2012.
|
|
o
|
AIRI – Corporate: SG&A costs for the year ended December 31, 2012 totaled approximately $1,451,000 and increased by $319,000 or 28.2% compared to the year ended December 31, 2011. Costs relating to the NTW Acquisition were approximately $200,000, and represented approximately 62.7% of the increase.
|
2012
|
2011
|
|||||||
Cash Provided by (used in):
|
||||||||
Operating activites
|
1,694
|
3,633
|
||||||
Investing activities
|
(13,038
|
)
|
(1,288
|
)
|
||||
Financing activities
|
11,257
|
(2,305
|
)
|
|||||
Net (decrease) increase in cash and cash equivalents
|
(87
|
)
|
40
|
Payment due by period
|
||||||||||||||||||||
Less than
|
1-3
|
3-5
|
More than
|
|||||||||||||||||
Total
|
1 year*
|
years
|
years
|
5 years
|
||||||||||||||||
Long term debt and capitial leases
|
$
|
24,241
|
$
|
19,430
|
$
|
3,376
|
$
|
1,435
|
$
|
-
|
||||||||||
Operating leases
|
14,712
|
1,600
|
3,315
|
2,149
|
7,648
|
|||||||||||||||
Total
|
$
|
38,953
|
$
|
21,030
|
$
|
6,691
|
$
|
3,584
|
$
|
7,648
|
* The revolving line of credit with our senior lender is classified as due in less than 1 year.
|
Favorable differentiation of Welding Metallurgy from the competition, and the securing of long-term customer commitments.
|
||
Diversification of customer base.
|
||
Evolution from being a supplier of welding services to being a Turnkey Solution Provider.
|
Name:
|
Age
|
Position
|
||
Peter D. Rettaliata
|
62
|
President, CEO and Director
|
||
Dario A. Peragallo
|
50
|
President of AIM
|
||
Gary Settoducato
|
51
|
President Welding Metallurgy
|
||
Scott A. Glassman
|
35
|
Chief Accounting Officer
|
||
Seymour G. Siegel
|
70
|
Director
|
||
David J. Buonanno
|
58
|
Director
|
||
Michael N. Taglich
|
47
|
Chairman of the Board
|
||
Robert F. Taglich
|
46
|
Director
|
||
Robert Schroeder
|
46
|
Director
|
||
Michael Brand
|
53
|
Director
|
o
|
overseeing and monitoring the integrity of our consolidated financial statements, our compliance with legal and regulatory requirements as they relate to financial statements or accounting matters, and our internal accounting and financial controls;
|
o
|
preparing the report that SEC rules require be included in our annual proxy statement;
|
o
|
overseeing and monitoring our independent registered public accounting firm's qualifications, independence and performance;
|
o
|
providing the Board with the results of our monitoring and its recommendations; and
|
o
|
providing to the Board additional information and materials as it deems necessary to make the Board aware of significant financial matters that require the attention of the Board.
|
·
|
establishing the Company’s general compensation policy, in consultation with the Company’s senior management, and overseeing the development and implementation of compensation programs.
|
·
|
reviewing and approving corporate goals and objectives relevant to the compensation of the CEO, and evaluating the performance of the CEO at least annually in light of those goals and objectives and communicating the results of such evaluation to the CEO and the Board, and has the sole authority to determine the CEO’s compensation level based on this evaluation, subject to ratification by the independent directors on the Board. In determining the incentive component of CEO compensation, the Committee will consider, among other factors, the Company’s performance and relative stockholder return , the value of similar incentive awards to CEOs at comparable companies, the awards given to the CEO in past years, and such other factors as the Committee may be determine to be appropriate.
|
·
|
reviewing and approving the compensation of all other executive officers of the Company, such other managers as may be directed by the Board, and the directors of the Company.
|
·
|
overseeing the Board’s benefit and equity compensation plans, overseeing the activities of the individuals and committees responsible for administering these plans, and discharging any responsibilities imposed on the Committee by any of these plans.
|
·
|
approving issuances under, or any material amendments to, any stock option or other similar plan pursuant to which a person not previously an employee or director of the Company, as an inducement material to the individual’s entering into employment with the Company, will acquire stock or options.
|
·
|
in consultation with management, overseeing regulatory compliance with respect to compensation matters, including overseeing the Company’s policies on structuring compensation programs to preserve related tax objectives.
|
·
|
reviewing and approving any severance or similar termination payments proposed to be made to any current or former officer of the Company.
|
·
|
preparing an annual report on executive compensation for inclusion in our proxy statement for the election of directors, if required under the applicable SEC rules.
|
•
|
forward the communication to the Director(s) to whom it is addressed;
|
•
|
forward the communication to the appropriate management personnel;
|
•
|
attempt to handle the inquiry directly, for example where it is a request for information about theCompany, or it is a stock-related matter; or
|
•
|
not forward the communication if it is primarily commercial in nature or if it relates to an improper or
|
Name and principal Position
|
Year
|
Salary
|
Bonus
|
Stock
awards |
Option
awards |
Non Equity
Incentive |
Nonqualified
deferred |
All other
compensation |
Total | ||||
($) | ($) | ($) | ($) | ($) | ($) | ($) | ($) | ||||||
Peter D. Rettaliata
|
2012
|
230,901
|
32,500
|
-
|
-
|
-
|
-
|
-
|
263,401
|
||||
CEO
|
2011
|
240,246
|
40,000
|
-
|
-
|
-
|
-
|
-
|
280,246
|
||||
Dario A. Peragallo
|
2012
|
228,236
|
32,500
|
-
|
-
|
-
|
-
|
5,988
|
(1)
|
266,724
|
|||
President of AIM
|
2011
|
237,809
|
40,000
|
-
|
-
|
-
|
-
|
5,988
|
(1)
|
283,797
|
|||
Scott A. Glassman
|
2012
|
124,100
|
8,000
|
-
|
-
|
-
|
-
|
3,000
|
(1)
|
135,100
|
|||
Chief Accounting Officer
|
2011
|
127,404
|
7,000
|
-
|
-
|
-
|
-
|
3,000
|
(1)
|
137,404
|
|||
Gary Settoducato
|
2012
|
178,365
|
35,000
|
-
|
-
|
-
|
-
|
6,348
|
(1)
|
219,713
|
|||
President of WMI
|
2011
|
175,000
|
30,000
|
-
|
-
|
-
|
-
|
6,108
|
(1)
|
211,108
|
(1) Represents car allowance.
|
Option Awards
|
Stock Awards
|
||||||||||||||
Name
|
Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable
|
Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable
|
Option
Exercise
Price
|
Option
Expiration
Date
|
Equity Incentive
Plan Awards:
Number of
Unearned Shares,
Units or Other
Rights That Have
Not Vested (#)
|
Equity Incentive Plan
Awards: Market or
Payout Value of
Unearned Shares,
Units or Other Rights
That Have Not Vested
|
|||||||||
Peter D. Rettaliata
|
375
|
-
|
88.00
|
9/26/15
|
-
|
-
|
|||||||||
Peter D. Rettaliata
|
375
|
-
|
171.20
|
9/15/15
|
-
|
-
|
|||||||||
Peter D. Rettaliata
|
375
|
-
|
190.80
|
9/15/15
|
-
|
-
|
|||||||||
Peter D. Rettaliata
|
375
|
-
|
114.00
|
9/15/15
|
-
|
-
|
|||||||||
Peter D. Rettaliata
|
1,200
|
300
|
90.00
|
9/15/15
|
-
|
-
|
|||||||||
Peter D. Rettaliata
|
51,716
|
-
|
4.50
|
7/29/15
|
-
|
-
|
|||||||||
Dario Peragallo
|
375
|
-
|
88.00
|
9/26/15
|
-
|
-
|
|||||||||
Dario Peragallo
|
375
|
-
|
171.20
|
9/15/15
|
-
|
-
|
|||||||||
Dario Peragallo
|
375
|
-
|
190.80
|
9/15/15
|
-
|
-
|
|||||||||
Dario Peragallo
|
375
|
-
|
114.00
|
9/15/15
|
-
|
-
|
|||||||||
Dario Peragallo
|
1,200
|
300
|
90.00
|
9/15/15
|
-
|
-
|
|||||||||
Dario Peragallo
|
51,716
|
-
|
4.50
|
7/29/15
|
-
|
-
|
|||||||||
Scott Glassman
|
25
|
-
|
110.40
|
12/31/15
|
-
|
-
|
|||||||||
Scott Glassman
|
12,168
|
-
|
4.50
|
7/29/15
|
-
|
-
|
|||||||||
Gary Settaducato
|
75
|
-
|
96.00
|
12/31/15
|
-
|
-
|
|||||||||
Gary Settaducato
|
113
|
-
|
110.40
|
12/31/15
|
-
|
-
|
|||||||||
Gary Settaducato
|
44,589
|
-
|
4.50
|
12/31/15
|
-
|
-
|
DIRECTOR COMPENSATION
|
||||||||||||||||||||||||||||
Name
|
Fees Earned or Paid in Cash ($)
|
Stock Awards ($)
|
Option Awards ($)
|
Non-Equity Incentive Plan Compensation ($)
|
Non-Qualified Deferred Compensation Earnings ($)
|
All Other Compensation ($)
|
Total ($)
|
|||||||||||||||||||||
Michael N. Taglich
|
57,500
|
-
|
4,196
|
-
|
-
|
-
|
61,696
|
|||||||||||||||||||||
Robert F. Taglich
|
57,500
|
-
|
4,196
|
-
|
-
|
-
|
61,969
|
|||||||||||||||||||||
Robert Schroeder
|
24,000
|
-
|
4,196
|
-
|
-
|
-
|
28,196
|
|||||||||||||||||||||
David J. Buonanno
|
24,000
|
-
|
4,196
|
-
|
-
|
-
|
28,196
|
|||||||||||||||||||||
Seymour G. Siegel
|
36,000
|
-
|
4,196
|
-
|
-
|
-
|
40,196
|
|||||||||||||||||||||
Michael Brand
|
19,750
|
-
|
6,497
|
-
|
-
|
-
|
26,247
|
Name
|
Number of Shares
|
Percent of Class
|
||||||
Owner of More than 5% of Class:
|
||||||||
Hillson Partners LP (1)
|
||||||||
Hillson Private Partners II, LLLP (1)
|
331,556
|
5.81
|
%
|
|||||
110 North Washington Street, Suite 401
|
||||||||
Rockville, MD 20850
|
||||||||
Directors and Executive Officers:
|
||||||||
Peter D. Rettaliata
|
56,961
|
(2)
|
*
|
|||||
Michael N. Taglich
|
419,923
|
(3)
|
7.31
|
%
|
||||
Seymour G. Siegel
|
7,289
|
(4)
|
*
|
|||||
David J. Buonanno
|
7,039
|
(4)
|
*
|
|||||
Robert F. Taglich
|
437,924
|
(3)
|
7.62
|
%
|
||||
Robert Schroeder
|
76,559
|
(5)
|
1.33
|
%
|
||||
Michael Brand
|
6,000
|
(6)
|
*
|
|||||
Dario Peragallo
|
57,500 | (2) | * | |||||
Gary Settoducato
|
44,796
|
(7)
|
*
|
|||||
Scott Glassman
|
12,205
|
(8)
|
*
|
|||||
All directors and officers
|
1,064,270
|
(9)
|
17.84
|
%
|
||||
as a group (10 persons)
|
*Less than 1 %
|
·
|
938,355 shares sold in the 2012 Financing;
|
·
|
686,638 shares of common stock issued to holders of our Junior Subordinated Notes in June 2012 in exchange for their Junior Subordinated Notes in the exchange Transaction; and
|
·
|
293,787 shares of common stock issuable upon exercise of stock options granted under our 2010 Equity Incentive Plan.
|
Selling Stockholder
|
Shares of Common Stock Owned Before this Offering | Percentage of Common Stock Beneficially Owned Before this Offering (1) | Shares of Common Stock Being Offered in this Offering | Shares of Common Stock Owned After this Offering (2) | Percentage of Common Stock Beneficially Owned After this Offering (3) |
David L Allen
|
26,895
|
*
|
12,666
|
14,229
|
*
|
Robert W Allen Jr
|
26,866
|
*
|
12,666
|
14,200
|
*
|
Robert W Allen Trust UAD 04/29/08 Robert W Allen TTEE
|
42,296
|
*
|
13,333
|
28,963
|
*
|
Susan M Allen Trust UAD 04/29/08 Susan Allen TTEE
|
42,300
|
*
|
13,333
|
28,967
|
*
|
Applebaum Family Ltd Partners Irving
Applebaum General Ptnr
|
54,474
|
*
|
10,666
|
43,808
|
*
|
Gary Arnold And Patricia Arnold TEN COM
|
31,655
|
*
|
23,333
|
8,322
|
*
|
Arnold Ventures Fund
|
281,711
|
4.93%
|
41,600
|
240,111
|
4.00%
|
Augustus Baldini
|
1,000
|
*
|
1,000
|
0
|
__
|
Marvin Barish
|
2,000
|
*
|
2,000
|
0
|
__
|
Barktones LLC
|
41,666
|
*
|
41,666
|
0
|
__
|
Rachel T Baroni Trust UAD 12/31/94 P J Baroni & R T Baroni TTEES AMD 08/11/09
|
8,333
|
*
|
8,333
|
0
|
__
|
Keith Becker
|
25,246
|
*
|
10,000
|
15,246
|
*
|
Raymond M Beebe & Joan P Beebe JTWROS
|
16,505
|
*
|
7,500
|
9,005
|
*
|
Bensev Holdings Inc. (Ben Savec)
|
5,000
|
*
|
5,000
|
0
|
__
|
Ronald A Bero
|
10,000
|
*
|
10,000
|
0
|
__
|
John R Bertsch Trust Dtd 12/4/2004 John R Bertsch Trustee
|
193,868
|
3.39%
|
90,000
|
103,868
|
1.73%
|
Harvey Bibicoff and Jacqueline Bibicoff Trustees of the Bibicoff Family Trust Dtd 5/16/00
|
15,000
|
*
|
15,000
|
0
|
__
|
Billings Family Revocable Trust UAD 05/20/91 J S Billings & M D Billings TTEES AMD 03/18/03
|
8,484
|
*
|
4,166
|
4,318
|
*
|
Mordecai Bluth
|
1,450
|
*
|
1,450
|
0
|
__
|
Steven A. Boggs
|
37,324
|
*
|
18,333
|
18,991
|
*
|
Jeremy Bond
|
49,279
|
*
|
23,333
|
25,946
|
*
|
Stanley A Bornstein
|
11,621
|
*
|
4,000
|
7,621
|
*
|
Alvin R Bonnette Rev Trust U A DTD
1/31/85 Alvin R Bonnette TTEE
|
22,066
|
*
|
13,333
|
8,733
|
*
|
Charles Brand
|
32,739
|
*
|
15,000
|
17,739
|
*
|
Sandra L. Brecher
|
42,481
|
*
|
8,333
|
34,138
|
*
|
Angus Bruce Lauralee Bruce JT WROS
|
10,076
|
*
|
5,000
|
5,076
|
*
|
Richard Buchakjian
|
23,511
|
8,333
|
15,178
|
*
|
|
Peter Carroll & Maureen Carroll JT/WROS
|
3,000
|
*
|
3,000
|
0
|
__
|
Robert B Cashion
|
8,640
|
*
|
4,833
|
3,807
|
*
|
Corbert L. Clark, Jr.
|
8,333
|
*
|
8,333
|
0
|
*
|
Kenneth W. Cleveland
|
4,000
|
*
|
4,000
|
0
|
__
|
Selling Stockholder
|
Shares of
Common Stock
Owned
Before this
Offering
|
Percentage of Common Stock Beneficially Owned Before this Offering (1) | Shares of Common Stock Being Offered in this Offering | Shares of Common Stock Owned After this Offering (2) | Percentage of Common Stock Beneficially Owned After this Offering (3) |
Eliot D. Cohen And Bonnie S. Cohen JTWROS
|
6,000
|
*
|
6,000
|
0
|
__
|
John B Connor IRA
|
4,000
|
*
|
4,000
|
0
|
__
|
Edward J Cook & Eleanor A Cook JTWROS
|
7,807
|
*
|
4,000
|
3,807
|
*
|
Ronald D Cowan Living Trust UAD 05/08/03 Ronald D Cowan TTEE
|
4,035
|
*
|
1,500
|
2,535
|
*
|
Debruyn Holdings Inc .
|
55,790
|
*
|
3,300
|
34,158
|
*
|
Robert L De Bruyn & Tracey H De Bruyn JTWROS
|
55,790
|
*
|
4,166
|
34,158
|
*
|
Robert L Debruyn Trust UAD 10/5/94 Robert L Debruyn & Tracey H Debruyn TTEE
|
55,790
|
*
|
5,000
|
34,158
|
*
|
Tracey H Debruyn Trust UAD 10/5/94 Tracey H Debruyn & Robert L Debruyn TTEE
|
55,790
|
*
|
9,166
|
34,158
|
*
|
Revocable Living Trust of Frances Deluca UAD 10/09/01 Frances Deluca & Guerino Deluca TTEES AMD 08/08/07
|
12,500
|
*
|
12,500
|
0
|
__
|
The Paul G. Detkin Revocable Trust UAD 12/11/07 Paul G Detkin TTEE
|
5,000
|
*
|
5,000
|
0
|
__
|
James B Deutsch & Deborah M Deutsch JTWROS
|
2,500
|
*
|
2,500
|
0
|
__
|
Joseph F Domenice
|
3,333
|
*
|
3,333
|
0
|
__
|
Nutie Dowdle
|
16,369
|
*
|
10,000
|
6,639
|
*
|
Richard Duke
|
51,011
|
*
|
32,333
|
18,678
|
*
|
Michael Dunham
|
8,333
|
*
|
8,333
|
0
|
__
|
Robert Edmondson
|
14,701
|
*
|
2,000
|
12,701
|
*
|
IRA fbo Lynn B Epstein Pershing LLC as Custodian Rollover Account
|
5,000
|
*
|
5,000
|
0
|
__
|
Albert Esposito & Margaret Esposito JTWROS
|
44,238
|
*
|
26,666
|
17,572
|
*
|
Harry M Farnham III& Cynthia G Farnham JTWROS
|
1,000
|
*
|
1,000
|
0
|
__
|
Joseph Feldschuh
|
3,425
|
*
|
1,666
|
1,759
|
__
|
Arthur H. Finnel
|
1,000
|
*
|
1,000
|
0
|
__
|
Robert Louis Fisher & Carroll Fisher JT TEN WROS
|
10,997
|
*
|
4,166
|
6,831
|
*
|
Karl L Fisher
|
5,000
|
*
|
5,000
|
0
|
__
|
IRA fbo Scott C Folkers
|
4,000
|
*
|
4,000
|
0
|
__
|
Dennis Fortin
|
189,509
|
3.32%
|
81,666
|
107,843
|
1.80%
|
Michael Foster & Kathryn L Foster JTWROS TOD DTD 01/06/04
|
7,535
|
*
|
5,000
|
2,535
|
*
|
Michael Fourticq
|
59,764
|
1.09%
|
16,666
|
43,098
|
*
|
Selling Stockholder
|
Shares of
Common Stock
Owned
Before this
Offering
|
Percentage of Common Stock Beneficially Owned Before this Offering (1) | Shares of Common Stock Being Offered in this Offering | Shares of Common Stock Owned After this Offering (2) | Percentage of Common Stock Beneficially Owned After this Offering (3) |
Carolyn L Foutch
|
20,204
|
*
|
7,499
|
4,372
|
*
|
Foutch Family Living Trust UAD 10/20/08 Carolyn Foutch TTEE
|
20,204
|
*
|
8,333
|
4,372
|
*
|
IRA fbo Paul E Frascoia Pershing LLC as Custodian Rollover Account
|
5,000
|
*
|
5,000
|
0
|
*
|
Brigitte Ferrada-Stetson
|
12,500
|
*
|
12,500
|
0
|
__
|
Friedland Trust UAD 12/13/07 Stephen Friedland & Linda Friedland TTEES
|
1,575
|
*
|
1,575
|
0
|
__
|
Douglas Friedrich & Melanie Friedrich JT/WROS
|
19,589
|
*
|
3,333
|
16,256
|
__
|
Richard L. Gerhardt
|
3,412
|
*
|
1,666
|
1,746
|
*
|
David R Gienapp
|
5,535
|
*
|
3,000
|
2,535
|
*
|
Robert P Giesen
|
7,535
|
*
|
5,000
|
2,535
|
*
|
Peter S Gold
|
4,035
|
*
|
1,500
|
2,535
|
*
|
IRA fbo Jeffrey Golden Pershing LLC as Custodian
|
2,500
|
*
|
2,500
|
0
|
__
|
Edward J. Hart
|
20,000
|
*
|
20,000
|
0
|
__
|
Michael P. Haggerty
|
17,873
|
*
|
11,833
|
6,040
|
*
|
Jeffrey G Hipp & Mary Ann Hipp JT/WROS
|
10,000
|
*
|
10,000
|
0
|
__
|
Joel E Hipp & Patricia N Hipp JTRWROS
|
2,500
|
*
|
2,500
|
0
|
__
|
H. Philip Howe Trust UAD 11/15/02 H Philip Howe & Margaret Virginia Howe TTEES
|
2,500
|
2,500
|
0
|
__
|
|
Glenn R Hubbard
|
32,983
|
*
|
15,000
|
17,983
|
*
|
Junge Revocable Trust UAD 12/09/91 John P Junge TTEE AMD 09/26/06
|
58,333
|
1.02%
|
58,333
|
0
|
__
|
Lawrence Kane
|
7,495
|
*
|
5,000
|
2,495
|
*
|
Larry S Kaplan Marla B Kaplan JT/WROS
|
11,621
|
*
|
4,000
|
7,621
|
*
|
James Kasch
|
2,000
|
*
|
2,000
|
0
|
__
|
IRA fbo Stephen Kasle Pershing LLC as Custodian Rollover Account
|
1,500
|
*
|
1,500
|
0
|
__
|
Matthew A. Keefer
|
16,827
|
*
|
6,665
|
10,162
|
*
|
William N Kehl
|
17,791
|
*
|
8,331
|
9,460
|
*
|
Kimura Corporation
|
100,000
|
1.75%
|
100,000
|
0
|
__
|
Charles E Klabunde Trust Charles E Klabunde TTEE U/A Dated 4/9/03
|
7,076
|
*
|
2,000
|
5,076
|
*
|
Randall S. Knox
|
16,931
|
*
|
8,334
|
8,597
|
*
|
Richard A Kraemer Trust U A/D 12-23-96 Richard A Kraemer TTEE
|
34,299
|
*
|
16,666
|
17,633
|
*
|
A F Lehmkuhl
|
15,008
|
*
|
7,166
|
7,842
|
*
|
Selling Stockholder
|
Shares of
Common Stock
Owned
Before this
Offering
|
Percentage of Common Stock Beneficially Owned Before this Offering (1) | Shares of Common Stock Being Offered in this Offering | Shares of Common Stock Owned After this Offering (2) | Percentage of Common Stock Beneficially Owned After this Offering (3) |
IRA fbo Samuel E Leonard Pershing LLC as Custodian
|
2,500
|
*
|
2,500
|
0
|
__
|
Judith A Levinson Trust UAD 05/10/10 Judith A Levinson TTEE
|
1,700
|
*
|
1,700
|
0
|
__
|
The Shirley J Lewis Marital Trust B UAD
06/26/01 Guy W Lewis TTEE
|
8,333
|
*
|
8,333
|
0
|
__
|
Keith Liggett
|
1,666
|
*
|
1,666
|
0
|
__
|
Andrew K Light
|
39,885
|
*
|
18,333
|
21,552
|
*
|
Michael A Lilly Rev Liv Tr Dtd 11-1-91 Michael A Lilly TTEE
|
6,291
|
4,666
|
1,625
|
*
|
|
Holly Lee Loebel
|
4,166
|
*
|
4,166
|
0
|
__
|
Marvin J Loutsenhizer
|
1,000
|
*
|
1,000
|
0
|
__
|
Roger W. Lunstra And Joyce M. Lunstra Living Trust Dtd 6/15/07 Roger W. Lunstra and Joyce M Lunstra Co-TTEES
|
3,333
|
*
|
3,333
|
0
|
__
|
Robert W Main TTEE under the Robert W Main Trust Dtd 9/7/05
|
1,100
|
*
|
1,100
|
0
|
__
|
Markets Edge Ltd
|
15,000
|
*
|
15,000
|
0
|
__
|
Robert H Mapp
|
5,035
|
*
|
2,500
|
2,535
|
*
|
Peter Mangiameli
|
8,333
|
*
|
8,333
|
0
|
__
|
Donald B. McCulloch Trust U/A/DTD 3/16/77 Donald B. Mcculloch and Jacqueline M McCulloch Co-Ttrustee
|
1,700
|
*
|
1,700
|
0
|
__
|
Bruce C McDermott & Margret G McDermott JT TEN
|
1,700
|
*
|
1,700
|
0
|
__
|
James J McEntee
|
3,333
|
*
|
3,333
|
0
|
__
|
Diane Miller
|
1,665
|
*
|
1,665
|
0
|
__
|
Louis and Judith Miller Family Trust Louis & Judith Miller TTEES
|
8,977
|
*
|
7,500
|
1,477
|
*
|
Roger J Minch
|
500
|
*
|
500
|
0
|
__
|
P. Kenneth Nitz
|
2,500
|
*
|
2,500
|
0
|
__
|
Sandra P Nitz
|
2,000
|
*
|
2,000
|
0
|
__
|
Norper Investments
|
14,702
|
*
|
8,333
|
6,369
|
*
|
Ann B Oldfather c/o Oldfather & Morris
|
4,000
|
*
|
4,000
|
0
|
__
|
Walter T Parkes
|
10,000
|
*
|
10,000
|
0
|
__
|
Wulf Paulick & Renate Paulick JT/WROS
|
11,369
|
*
|
5,000
|
6,369
|
*
|
Michael D Pearson & Lisa M Pearson
|
5,000
|
*
|
5,000
|
0
|
__
|
Powell Family Limited Partners
|
10,000
|
*
|
10,000
|
0
|
__
|
James E Puerner
|
2,000
|
*
|
2,000
|
0
|
__
|
Norman and Sally Ravich Family Trust UAD 12/24/92 Mark H Ravich TTEE
|
14,621
|
*
|
7,000
|
7,621
|
*
|
Steve Redmon & Brenda Redmon JT TEN WROS
|
10,346
|
*
|
4,000
|
6,346
|
*
|
Selling Stockholder
|
Shares of
Common Stock
Owned
Before this
Offering
|
Percentage of Common Stock Beneficially Owned Before this Offering (1) | Shares of Common Stock Being Offered in this Offering | Shares of Common Stock Owned After this Offering (2) | Percentage of Common Stock Beneficially Owned After this Offering (3) |
Joseph Regan
|
7,000
|
*
|
7,000
|
0
|
__
|
John J Resich Jr TTEE John J Resich Jr RET TRUST
|
5,833
|
*
|
5,833
|
0
|
__
|
David Frank Rios & Margaret Jo Rios 1999 Trust Dtd 6/22/99
|
16,897
|
*
|
12,500
|
4,397
|
*
|
Angel Rosario And Leticia Rosario JTWROS
|
4,000
|
*
|
4,000
|
0
|
*
|
Allan Rubinstein
|
4,166
|
*
|
4,166
|
0
|
*
|
Claudia A Ruggiero Family Trust UAD 09/26/90 Claudia Taglich TTEE
|
20,000
|
*
|
20,000
|
0
|
*
|
Thomas L Ryan
|
2,000
|
*
|
2,000
|
0
|
__
|
Nina B Sando
|
8,334
|
*
|
8,334
|
0
|
__
|
Jeffrey L Sadar & Barbara A Sadar JTWROS
|
11,000
|
*
|
5,000
|
0
|
__
|
IRA FBO Jeffrey L Sadar Pershing LLC as Custodian Rollover Account
|
11,000
|
*
|
3,000
|
0
|
__
|
IRA fbo Barbara A Sadar Pershing LLC as Custodian Rollover Account
|
11,000
|
*
|
3,000
|
0
|
__
|
Andrew M Schatz & Barbara F Wolf JTWROS
|
8,333
|
*
|
8,333
|
0
|
__
|
IRA fbo Keith R Schroeder Pershing LLC as Custodian Rollover Account
|
8,000
|
*
|
8,000
|
0
|
__
|
Scot Holding Inc. (Patrick Gordon)
|
3,000
|
*
|
3,000
|
0
|
__
|
Mark B Seiger
|
2,000
|
*
|
2,000
|
0
|
__
|
Shadow Capital LLC (Kent Garlinghouse)
|
129,912
|
2.27%
|
116,666
|
13,246
|
*
|
Allan F Shapiro
|
2,500
|
*
|
2,500
|
0
|
__
|
Diana Simich John Simich
|
5,000
|
*
|
5,000
|
0
|
__
|
Valdemar Skov
|
6,807
|
*
|
3,000
|
3,807
|
*
|
Michael L Smith
|
6,665
|
*
|
6,665
|
0
|
__
|
Rodney G Snow & Barbara M Snow JTWROS
|
2,500
|
*
|
2,500
|
0
|
__
|
Lucille Solomon
|
4,166
|
*
|
4,166
|
0
|
__
|
Spahr-Derebery Family Trust U A/D 10-11-90 Gregory E Spahr & M Jennifer Derebery TTEE
|
6,702
|
*
|
4,167
|
2,535
|
*
|
William Spielberger
|
4,941
|
*
|
3,332
|
1,609
|
*
|
Steric LLC (Peter Rosenthal)
|
8,333
|
*
|
8,333
|
0
|
__
|
Sterling Family Investment LLC (Arthur Sterling)
|
83,331
|
*
|
83,331
|
0
|
__
|
Selling Stockholder
|
Shares of
Common Stock
Owned
Before this
Offering
|
Percentage of Common Stock Beneficially Owned Before this Offering (1) | Shares of Common Stock Being Offered in this Offering | Shares of Common Stock Owned After this Offering (2) | Percentage of Common Stock Beneficially Owned After this Offering (3) |
SEP fbo John Stevens Pershing LLC as Custodian
|
2,500
|
*
|
2,500
|
0
|
__
|
Merle F Stockley Jr
|
3,500
|
1,871
|
1,629
|
*
|
|
William M Stokes or Rebecca A Stokes
JTWROS
|
1,000
|
*
|
1,000
|
0
|
__
|
Eugene Szczepanski
|
12,349
|
*
|
6,333
|
6,016
|
*
|
Nicholas Taglich & Juliana Taglich JT/WROS
|
6,000
|
*
|
6,000
|
0
|
__
|
Charles M Thompson
|
2,000
|
*
|
2,000
|
0
|
__
|
John S Tschohl TOD DTD 03/15/06
|
11,700
|
*
|
2,000
|
0
|
__
|
Patricia Tschohl TOD Dtd 05/04/06
|
11,700
|
*
|
9,700
|
0
|
__
|
Victor Microwave Co Inc. (Robert Parks)
|
3,333
|
*
|
3,333
|
0
|
__
|
The Thomas J Waggoner Marital Trust
|
15,000
|
*
|
15,000
|
0
|
__
|
Wafgal Limited (Bruce Campbell)
|
1,000
|
*
|
1,000
|
0
|
__
|
Paul R Winter
|
37,935
|
*
|
20,831
|
17,104
|
*
|
William Winters
|
6,000
|
*
|
6,000
|
0
|
__
|
George J White & Debra A White JT TEN WROS
|
3,000
|
*
|
3,000
|
0
|
__
|
Tad Wilson
|
2,500
|
*
|
2,500
|
0
|
__
|
John R Worthington Tr John R Worthington Trust U A Dated 3-28-00
|
18,817
|
*
|
15,000
|
0
|
__
|
Gerald Zobel TTEE Greta R Zobel Trust U A Dated 3-23-93
|
4,000
|
*
|
4,000
|
0
|
__
|
Option Holders:
|
|||||
Peter D. Rettaliata, President, CEO and Director
|
56,961
|
*
|
51,715
|
5,246 | * |
Dario Peragallo, President AIM
|
57,500
|
*
|
51,715
|
5,785 | * |
Gary Settoducato, President WMI
|
44,796
|
*
|
44,588
|
208 | * |
Seymour G. Siegel, Director
|
7,289
|
*
|
6,000
|
1,289 | * |
David Buonanno, Director
|
7,039
|
*
|
6,000
|
1,039 | * |
Michael Brand, Director
|
6,000
|
*
|
6,000
|
0 | - |
Scott A. Glassman, Chief Accounting Officer
|
12,205
|
*
|
12,167
|
38 | * |
Michael Recca
|
38,027
|
*
|
38,027
|
0 | - |
Paula Castellano
|
27,379
|
* |
27,379
|
0 | - |
Gregory Warren
|
18,252
|
* |
18,252
|
0 | - |
John Spiotta
|
10,648
|
* |
10,648
|
0 | - |
Robert Makaw
|
10,648
|
* |
10,648
|
0 | - |
George Moles
|
10,648
|
*
|
10,648
|
0
|
-
|
*
|
Represents less than 1%.
|
(1)
|
Based on 5,711,093 shares of common stock outstanding as of March 15, 2013.
|
(2)
|
Assumes that (i) all of the shares of common stock to be registered on the registration statement of which this prospectus is a part, including all shares of common stock issuable upon exercise of stock options granted to certain selling stockholders, are sold in the offering and (ii) that no other shares of common stock are acquired or sold by the selling stockholder prior to the completion of the offering. However, the selling stockholders may sell all, some or none of the shares offered pursuant to this prospectus and may sell other shares of our common stock that they may own pursuant to another registration statement under the Securities Act or sell some or all of their shares pursuant to an exemption from the registration provisions of the Securities Act, including under Rule 144.
|
(3)
|
Based on 6,004,880 shares of common stock, which includes the 293,787 shares of common stock issuable upon exercise of all of the stock options registered pursuant to this prospectus.
|
·
|
on any national securities exchange or quotation service on which the securities may be listed or quoted at the time of sale;
|
·
|
in the over-the-counter market;
|
·
|
in transactions otherwise than on these exchanges or systems or in the over-the-counter market;
|
·
|
through the writing or settlement of options, whether such options are listed on an options exchange or otherwise;
|
·
|
ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;
|
·
|
block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction;
|
·
|
purchases by a broker-dealer as principal and resale by the broker-dealer for its account;
|
·
|
an exchange distribution in accordance with the rules of the applicable exchange;
|
·
|
privately negotiated transactions;
|
·
|
settlement of short sales entered into after the effective date of the registration statement of which this prospectus is a part;
|
·
|
in transactions through broker-dealers that agree with the Selling Stockholders to sell a specified number of such shares at a stipulated price per share;
|
·
|
through the writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise;
|
·
|
a combination of any such methods of sale; or
|
·
|
any other method permitted pursuant to applicable law.
|
Page
|
|
Independent Auditors’ Report
|
F-1
|
Consolidated Balance Sheets
|
F-2
|
Consolidated Statements of Income
|
F-3
|
Consolidated Statements of Stockholders' Equity
|
F-4
|
Consolidated Statements of Cash Flows
|
F-5
|
Notes to Consolidated Financial Statements
|
F-6 – F-28
|
2012
|
2011
|
|||||||
ASSETS
|
||||||||
Current Assets
|
||||||||
Cash and Cash Equivalents
|
$ | 490,000 | $ | 577,000 | ||||
Accounts Receivable, Net of Allowance for Doubtful Accounts
of $705,000 and $950,000
|
11,631,000 | 6,042,000 | ||||||
Inventory
|
26,739,000 | 22,521,000 | ||||||
Prepaid Expenses and Other Current Assets
|
546,000 | 330,000 | ||||||
Deposits - Customers
|
133,000 | 2,000 | ||||||
Total Current Assets
|
39,539,000 | 29,472,000 | ||||||
Property and Equipment, net
|
5,883,000 | 3,971,000 | ||||||
Capitalized Engineering Costs - net of Accumulated Amortization
of $3,449,000 and $2,990,000
|
802,000 | 969,000 | ||||||
Deferred Financing Costs, net, deposit and other assets
|
590,000 | 671,000 | ||||||
Intangible Assets, net
|
5,889,000 | 1,607,000 | ||||||
Goodwill
|
453,000 | 291,000 | ||||||
TOTAL ASSETS
|
$ | 53,156,000 | $ | 36,981,000 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
||||||||
Current liabilities
|
||||||||
Notes Payable and Capitalized Lease Obligations - Current Portion
|
$ | 19,211,000 | $ | 14,055,000 | ||||
Accounts Payable and Accrued Expenses
|
7,077,000 | 7,432,000 | ||||||
Lease Impairment - Current
|
85,000 | 85,000 | ||||||
Deferred Gain on Sale - Current Portion
|
38,000 | 38,000 | ||||||
Income Taxes Payable
|
1,448,000 | 41,000 | ||||||
Total Current Liabilities
|
27,859,000 | 21,651,000 | ||||||
Long term liabilities
|
||||||||
Notes Payable and Capitalized Lease Obligation - Net of Current Portion
|
4,640,000 | 8,992,000 | ||||||
Lease Impairment - Net of Current Portion
|
127,000 | 175,000 | ||||||
Deferred Gain on Sale - Net of Current Portion
|
485,000 | 523,000 | ||||||
Deferred Rent
|
1,057,000 | 974,000 | ||||||
TOTAL LIABILITIES
|
34,168,000 | 32,315,000 | ||||||
Commitments and contingencies
|
||||||||
Stockholders' Equity
|
||||||||
Preferred Stock Par Value $.001-Authorized 8,003,716 shares
|
||||||||
Designated as Series "A" Convertible Preferred - $.001 par Value,
1,000 Shares Authorized 0 Shares issued and outstanding as of
December 31, 2012 and 2011, respectively.
|
- | - | ||||||
Designated as Series "B" Convertible Preferred -$.001 Par Value,
4,000,000 Shares Authorized, 0 shares issued
and outstanding as of December 31, 2012 and 2011,
respectively; Liquidation Value, $ 0
|
- | - | ||||||
Common Stock - $.001 Par, 20,000,000 Shares Authorized,
5,711,093 and 3,579,114 Shares Issued and Outstanding as of
December 31, 2012 and 2011, respectively
|
6,000 | 4,000 | ||||||
Additional Paid-In Capital
|
37,913,000 | 26,141,000 | ||||||
Accumulated Deficit
|
(18,931,000 | ) | (21,479,000 | ) | ||||
TOTAL STOCKHOLDERS' EQUITY
|
18,988,000 | 4,666,000 | ||||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
|
$ | 53,156,000 | $ | 36,981,000 |
2012
|
2011
|
|||||||
Net Sales
|
$ | 64,215,000 | $ | 53,745,000 | ||||
Cost of Sales
|
49,357,000 | 42,817,000 | ||||||
Gross Profit
|
14,858,000 | 10,928,000 | ||||||
Operating Expenses
|
8,874,000 | 6,549,000 | ||||||
Income from operations
|
5,984,000 | 4,379,000 | ||||||
Interest and financing costs
|
(1,843,000 | ) | (2,102,000 | ) | ||||
Other (expense) income, net
|
(146,000 | ) | 27,000 | |||||
Income before provision for income taxes
|
3,995,000 | 2,304,000 | ||||||
Provision for income taxes
|
1,447,000 | 57,000 | ||||||
Net income
|
$ | 2,548,000 | $ | 2,247,000 | ||||
Income per share - basic
|
$ | 0.54 | $ | 0.63 | ||||
Income per share - diluted
|
$ | 0.54 | $ | 0.63 | ||||
Weighted average shares outstanding - basic
|
4,680,581 | 3,579,114 | ||||||
Weighted average shares outstanding - diluted
|
4,759,246 | 3,579,254 |
Series A
|
Series B
|
Additional
|
Total
|
|||||||||||||||||||||||||||||||||
Preferred Stock
|
Preferred Stock
|
Common Stock
|
Paid-in
|
Accumulated
|
Stockholders'
|
|||||||||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
Shares
|
Amount
|
Capital
|
Deficit
|
Equity
|
||||||||||||||||||||||||||||
Balance, January 1, 2011
|
- | $ | - | - | $ | - | 3,579,114 | $ | 4,000 | $ | 26,010,000 | $ | (23,726,000 | ) | $ | 2,288,000 | ||||||||||||||||||||
Stock compensation expense
|
- | - | - | - | - | - | 131,000 | - | 131,000 | |||||||||||||||||||||||||||
Net income
|
- | - | - | - | - | - | - | 2,247,000 | 2,247,000 | |||||||||||||||||||||||||||
Balance, December 31, 2011
|
- | - | - | - | 3,579,114 | 4,000 | 26,141,000 | (21,479,000 | ) | 4,666,000 | ||||||||||||||||||||||||||
Issuance of Shares For Acquisition
|
- | - | - | - | 66,667 | - | 300,000 | - | 300,000 | |||||||||||||||||||||||||||
Issuance of Shares For Private Placement
|
- | - | - | - | 1,185,851 | 1,000 | 6,527,000 | - | 6,528,000 | |||||||||||||||||||||||||||
Issuance of Shares For conversion of Junior Subordinated Notes
|
- | - | - | - | 867,461 | 1,000 | 5,203,000 | - | 5,204,000 | |||||||||||||||||||||||||||
Issuance of Shares For Costs Associated with Private Placement
|
- | - | - | - | 12,000 | - | - | - | - | |||||||||||||||||||||||||||
Dividends Paid
|
- | - | - | - | - | - | (359,000 | ) | - | (359,000 | ) | |||||||||||||||||||||||||
Stock compensation expense
|
- | - | - | - | - | - | 101,000 | - | 101,000 | |||||||||||||||||||||||||||
Net income
|
- | - | - | - | - | - | - | 2,548,000 | 2,548,000 | |||||||||||||||||||||||||||
Balance, December 31, 2012
|
- | $ | - | - | $ | - | 5,711,093 | $ | 6,000 | $ | 37,913,000 | $ | (18,931,000 | ) | $ | 18,988,000 |
2012
|
2011
|
|||||||
CASH FLOWS FROM OPERATING ACTIVITIES
|
||||||||
Net Income
|
$ | 2,548,000 | $ | 2,247,000 | ||||
Adjustments to Reconcile Net Income to Net
|
||||||||
Cash provided by Operating Activities
|
||||||||
Depreciation of property and equipment
|
1,557,000 | 1,503,000 | ||||||
Amortization of intangible assets
|
693,000 | 168,000 | ||||||
Amortization of capitalized engineering costs
|
459,000 | 580,000 | ||||||
Bad debt expense
|
80,000 | 427,000 | ||||||
Non-cash compensation expense
|
101,000 | 131,000 | ||||||
Amortization of deferred financing costs
|
52,000 | 136,000 | ||||||
Gain on sale of real estate
|
(38,000 | ) | (38,000 | ) | ||||
Adjustments to Lease Impairment
|
53,000 | - | ||||||
Changes in Assets and Liabilities
|
||||||||
(Increase) Decrease in Operating Assets:
|
||||||||
Accounts Receivable
|
(4,606,000 | ) | (2,088,000 | ) | ||||
Inventory
|
1,136,000 | (1,078,000 | ) | |||||
Prepaid Expenses and Other Current Assets
|
(216,000 | ) | (123,000 | ) | ||||
Deposits
|
(132,000 | ) | 57,000 | |||||
Other Assets
|
51,000 | (87,000 | ) | |||||
Increase (Decrease) in Operating Liabilities
|
||||||||
Accounts payable and accrued expenses
|
(1,534,000 | ) | 1,567,000 | |||||
Deferred Rent
|
82,000 | 174,000 | ||||||
Income Taxes payable
|
1,408,000 | 57,000 | ||||||
NET CASH PROVIDED BY OPERATING ACTIVITIES
|
1,694,000 | 3,633,000 | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES
|
||||||||
Cash paid for acquisition
|
(11,600,000 | ) | - | |||||
Capitalized engineering costs
|
(292,000 | ) | (510,000 | ) | ||||
Purchase of property and equipment
|
(1,059,000 | ) | (778,000 | ) | ||||
Deposit for new property and equipment
|
(87,000 | ) | - | |||||
NET CASH USED IN INVESTING ACTIVITIES
|
(13,038,000 | ) | (1,288,000 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES
|
||||||||
Proceeds from Private Placement
|
7,115,000 | - | ||||||
Payment of Issuance costs for Private Placement
|
(587,000 | ) | - | |||||
Notes payable - Sellers
|
(601,000 | ) | (377,000 | ) | ||||
Capital lease obligations
|
(608,000 | ) | (398,000 | ) | ||||
Notes payable - Jr. Subordinated Debt
|
(115,000 | ) | (130,000 | ) | ||||
Notes payable - Revolver
|
4,787,000 | (284,000 | ) | |||||
Proceeds from notes payable - Term Loan PNC
|
3,900,000 | - | ||||||
Payments of notes payable - Term Loan PNC
|
(2,153,000 | ) | (1,000,000 | ) | ||||
Cash paid for deferred financing costs
|
(21,000 | ) | (20,000 | ) | ||||
Payments related to Lease Impairment
|
(101,000 | ) | (96,000 | ) | ||||
Dividends Paid
|
(359,000 | ) | - | |||||
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES
|
11,257,000 | (2,305,000 | ) | |||||
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS
|
(87,000 | ) | 40,000 | |||||
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR
|
577,000 | 537,000 | ||||||
CASH AND CASH EQUIVALENTS AT END OF YEAR
|
$ | 490,000 | $ | 577,000 | ||||
Supplemental cash flow information
|
||||||||
Cash paid during the year for interest
|
$ | 1,577,000 | $ | 1,895,000 | ||||
Supplemental cash flow information
|
||||||||
Cash paid during the year for income taxes
|
$ | 64,000 | $ | - | ||||
Supplemental schedule of non-cash investing and financing activities
|
||||||||
Junior Subordinated Debt Converted to Common Stock
|
$ | 5,204,000 | $ | - | ||||
Property and equipment acquired under capital lease
|
$ | 797,000 | $ | 827,000 | ||||
Purchase of substantially all assets of Nassau Tool Works, Inc and assumption
|
||||||||
of liabilities in the acquisition as follows:
|
||||||||
Fair Value of Tangible Assets acquired
|
$ | 7,941,000 | ||||||
Intangible assets, subject to amortization
|
4,975,000 | |||||||
Goodwill
|
162,000 | |||||||
Liabilities assumed
|
(660,000 | ) | ||||||
Due to Old Nassau Tool
|
(518,000 | ) | ||||||
Common Stock
|
(300,000 | ) | ||||||
Cash paid for acquisition
|
$ | 11,600,000 |
Fair Value of Tangible Assets acquired
|
$ | 7,941,000 | ||
Intangible assets, subject to amortization
|
4,975,000 | |||
Goodwill
|
162,000 | |||
Liabilities assumed
|
(660,000 | ) | ||
Total
|
$ | 12,418,000 |
1.
|
At closing, the Old Nassau Tool was paid $11,400,000.
|
2.
|
The issuance of 66,667 shares of common stock valued at $300,000.
|
3.
|
$200,000 paid in July after the release of a lien on certain property and equipment purchased.
|
4.
|
$518,000 to be paid as a working capital adjustment. See below.
|
·
|
The customer requests that the transaction be on a bill and hold basis. A customer must initiate the request for any bill and hold arrangement. Upon request for a bill and hold, the Company requires a signed letter from the customer upon which the customer specifically requests the bill and hold arrangement. Upon receipt of the letter, the Company begins its evaluation process to determine whether a bill and hold arrangement can be granted.
|
·
|
The customer has made a fixed commitment to purchase the goods to be on hold in written documentation. All customers’ orders are through firm written purchase orders.
|
·
|
The goods are segregated from other inventory and are not available to fill any other customers’ orders. The Company’s goods are made to customers’ or their customer’s specifications and could not be sold to others.
|
·
|
The risk of ownership has passed to the customer. The product is complete and ready for shipment. The earnings process is complete. An internal evaluation is made as to whether the product is complete and ready for shipment. This involves a review of the purchase order and a completed inspection process by the Company’s quality control department.
|
·
|
The date is determined by which the Company expects payment and the Company has not modified its normal billing and credit terms for this buyer. Payment is expected as if the goods had been shipped.
|
·
|
The customer has the expected risk of loss in the event of a decline in the market value of goods. All goods are made to firm purchase orders with fixed prices. Any decline in value would not affect the pricing of the goods. The Company has not at any point, agreed to a price reduction on a bill and hold arrangement.
|
Customer
|
Percentage of Sales
|
|||||||
2012
|
2011
|
|||||||
1
|
27.6 | 44.4 | ||||||
2
|
26.3 | 19.2 | ||||||
3
|
11.4 | 11.9 |
Customer
|
Percentage of Receivables
|
|||||||
December
|
December
|
|||||||
2012
|
2011
|
|||||||
1
|
25.3 | 26.2 | ||||||
2
|
18.6 | 12.9 | ||||||
3
|
10.7 | 18.3 | ||||||
4
|
* | 13.3 | ||||||
5
|
* | 11.5 |
2012
|
2011
|
|||||||
Weighted average shares outstanding used to compute basic earning per share
|
4,680,581 | 3,579,114 | ||||||
Effect of dilutive stock options and warrants
|
78,665 | 140 | ||||||
Weighted average shares outstanding and dilutive securities used to compute dilutive earnings per share
|
4,759,246 | 3,579,254 |
December 31,
|
||||||||
2012
|
2011
|
|||||||
Stock Options
|
11,948 | 291,316 | ||||||
Warrants
|
118,835 | 19,865 | ||||||
130,783 | 311,181 |
December 31,
|
December 31,
|
|||||||
2012
|
2011
|
|||||||
Accounts Receivable Gross
|
$ | 12,336,000 | $ | 6,992,000 | ||||
Allowance for Doubtful Accounts
|
(705,000 | ) | (950,000 | ) | ||||
Accounts Receivable Net
|
$ | 11,631,000 | $ | 6,042,000 |
Balance at
|
Charged to Costs
|
Deductions From
|
Balance at End of
|
|||||||||||||
Beginning of Year
|
and Expenses
|
Reserves
|
Year
|
|||||||||||||
Year ended December 31, 2012
|
||||||||||||||||
Allowance for Doubtful Accounts
|
$ | 950,000 | $ | 262,000 | $ | 507,000 | $ | 705,000 | ||||||||
Year ended December 31, 2011
|
||||||||||||||||
Allowance for Doubtful Accounts
|
$ | 523,000 | $ | 427,000 | $ | - | $ | 950,000 |
December 31,
|
December 31,
|
|||||||
2012
|
2011
|
|||||||
Raw Materials
|
$ | 6,105,000 | $ | 5,209,000 | ||||
Work In Progress
|
16,730,000 | 12,094,000 | ||||||
Finished Goods
|
6,653,000 | 7,021,000 | ||||||
Progress Payments Received
|
(525,000 | ) | - | |||||
Inventory Reserve
|
(2,224,000 | ) | (1,803,000 | ) | ||||
Total Inventory
|
$ | 26,739,000 | $ | 22,521,000 |
December 31,
|
December 31,
|
||||||||
2012
|
2011
|
||||||||
Machinery and Equipment
|
$ | 5,801,000 | $ | 3,700,000 |
5 - 8 years
|
||||
Capital Lease Machinery and Equipment
|
4,503,000 | 3,877,000 |
5 - 8 years
|
||||||
Tools and Instruments
|
3,968,000 | 3,417,000 |
1.5 - 7 years
|
||||||
Automotive Equipment
|
55,000 | 55,000 |
5 years
|
||||||
Furniture and Fixtures
|
232,000 | 219,000 |
5 - 8 years
|
||||||
Leasehold Improvements
|
612,000 | 595,000 |
Term of Lease
|
||||||
Computers and Software
|
318,000 | 158,000 |
4-6 years
|
||||||
Total Property and Equipment
|
15,489,000 | 12,021,000 | |||||||
Less: Accumulated Depreciation
|
(9,606,000 | ) | (8,050,000 | ) | |||||
Property and Equipment, net
|
$ | 5,883,000 | $ | 3,971,000 |
December 31,
|
December 31,
|
||||||||
2012
|
2011
|
||||||||
Customer Relationships
|
$ | 5,815,000 | $ | 890,000 |
5 to 14 years
|
||||
Trade Names
|
770,000 | 770,000 |
20 years
|
||||||
Technical Know-how
|
660,000 | 660,000 |
10 years
|
||||||
Non-Compete
|
50,000 | - |
5 years
|
||||||
Professional Certifications
|
15,000 | 15,000 |
.25 to 2 years
|
||||||
Total Intangible Assets
|
7,310,000 | 2,335,000 | |||||||
Less: Accumulated Amortization
|
(1,421,000 | ) | (728,000 | ) | |||||
Intangible Assets, net
|
$ | 5,889,000 | $ | 1,607,000 |
For the year ending
|
Amount
|
|||
December 31, 2013
|
$ | 1,163,000 | ||
December 31, 2014
|
1,163,000 | |||
December 31, 2015
|
1,163,000 | |||
December 31, 2016
|
1,163,000 | |||
December 31, 2017
|
616,000 | |||
Thereafter
|
621,000 | |||
Total
|
$ | 5,889,000 | ||
December 31,
|
December 31,
|
|||||||
2012
|
2011
|
|||||||
Revolving credit notes payable to PNC Bank N.A. ("PNC") and
|
||||||||
secured by substantially all assets
|
$ | 15,667,000 | $ | 10,880,000 | ||||
Term loan, PNC
|
3,748,000 | 2,000,000 | ||||||
Capital lease obligations
|
2,060,000 | 1,871,000 | ||||||
Notes payable to sellers of acquired business
|
1,376,000 | 1,976,000 | ||||||
Junior subordinated notes
|
1,000,000 | 6,320,000 | ||||||
Subtotal
|
23,851,000 | 23,047,000 | ||||||
Less: Current portion of notes and capital obligations
|
(19,211,000 | ) | (14,055,000 | ) | ||||
Notes payable and capital lease obligations, net of current portion
|
$ | 4,640,000 | $ | 8,992,000 |
(i)
|
|
a $18,000,000 revolving loan (includes inventory sub-limit of $12,250,000) and
|
(ii)
|
|
a $5,400,000 term loan.
|
For the year ending
|
Amount
|
|||
December 31, 2013
|
$ | 2,143,000 | ||
December 31, 2014
|
1,605,000 | |||
PNC Term Loan Payable
|
3,748,000 | |||
Less: Current portion
|
(2,143,000 | ) | ||
Long-term portion
|
$ | 1,605,000 |
For the year ending
|
Amount
|
|||
December 31, 2013
|
$ | 900,000 | ||
December 31, 2014
|
613,000 | |||
December 31, 2015
|
397,000 | |||
December 30, 2016
|
293,000 | |||
December 31, 2017
|
142,000 | |||
Total future minimum lease payments
|
2,345,000 | |||
Less: imputed interest
|
(285,000 | ) | ||
Less: current portion
|
(757,000 | ) | ||
Total Long Term Portion
|
$ | 1,303,000 |
December 31,
|
December 31,
|
|||||||
2012
|
2011
|
|||||||
Former Welding Stockholders
|
$ | 1,376,000 | $ | 1,976,000 | ||||
Less: Current Portion
|
(644,000 | ) | (601,000 | ) | ||||
Total long-term portion
|
$ | 732,000 | $ | 1,375,000 |
For the year ending
|
Amount
|
|||
December 31, 2013
|
$ | 644,000 | ||
December 31, 2014
|
691,000 | |||
December 31, 2015
|
41,000 | |||
Former WMI Stockholders Notes Payable
|
1,376,000 | |||
Less: Current portion
|
(644,000 | ) | ||
Long-term portion
|
$ | 732,000 |
December 31,
|
December 31,
|
|||||||
2012
|
2011
|
|||||||
Accounts Payable
|
$ | 5,713,000 | $ | 6,553,000 | ||||
Accrued Expenses
|
697,000 | 497,000 | ||||||
Due to Old Nassau Tool
|
411,000 | - | ||||||
Accrued Interest
|
138,000 | 169,000 | ||||||
Accrued Payroll
|
99,000 | 178,000 | ||||||
401K payable
|
19,000 | 35,000 | ||||||
$ | 7,077,000 | $ | 7,432,000 |
Plant Avenue
|
Fifth Avenue
|
Lamar Street
|
||||||||||||||
For the year ending
|
Annual Rent
|
Annual Rent
|
Annual Rent
|
Total Rents
|
||||||||||||
December 31, 2013
|
$ | 596,000 | $ | 644,000 | $ | 360,000 | $ | 1,600,000 | ||||||||
December 31, 2014
|
614,000 | 664,000 | 360,000 | $ | 1,638,000 | |||||||||||
December 31, 2015
|
633,000 | 684,000 | 360,000 | $ | 1,677,000 | |||||||||||
December 31, 2016
|
- | 704,000 | 360,000 | $ | 1,064,000 | |||||||||||
December 31, 2017
|
- | 725,000 | 360,000 | $ | 1,085,000 | |||||||||||
Thereafter
|
- | 7,348,000 | 300,000 | $ | 7,648,000 | |||||||||||
Total Rents
|
$ | 1,843,000 | $ | 10,769,000 | $ | 2,100,000 | $ | 14,712,000 |
For the year ending
|
Amount
|
|||
December 31, 2013
|
$ | 85,000 | ||
December 31, 2014
|
71,000 | |||
December 31, 2015
|
56,000 | |||
Total future minimum lease payments
|
212,000 | |||
Less: current portion
|
(85,000 | ) | ||
Total Long-Term Portion
|
$ | 127,000 |
2012
|
2011
|
|||||||
Current
|
||||||||
Federal
|
$ | 1,093,000 | $ | - | ||||
Federal AMT
|
- | 57,000 | ||||||
State
|
354,000 | - | ||||||
Total Expense
|
1,447,000 | 57,000 | ||||||
Deferred
|
||||||||
Federal
|
- | - | ||||||
State
|
- | - | ||||||
Total Deferred Taxes
|
- | - | ||||||
Net Expense for Income Taxes
|
$ | 1,447,000 | $ | 57,000 |
2012
|
2011
|
|||||||
Federal Tax Rate
|
34 | % | 34 | % | ||||
Effect of State taxes
|
8 | % | 6 | % | ||||
Net Operating Loss Carry Forward
|
-9 | % | -40 | % | ||||
Federal AMT
|
- | 2 | % | |||||
Others
|
3 | % | - | |||||
Total
|
36 | % | 2 | % |
December 31,
|
December 31,
|
|||||||
2012
|
2011
|
|||||||
Deferred tax assets:
|
||||||||
Net operating loss carry forwards
|
$ | - | $ | 289,000 | ||||
Capital loss carry forwards
|
1,088,000 | 1,088,000 | ||||||
Bad debts
|
282,000 | 380,000 | ||||||
Stock based compensation - options and restricted stock
|
506,000 | 466,000 | ||||||
Capitalized engineering costs
|
447,000 | 356,000 | ||||||
Account payable, accrued expenses and reserves
|
9,000 | 9,000 | ||||||
Deferred rent
|
423,000 | 390,000 | ||||||
Amortization - NTW Transaction
|
138,000 | - | ||||||
Inventory - 263A adjustment
|
569,000 | - | ||||||
Lease Impairment
|
85,000 | - | ||||||
Deferred gain on sale of real estate
|
209,000 | 224,000 | ||||||
Section 1231 loss carryover
|
86,000 | 86,000 | ||||||
Total deferred tax assets before valuation allowance
|
3,842,000 | 3,288,000 | ||||||
Valuation allowance
|
(2,269,000 | ) | (1,217,000 | ) | ||||
Total deferred tax assets after valuation allowance
|
1,573,000 | 2,071,000 | ||||||
Deferred tax liabilities:
|
||||||||
Property and equipment
|
(997,000 | ) | (801,000 | ) | ||||
Amortization - Welding Transaction
|
(576,000 | ) | (643,000 | ) | ||||
Inventory - 263A adjustment
|
- | (627,000 | ) | |||||
Total Deferred Tax Liability
|
(1,573,000 | ) | (2,071,000 | ) | ||||
Net deferred tax asset
|
$ | - | $ | - |
2012
|
2011
|
|||||||
Risk-free interest rates
|
0.66 - 0.73 | % | 1.80 | % | ||||
Expected life
|
5 | 5 | ||||||
Expected volatility
|
25 | % | 25 | % | ||||
Dividend yield
|
- | - | ||||||
Weighted-average grant date fair value per share
|
$ | 1.31 | $ | 0.76 |
Options
|
Wtd. Avg. Exercise Price
|
|||||||
Balance, December 31, 2010
|
291,431 | $ | 10.68 | |||||
Granted during the period
|
15,000 | 2.95 | ||||||
Exercised during the period
|
- | - | ||||||
Terminated/Expired during the period
|
(115 | ) | (105.39 | ) | ||||
Balance, December 31, 2011
|
306,316 | $ | 10.27 | |||||
Granted during the period
|
21,000 | 5.61 | ||||||
Exercised during the period
|
- | - | ||||||
Terminated/Expired during the period
|
- | - | ||||||
Balance, December 31, 2012
|
327,316 | $ | 9.97 | |||||
Exercisable at December 31, 2012
|
326,736 | $ | 10.00 |
Range of Exercise Prices
|
Remaining Number Outstanding
|
Wtd. Avg. Life
|
Wtd. Avg. Exercise Price
|
||||||
$0.00 - 5.00
|
293,766 |
3 years
|
$ | 4.41 | |||||
$5.01 - 90.00
|
19,350 |
5 years
|
$ | 11.72 | |||||
$90.01 - 100.00
|
5,888 |
2 years
|
$ | 92.18 | |||||
$100.01 - 110.00
|
833 |
1 years
|
$ | 108.00 | |||||
$110.01 - 170.00
|
3,529 |
1 years
|
$ | 111.89 | |||||
$170.01 - 200.00
|
3,950 |
2 years
|
$ | 181.00 | |||||
327,316 |
3 years
|
$ | 9.97 |
Warrants
|
Wtd. Avg. Exercise Price
|
|||||||
Balance, December 31, 2010
|
19,865 | $ | 99.26 | |||||
Granted during the period
|
- | - | ||||||
Exercised during the period
|
- | - | ||||||
Terminated/Expired during the period
|
- | - | ||||||
Balance, December 31, 2011
|
19,865 | $ | 99.26 | |||||
Granted during the period
|
118,585 | 6.30 | ||||||
Exercised during the period
|
- | - | ||||||
Terminated/Expired during the period
|
(19,615 | ) | 99.97 | |||||
Balance, December 31, 2012
|
118,835 | $ | 6.38 | |||||
Exercisable at December 31, 2012
|
118,835 | $ | 6.38 |
Range of Exercise Prices
|
Warrants
|
Wtd. Avg. Life
|
Wtd. Avg. Exercise Price
|
||||||
$ 0.00 - 10.00
|
118,585 |
4 years
|
$ | 6.30 | |||||
$ 10.00 - 50.00
|
250 |
1 year
|
$ | 43.60 | |||||
118,835 |
1 year
|
$ | 6.38 |
Year Ended December 31,
|
|||||||||
2012
|
2011
|
||||||||
AIM
|
|||||||||
Net Sales
|
$ | 42,075,000 | $ | 42,668,000 | |||||
Gross Profit
|
8,218,000 | 8,013,000 | |||||||
Pre Tax Income
|
4,181,000 | 3,527,000 | |||||||
Assets
|
24,673,000 | 27,735,000 | |||||||
WMI
|
|||||||||
Net Sales
|
14,907,000 | 11,077,000 | |||||||
Gross Profit
|
4,030,000 | 2,915,000 | |||||||
Pre Tax Income
|
1,501,000 | 1,288,000 | |||||||
Assets
|
10,818,000 | 8,028,000 | |||||||
NTW
|
|||||||||
Net Sales
|
7,233,000 | - | |||||||
Gross Profit
|
2,610,000 | - | |||||||
Pre Tax Income
|
963,000 | - | |||||||
Assets
|
14,410,000 | - | |||||||
Corporate
|
|||||||||
Net Sales
|
- | - | |||||||
Gross Profit
|
- | - | |||||||
Pre Tax Loss
|
(2,650,000 | ) | (2,511,000 | ) | |||||
Assets
|
13,200,000 | 7,883,000 | |||||||
Consolidated
|
|||||||||
Net Sales
|
64,215,000 | 53,745,000 | |||||||
Gross Profit
|
14,858,000 | 10,928,000 | |||||||
Pre Tax Income
|
3,995,000 | 2,304,000 | |||||||
Provision for Taxes
|
1,447,000 | 57,000 | |||||||
Net Income
|
2,548,000 | 2,247,000 | |||||||
Elimination of Assets
|
(9,945,000 | ) | (6,665,000 | ) | |||||
Assets
|
53,156,000 | 36,981,000 |
SEC registration fee
|
$ | 1,570.33 | ||
Legal fees and expenses
|
12,500.00 | |||
Accounting fees and expenses
|
2,500.00 | |||
Miscellaneous expenses
|
4,000.00 | |||
Total
|
$ | 20,570.33 |
2.1
|
Debtor's Amended Plan of Reorganization (incorporated by reference to Exhibit 2.1 of Registrant's Current Report on Form 8-K filed January 14, 2005).
|
2.2
|
Merger Agreement, dated as of November 14, 2005, among Gales Industries Incorporated, two of its stockholders, Gales Industries Merger Sub, Inc., and Ashlin Development Corporation (incorporated herein by reference to Exhibit 10.1 of Registrant's Current Report on Form 8-K filed November 21, 2005).
|
3.1
|
Certificate of Incorporation of the Registrant (incorporated by reference to Exhibit 3.1 of Registrant's Current Report on Form 8-K filed February 15, 2006).
|
3.2
|
Certificate of Amendment to Certificate of Incorporation changing our corporate name (incorporated by reference to Exhibit 3.1 of Registrant's Current Report on Form 8-K filed July 2, 2009).
|
3.3
|
Certificate of Amendment to Certificate of Incorporation increasing the number of shares of our authorized capital stock (incorporated by reference to Exhibit 3.1 of the Registrant's Current Report on Form 8-K filed April 7, 2008).
|
3.4
|
Certificate of Designation (incorporated by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed April 18, 2007).
|
3.5
|
Certificate of Amendment of Certificate of Designation as filed with the Office of the Secretary of State of Delaware on October 16, 2009 (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed October 16, 2009).
|
3.6
|
Certificate of Amendment of Certificate of Designation as filed with the Office of the Secretary of State of Delaware on September 10, 2010 (incorporated by reference from Exhibit 3.6 to the Registrant's Registration Statement on Form 10 filed on October 2, 2012 (the “Form 10”)).
|
3.7
|
Certificate of Amendment to Certificate of Incorporation as filed with the Office of the Secretary of State of Delaware on September 20, 2010, as amended on September 29, 2012, providing for a 1 for 400 reverse stock split (incorporated by reference from Exhibit 3.7 to the Registrant's Form 10.)
|
3.8
|
By-Laws of the Registrant (incorporated by reference to Exhibit 3.2 of the Registrant's Current Report on Form 8-K filed February 15, 2006).
|
4.1
|
Form of Warrant Agreement dated as of December 31, 2008 between the Registrant and Taglich Brothers, Inc. (incorporated by reference to Exhibit 4.1 to the Registrant's Current Report on Form 8-K filed January 7, 2009).
|
5.1
|
Opinion of Eaton & Van Winkle LLP.
|
10.1
|
Stock Purchase Agreement, dated as of July 25, 2005, by and among Gales Industries Incorporated, Air Industries Machining, Corp., Luis Peragallo, Jorge Peragallo, Peter Rettaliata and Dario Peragallo (incorporated by reference to Exhibit 10.2 of the Registrant's Current Report on Form 8-K filed December 6, 2005.)
|
10.2
|
Contract of Sale, dated as of November 7, 2005, by and between DPPR Realty Corp. and Gales Industries Incorporated for the purchase of the property known as 1480 North Clinton Avenue, Bay Shore, NY (incorporated by reference to Exhibit 10.5 of the Registrant's Current Report on Form 8-K filed December 6, 2005).
|
10.3
|
Contract of Sale, dated as of November 7, 2005, by and between KPK Realty Corp. and Gales Industries Incorporated for the purchase of the property known as 1460 North Fifth Avenue and 1479 North Clinton Avenue, Bay Shore, NY (incorporated by reference to Exhibit 10.6 of the Registrant's Current Report on Form 8-K filed December 6, 2005).
|
10.4
|
2005 Stock Incentive Plan (incorporated by reference to Exhibit 10.14 of the Registrant's Current Report on Form 8-K filed December 6, 2005).
|
10.5 |
Revolving Credit, Term Loan, Equipment Line and Security Agreement, dated as of November 30, 2005, by and between Air Industries Machining, Corp., PNC Bank, National Association, as Lender, and PNC Bank, National Association, as Agent (incorporated by reference to Exhibit 10.19 of the Registrant's Current Report on Form 8-K filed December 6, 2005).
|
10.6
|
Mortgage and Security Agreement, dated as of November 30, 2005, by and between Air Industries Machining, Corp. and PNC Bank (incorporated by reference to Exhibit 10.20 of the Registrant's Current Report on Form 8-K filed December 6, 2005).
|
10.7 |
Long Term Agreement, dated as of August 18, 2000, between Air Industries Machining, Corp. and Sikorsky Aircraft Corporation (incorporated by reference to Exhibit 10.21 of the Registrant's Current Report on Form 8-K filed December 6, 2005).
|
10.8 |
Long Term Agreement, dated as of September 7, 2000, between Air Industries Machining, Corp. and Sikorsky Aircraft Corporation (incorporated by reference to Exhibit 10.22 of the Registrant's Current Report on Form 8-K filed December 6, 2005).
|
10.9
|
Stock Purchase Agreement, dated January 2, 2009, between Gales Industries Incorporated, Sigma Metals, Inc. ("Sigma Metals"), and George Elkins, Carole Tate and Joseph Coonan, the shareholders of Sigma Metals (incorporated by reference to Exhibit 10.01 of the Registrant's Current Report on Form 8-K filed January 2, 2009).
|
10.10 |
Form of Subscription Agreement (incorporated by reference to Exhibit 10.1 to the Registrant's Current Report filed on Form 8-K filed April 18, 2009).
|
10.11 |
Form of Promissory Note (incorporated by reference to Exhibit 10.2 to the Registrant's Current Report filed on Form 8-K filed April 18, 2009).
|
10.12
|
Stock Purchase Agreement, dated March 9, 2009, between Gales Industries Incorporated and John Gantt and Lugenia Gantt, the shareholders of Welding Metallurgy, Inc. (incorporated by reference to Exhibit 10.1 of the Registrant's Current Report on Form 8-K filed March 14, 2009).
|
10.13 |
Amendment No. 1 dated August 2, 2009 to the Stock Purchase Agreement, dated March 9, 2009, between Gales Industries Incorporated and John Gantt and Lugenia Gantt, the shareholders of Welding Metallurgy, Inc. (incorporated by reference to Exhibit 10.1 of Registrant's Current Report on Form 8-K/A filed August 3, 2009).
|
10.14 |
7% Promissory Note of Registrant in the principal amount of $2,000,000 in favor of John and Lugenia Gantt (incorporated by reference from the Registrant's Current Report on Form 8-K filed August 26, 2009).
|
10.15
|
Registration Rights Agreement dated as of August 24, 2009 by and among the Registrant and John and Lugenia Gantt (incorporated by reference from the Registrant's Current Report on Form 8-K filed August 26, 2009).
|
10.16
|
Amended and Restated Promissory Note dated as of August 26, 2009 payable to John John and Lugenia Gantt (the "Amended and Restated Gantt Note") (incorporated by reference from Exhibit 10.46 to the Registrant's Annual Report on Form 10-K for the year ended December 31, 2007 (the “2007 Form 10-K”)).
|
10.17 |
Amendment dated as of October 9, 2009 to Amended and Restated Gantt Note (incorporated by reference from Exhibit 10.47 to the Registrant's 2007 Form 10-K).
|
10.18 |
Loan and Security Agreement dated as of August 24, 2009 among Air Industries Machining, Corp., Sigma Metals, Inc., Welding Metallurgy, Inc. and Steel City Capital Funding LLC. (incorporated by reference from the Registrant's Current Report on Form 8-K filed August 26, 2009).
|
10.19 |
Eighteenth Amendment to the Revolving Credit, Term Loan and Security Agreement dated as of November 30, 2005 with the financial institutions named therein (the "Lenders") and PNC Bank N.A., as agent for the Lenders, as amended. (incorporated by reference from Exhibit 10.19 to the Registrant's Form 10)
|
10.20 |
Securities Purchase Agreement for sale of junior subordinated notes and series B convertible preferred stock (incorporated by reference to Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed October 7, 2010).
|
10.21 |
Junior Subordinated Note due 2010 (incorporated by reference to Exhibit 10.2 to the Registrant's Current Report on Form 8-K filed October 7, 2010).
|
10.22
|
Asset Purchase Agreement dated as of June 20, 2012 among the Registrant, Nassau Tool Works, Inc., Vincent DiCarlo and Robert E. Hunt (incorporated by reference to Exhibit 10.22 to the Registrant's Form 10).
|
10.23
|
Assignment and Assumption Agreement dated as of June 20, 2012 between the Registrant and NTW Operating Inc. (incorporated by reference to Exhibit 10.23 to the Registrant's Form 10).
|
10.24 |
2010 Equity Incentive Plan (incorporated by reference to Exhibit 10.24 to the Registrant's Form 10).
|
10.25 |
Subscription documents for purchase of common stock and conversion of junior subordinated notes into common stock. (incorporated by reference to Exhibit 10.25 to the Registrant's Form 10).
|
10.26 |
Placement Agent Agreement dated as of May 21, 2012 between the Registrant and Taglich Brothers Inc. (incorporated by reference to Exhibit 10.26 to the Registrant's Form 10).
|
14.1
|
Code of Ethics (incorporated by reference to Exhibit 14.1 to the Registrant's Registration Statement on Form SB-2 (Registration No. 333-144561) filed July 13, 2009 and declared effective July 27, 2009).
|
21.1 |
Subsidiaries (incorporated by reference to Exhibit 21.1 to the Registrant's Form 10).
|
23.1
|
Consent of Eaton & Van Winkle LLP (included in Exhibit 5.1)
|
23.2
|
Consent of Rotenberg Meril Solomon Bertiger & Guttilla, P.C.
|
24.1
|
Power of Attorney (included in signature page)
|
101.INS* |
XBRL Instance Document
|
101.SCH* |
XBRL Taxonomy Extension Schema Document
|
101.CAL* |
XBRL Taxonomy Extension Calculation Linkbase Document
|
101.DEF* |
XBRL Taxonomy Extension Definition Linkbase Document
|
101.LAB* |
XBRL Taxonomy Extension Label Linkbase Document
|
101.PRE* |
XBRL Taxonomy Extension Presentation Linkbase Document
|
___
* Users of this data are advised pursuant to Rule 406T of Regulation S-T that this interactive data file is deemed not filed or part of a registration statement or prospectus for purposes of sections 11 or 12 of the Securities Act of 1933, is deemed not filed for purposes of section 18 of the Securities Exchange Act of 1934, and otherwise is not subject to liability under these sections.
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AIR INDUSTRIES GROUP, INC.
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By:
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/s/ Peter D. Rettaliata
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Peter D. Rettaliata
|
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President and Chief Executive Officer (Principal Executive
Officer)
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||
|
By:
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/s/ Scott A. Glassman
|
Scott A. Glassman
|
||
Chief Accounting Officer (Principal Financial and Accounting
Officer)
|
Signature
|
Capacity
|
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/s/ Peter D. Rettaliata
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Peter D. Rettaliata
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President, CEO and a Director
|
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/s/ Michael N. Taglich
|
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Michael N. Taglich
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Chairman of the Board
|
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/s/ Seymour G. Siegel
|
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Seymour G. Siegel
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Director
|
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/s/ Robert F. Taglich
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Robert F. Taglich
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Director
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/s/ David J. Buonanno
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David J. Buonanno
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Director
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/s/ Robert Schroeder
|
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Robert Schroeder
|
Director
|
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/s/ Michael Brand
|
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Michael Brand
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Director
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Very truly yours,
/s/ Eaton & Van Winkle LLP
|
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details)
|
12 Months Ended | |
---|---|---|
Dec. 31, 2012
|
Dec. 31, 2011
|
|
Summary Of Significant Accounting Policies Details | ||
1 | 27.60% | 44.40% |
2 | 26.30% | 19.20% |
3 | 11.40% | 11.90% |
9. NOTES PAYABLE AND CAPITAL LEASE OBLIGATIONS (Details 1) (USD $)
|
Dec. 31, 2012
|
---|---|
Notes Payable And Capital Lease Obligations Details 1 | |
December 31, 2013 | $ 2,143,000 |
December 31, 2014 | 1,605,000 |
PNC Term Loan Payable | 3,748,000 |
Less: Current portion | (2,143,000) |
Long-term portion | $ 1,605,000 |
6. PROPERTY AND EQUIPMENT (Details Narrative) (USD $)
|
12 Months Ended | |
---|---|---|
Dec. 31, 2012
|
Dec. 31, 2011
|
|
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 1,557,000 | $ 1,503,000 |
9. NOTES PAYABLE AND CAPITAL LEASE OBLIGATIONS (Details 2) (USD $)
|
Dec. 31, 2012
|
---|---|
Notes Payable And Capital Lease Obligations Details 2 | |
December 31, 2013 | $ 900,000 |
December 31, 2014 | 613,000 |
December 31, 2015 | 397,000 |
December 31, 2016 | 293,000 |
December 31, 2017 | 142,000 |
Total future minimum lease payments | 2,345,000 |
Less: imputed interest | (285,000) |
Less: current portion | (757,000) |
Total Long Term Portion | $ 1,303,000 |
5. INVENTORY (Details) (USD $)
|
Dec. 31, 2012
|
Dec. 31, 2011
|
---|---|---|
Inventory Details | ||
Raw Materials | $ 6,105,000 | $ 5,209,000 |
Work In Progress | 16,730,000 | 12,094,000 |
Finished Goods | 6,653,000 | 7,021,000 |
Progress Payments Received | (525,000) | |
Inventory Reserve | (2,224,000) | (1,803,000) |
Total Inventory | $ 26,739,000 | $ 22,521,000 |
13. COMMITMENTS AND CONTINGENCIES (Tables)
|
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2012
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Commitments And Contingencies Tables | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Future minimum lease payments | As of December 31, 2012, the aggregate future minimum lease payments are as follows:
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Discontinued future cost | As of December 31, 2012, the estimated discounted future cost will be charged to expense as follows:
|
15. STOCK OPTIONS AND WARRANTS (Details Narrative) (USD $)
|
12 Months Ended | |
---|---|---|
Dec. 31, 2012
|
Dec. 31, 2011
|
|
Stock Options And Warrants Details Narrative | ||
Granted during the period, Options | 21,000 | 15,000 |
Stock compensation expense | $ 101,000 | $ 131,000 |
Unrecognized compensation cost related to non-vested stock option awards | 357 | |
Intrinsic value | $ 0 |
9. NOTES PAYABLE AND CAPITAL LEASE OBLIGATIONS (Details 4) (USD $)
|
Dec. 31, 2012
|
---|---|
Future minimum payments for the note payable to the former stockholders of Welding: | |
September 30, 2013 | $ 644,000 |
September 30, 2014 | 691,000 |
Septmeber 30, 2015 | 41,000 |
Former WMI Stockholders Notes Payable | 1,376,000 |
Less: Current portion | (644,000) |
Long-term portion | $ 732,000 |
15. STOCK OPTIONS AND WARRANTS (Details 3) (USD $)
|
12 Months Ended | |
---|---|---|
Dec. 31, 2012
|
Dec. 31, 2011
|
|
Granted during the period, Warrants | 21,000 | 15,000 |
Ending Balance | 327,316 | |
Ending Balance, Weighted-Average Exercise Price | $ 9.97 | |
Warrant
|
||
Begining Balance | 118,585 | 19,865 |
Granted during the period, Warrants | ||
Exercised during the period, Warrants | (19,615) | |
Terminated/Expired during the period, Warrants | 118,835 | |
Ending Balance | 118,835 | 118,585 |
Exercisable at December 31, 2012, Warrants | 118,835 | |
Begining Balance, Weighted-Average Exercise Price | $ 99.26 | 99.26 |
Granted during the period, Weighted-Average Exercise Price | $ 6.3 | |
Exercised during the period, Weighted-Average Exercise Price | ||
Terminated/Expired during the period, Weighted-Average Exercise Price | $ 99.97 | |
Ending Balance, Weighted-Average Exercise Price | $ 6.38 | 99.26 |
Exercisable at December 31, 2012, Weighted-Average Exercise Price | $ 6.38 |
2. ACQUISITION (Tables)
|
12 Months Ended | |||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2012
|
||||||||||||||||||||||||||
Acquisition Tables | ||||||||||||||||||||||||||
Purchase price allocation | The purchase price allocation is set forth below.
|
7. INTANGIBLE ASSETS (Details 1) (USD $)
|
Dec. 31, 2012
|
---|---|
Goodwill and Intangible Assets Disclosure [Abstract] | |
December 31, 2013 | $ 1,163,000 |
December 31, 2014 | 1,163,000 |
December 31, 2015 | 1,163,000 |
December 31, 2016 | 1,163,000 |
December 31, 2017 | 616,000 |
Thereafter | 621,000 |
Total | $ 5,889,000 |
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 3)
|
Dec. 31, 2012
|
Dec. 31, 2011
|
---|---|---|
Summary Of Significant Accounting Policies Details 3 | ||
Stock Options | 11,948 | 291,316 |
Warrants | 118,835 | 19,865 |
Anti dilutive Securities | 130,783 | 311,181 |
2. ACQUISITION (Details) (USD $)
|
12 Months Ended | |
---|---|---|
Dec. 31, 2012
|
Dec. 31, 2011
|
|
Acquisition Details | ||
Fair Value of Tangible Assets acquired | $ 7,941,000 | |
Intangible assets, subject to amortization | 4,975,000 | |
Goodwill | 162,000 | |
Liabilities assumed | (660,000) | |
Total | $ 12,418,000 |
8. SALE AND LEASEBACK TRANSACTION (Details Narrative) (USD $)
|
Dec. 31, 2012
|
Dec. 31, 2011
|
---|---|---|
Sale And Leaseback Transaction Details Narrative | ||
Unrecognized portion of the Sale and Leaseback gain | $ 523,000 | $ 561,000 |
14. INCOME TAXES (Details Narrative) (USD $)
|
Dec. 31, 2012
|
Dec. 31, 2011
|
---|---|---|
Income Taxes Details Narrative | ||
Valuation allowance | $ 2,269,000 | $ 1,217,000 |
Income tax penalty expense | $ 22,000 | $ 0 |
13. COMMITMENTS AND CONTINGENCIES (Details) (USD $)
|
Dec. 31, 2012
|
---|---|
December 31, 2013 | $ 1,600,000 |
December 31, 2014 | 1,638,000 |
December 31, 2015 | 1,677,000 |
December 31, 2016 | 1,064,000 |
December 31, 2017 | 1,085,000 |
Thereafter | 7,648,000 |
Total Rents | 14,712,000 |
Plant Avenue Annual Rent
|
|
December 31, 2013 | 596,000 |
December 31, 2014 | 614,000 |
December 31, 2015 | 633,000 |
December 31, 2016 | |
December 31, 2017 | |
Thereafter | |
Total Rents | 1,843,000 |
Fifth Avenue Annual Rent
|
|
December 31, 2013 | 644,000 |
December 31, 2014 | 664,000 |
December 31, 2015 | 684,000 |
December 31, 2016 | 704,000 |
December 31, 2017 | 725,000 |
Thereafter | 7,348,000 |
Total Rents | 10,769,000 |
Lamar Street Annual Rent
|
|
December 31, 2013 | 360,000 |
December 31, 2014 | 360,000 |
December 31, 2015 | 360,000 |
December 31, 2016 | 360,000 |
December 31, 2017 | 360,000 |
Thereafter | 300,000 |
Total Rents | $ 2,100,000 |
6. PROPERTY AND EQUIPMENT (Details) (USD $)
|
Dec. 31, 2012
|
Dec. 31, 2011
|
---|---|---|
Property And Equipment Details | ||
Machinery and Equipment (5 - 8 years) | $ 5,801,000 | $ 3,700,000 |
Capital Lease Machinery and Equipment (5 - 8 years) | 4,503,000 | 3,877,000 |
Tools and Instruments (1.5 - 7 years) | 3,968,000 | 3,417,000 |
Automotive Equipment (5 years) | 55,000 | 55,000 |
Furniture and Fixtures (5 - 8 years) | 232,000 | 219,000 |
Leasehold Improvements (Term of Lease) | 612,000 | 595,000 |
Computers and Software (4-6 years) | 318,000 | 158,000 |
Total Property and Equipment | 15,489,000 | 12,021,000 |
Less: Accumulated Depreciation | (9,606,000) | (8,050,000) |
Property and Equipment, net | $ 5,883,000 | $ 3,971,000 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2012
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Note 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
Note 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principal Business Activity
The Company through its AIM subsidiary is primarily engaged in manufacturing aircraft structural parts, and assemblies for prime defense contractors in the aerospace industry in the United States. The Company's customers consist mainly of publicly- traded companies in the aerospace industry. Welding is a specialty welding and products provider whose significant customers include the world's largest aircraft manufacturers, subcontractors, and original equipment manufacturers. NTW is a manufacturer of aerospace components, principally landing gear for F-16 and F-18 fighter aircraft.
Principles of Consolidation
The accompanying consolidated financial statements include accounts of the Company and its wholly-owned subsidiaries. Significant intercompany accounts and transactions have been eliminated in consolidation.
Cash and Cash Equivalents
Cash and cash equivalents include all highly liquid instruments with an original maturity of three months or less.
Accounts Receivable
Accounts receivable are reported at their outstanding unpaid principal balances net of allowances for uncollectible accounts. The Company provides for allowances for uncollectible receivables based on management's estimate of uncollectible amounts considering age, collection history, and any other factors considered appropriate. The Company writes off accounts receivable against the allowance for doubtful accounts when a balance is determined to be uncollectible.
Inventory Valuation
The Company values inventory at the lower of cost on a first-in-first-out basis or market.
AIM generally purchases inventory only when it has non-cancellable orders from its customers for finished goods. Welding generally produces pursuant to customer orders and maintains relatively low inventory levels. AIM occasionally produces finished goods in excess of purchase order quantities in anticipation of future demand; historically this excess has been used in fulfilling future purchase orders. The Company periodically evaluates inventory items that are not secured by purchase orders and establishes reserves for obsolescence accordingly. The Company also reserves for excess quantities, slow-moving goods, and for other impairment of value.
The Company presents inventory net of progress billings in accordance with the specified contractual arrangements with the United States Government, which results in the transfer of title of the related inventory from the Company to the United States Government, when such progress payments are received.
Capitalized Engineering Cost
The Company has contractual agreements with customers to produce parts, which the customers design. Though the Company has not designed and thus has no proprietary ownership of the parts, the manufacturing of these parts requires pre-production engineering and programming of the Companys machines. The pre-production costs associated with a particular contract are capitalized and then amortized beginning with the first shipment of product pursuant to such contract. These costs are amortized on a straight line basis over the estimated length of the contract, or if shorter, three years.
If the Company is reimbursed for all or a portion of the pre-production expenses associated with a particular contract, only the unreimbursed portion would be capitalized. The Company may also progress bill customers for certain engineering costs being incurred. Such billings are recorded as progress billings (a reduction of the associated inventory) until the appropriate revenue recognition criteria have been met. The Terms and Conditions contained in customer purchase orders may provide for liquidated damages in the event that a stop-work order is issued prior to the final delivery of the product.
Property and Equipment
Property and equipment are carried at cost net of accumulated depreciation and amortization. Repair and maintenance charges are expensed as incurred. Property, equipment, and improvements are depreciated using the straight-line method over the estimated useful lives of the assets or the particular improvements. Expenditures for repairs and improvements in excess of $1,000 that add to the productive capacity or extend the useful life of an asset are capitalized. Upon disposition, the cost and related accumulated depreciation are removed from the accounts and any related gain or loss is reflected in earnings.
Long-Lived and Intangible Assets
Identifiable intangible assets are amortized using the straight-line method over the period of expected benefit.
Long-lived assets and intangible assets subject to amortization to be held and used are reviewed for impairment whenever events or changes in circumstances indicate that the related carrying amount may be impaired. The Company records an impairment loss if the undiscounted future cash flows are found to be less than the carrying amount of the asset. If an impairment loss has occurred, a charge is recorded to reduce the carrying amount of the asset to fair value. There has been no impairment as of December 31, 2012 and 2011.
Deferred Financing Costs
Costs incurred with obtaining and executing debt arrangements are capitalized and amortized using the effective interest method over the term of the related debt.
Revenue Recognition
The Company recognizes revenue in accordance with Staff Accounting Bulletin No. 104, "Revenue Recognition." The Company recognizes revenue when products are shipped and the customer takes ownership and assumes risk of loss, collection of the relevant receivable is probable, persuasive evidence of an arrangement exists, and the sales price is fixed or determinable.
The Company recognizes certain revenues under a bill and hold arrangement with one of its large customers. To determine whether revenue can be recognized under any bill and hold arrangement, the Company makes an evaluation as to whether the bill and hold arrangement qualifies for revenue recognition as follows:
Payments received in advance from customers for products delivered are recorded as customer advance payments until earned, at which time revenue is recognized. The Terms and Conditions contained in our customer purchase orders often provide for liquidated damages in the event that a stop work order is issued prior to the final delivery. The Company utilizes a Returned Merchandise Authorization or RMA process for determining whether to accept returned products. Customer requests to return products are reviewed by the contracts department and if the request is approved, a credit is issued upon receipt of the product. Net sales represent gross sales less returns and allowances.
Use of Estimates
In preparing the financial statements, management is required to make estimates and assumptions that affect the reported amounts in the financial statements and accompanying notes. The more significant management estimates are the useful lives of property and equipment, provisions for inventory obsolescence, accrued expenses and various contingencies. Actual results could differ from those estimates. Changes in facts and circumstances may result in revised estimates, which are recorded in the period in which they become known.
Credit and Concentration Risks
There were three customers that represented 65.3% and 75.5% of total sales for the years ended December 31, 2012 and 2011, respectively. This is set forth in the table below.
There were three customers that represented 54.6% of gross accounts receivable at December 31, 2012 and five customers that represented 82.2% of gross accounts receivable at December 31, 2011. This is set forth in the table below.
* Customer was less than 10% of receivables at December 31, 2012
During the year, the Company had occasionally maintained balances in its bank accounts that were in excess of the FDIC limit. The Company has not experienced any losses on these accounts.
AIM has several key sole-source suppliers of various parts that are important for one or more of our products. These suppliers are our only source for such parts and, therefore, in the event any of them were to go out of business or be unable to provide us parts for any reason, our business could be severely harmed.
Income Taxes
The Company accounts for income taxes in accordance with accounting guidance now codified as FASB ASC 740, "Income Taxes," which requires that the Company recognize deferred tax liabilities and assets based on the differences between the financial statement carrying amounts and the tax bases of assets and liabilities, using enacted tax rates in effect in the years the differences are expected to reverse. Deferred income tax benefit (expense) results from the change in net deferred tax assets or deferred tax liabilities. A valuation allowance is recorded when it is more likely than not that some or all deferred tax assets will not be realized.
The Company has adopted the provisions of FASB ASC 740-10-05 "Accounting for Uncertainty in Income Taxes." The ASC clarifies the accounting for uncertainty in income taxes recognized in an enterprise's financial statements. The ASC prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The ASC provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition.
Earnings per share
Basic earnings per share is computed by dividing the net income applicable to common stockholders by the weighted-average number of shares of common stock outstanding for the period. Potentially dilutive shares, using the treasury stock method, are included in the diluted per-share calculations for all periods when the effect of their inclusion is dilutive.
The following is a reconciliation of the denominators of basic and diluted earnings per share computations:
The following securities have been excluded from the calculation as their effect would be anti-dilutive:
Stock-Based Compensation
The Company accounts for stock-based compensation in accordance with FASB ASC 718, "Compensation Stock Compensation." Under the fair value recognition provision of the ASC, stock-based compensation cost is estimated at the grant date based on the fair value of the award. The Company estimates the fair value of stock options and warrants granted using the Black-Scholes-Merton option pricing model.
Goodwill
Goodwill represents the excess of the acquisition cost of businesses over the fair value of the identifiable net assets acquired. The goodwill amount of $453,000 relates to the acquisition of Welding ($291,000) and the NTW Acquisition ($162,000). Goodwill is not amortized, but is tested at least annually for impairment, or if circumstances change that will more likely than not reduce the fair value of the reporting unit below its carrying amount.
In September 2011, the FASB issued ASU 2011-08 (ASU 2011-08), Intangibles Goodwill and Other (Topic 350): Testing Goodwill for Impairment ASU 2011-08 updated the guidance on the periodic testing of goodwill for impairment. The updated guidance gives companies the option to perform a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. The amendment is intended to reduce the cost and complexity of the annual goodwill impairment test by providing entities an option to perform a qualitative assessment to determine whether further impairment testing is necessary. The update ASU 2011-08 is effective for fiscal years beginning after December 15, 2011 for public entities, with early adoption permitted. The Company adopted ASU 2011-08 effective October 1, 2011. The adoption did not have a material effect on the Companys financial position, results of operation or cash flows.
The Company performs impairment testing for goodwill annually, or more frequently when indicators of impairment exist. As discussed above, the Company adopted ASU 2011-08 and performed a qualitative assessment in the fourth quarter of 2012 to determine whether it was more likely than not that the fair value of Welding and NTW was less than its carrying amount.
The Company has determined that there has been no impairment of goodwill at December 31, 2012 and 2011.
Freight Out
Freight out is included in operating expenses and amounted to $82,000 and $90,000 for the years ended December 31, 2012 and 2011, respectively.
Recently Issued Accounting Pronouncements
The Company adopted ASU 2011-04 (ASU 2011-04), Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs (ASU 2011-04). ASU 2011-04 clarifies application of fair value measurement and disclosure requirements and was effective for annual periods beginning after December 15, 2011. The adoption of ASU 2011-04 did not have a material effect on the Companys financial position, results of operations or cash flows.
In February 2013, the FASB issued guidance requiring disclosure of amounts reclassified out of accumulated other comprehensive income by component. In addition, an entity is required to present either on the face of the statement of operations or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income but only if the amount reclassified is required to be reclassified to net income in its entirety in the same reporting period. For amounts not reclassified in their entirety to net income, an entity is required to cross-reference to other disclosures that provide additional detail about those amounts. This guidance is effective prospectively for the Company for annual and interim periods beginning January 1, 2013. The Company will comply with the disclosure requirements of this guidance for the quarter ending March 31, 2013.
The Company does not believe that any other recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying financial statements.
Reclassifications
Certain account balances in 2011 have been reclassified to conform with the current period presentation.
Subsequent Events
Management has evaluated subsequent events through the date of this filing.
|
13. COMMITMENTS AND CONTINGENCIES (Details 1) (USD $)
|
Dec. 31, 2012
|
Dec. 31, 2009
|
---|---|---|
Commitments And Contingencies Details 1 | ||
December 31, 2013 | $ 85,000 | |
December 31, 2014 | 71,000 | |
December 31, 2015 | 56,000 | |
Total future minimum lease payments | 212,000 | |
Less: current portion | (85,000) | |
Total Long-Term Portion | $ 127,000 | $ 579,000 |
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