LEGAL PROCEEDINGS	6 Months Ended
Jun. 30, 2018
Legal Proceedings
LEGAL PROCEDDINGS	11. Legal Proceedings On March 21, 2018, the Company entered into a Stock Purchase Agreement (the “Agreement”) with Air Industries Group (“Air Industries”), pursuant to which, subject to the satisfaction or waiver of certain conditions, the Company would purchase from Air Industries all of the shares (the “Shares”) of Welding Metallurgy, Inc. (“WMI”), a wholly owned subsidiary of Air Industries (the “Acquisition”). WMI is engaged in the manufacture of complex components and assemblies for the defense and commercial aircraft industries. Under the terms of the Agreement, the Company would pay a purchase price for the Shares as follows: (i) $9.0 million in cash, subject to adjustment based on the working capital of WMI at the closing of the Acquisition and (ii) up to an aggregate of $1.0 million, in two payments of up to $500,000 each (the “Contingent Payments”) if WMI enters into certain long-term supply agreements. The Contingent Payments are reduced if milestones for signing are not achieved. On July 5, 2018, we filed a complaint in the Supreme Court of the State of New York, County of New York, against Air Industries relating to the Agreement. The complaint alleges that Air Industries willfully breached its contractual obligation to provide financial information required to fulfill key conditions for closing under the Agreement. The Company is seeking, among other things, an order of specific performance requiring Air Industries to comply with its obligations under the Agreement, monetary damages, and attorneys’ fees and costs. On July 30, 2018, Air Industries filed its answer and counterclaims. Air Industries denied the allegations made by us in the complaint and alleged that we breached the Agreement and the covenant of good faith and fair dealing. Air Industries is seeking a declaration that the Agreement has terminated, along with monetary damages, attorneys’ fees, and costs. On July 31, 2018, we filed a motion for preliminary injunction against Air Industries. The motion argues that the failure by Air Industries to provide financial data and other information necessary to close on the Acquisition will cause irreparable injury to us. We are therefore seeking an order directing Air Industries to furnish us with all previously requested financial, operating, and other data and information relating to WMI. The court issued an order to show cause on August 1, 2018 and set August 13, 2018 as the hearing date with respect to the motion for preliminary injunction. Air Industries has not yet responded to the motion for preliminary injunction. For a discussion of the risks and uncertainties associated with this litigation and with the acquisition of WMI, please see Part II, Item 1A “Risk Factors” of this Quarterly Report on Form 10-Q. We remain committed to completing the Acquisition as soon as practicable, however, because of the risks and uncertainties, we cannot conclude that the consummation of the Acquisition is probable.

LEGAL PROCEEDINGS

6 Months Ended

Jun. 30, 2018

11. Legal Proceedings

On March 21, 2018, the Company entered into a Stock Purchase Agreement (the “Agreement”) with Air Industries Group (“Air Industries”), pursuant to which, subject to the satisfaction or waiver of certain conditions, the Company would purchase from Air Industries all of the shares (the “Shares”) of Welding Metallurgy, Inc. (“WMI”), a wholly owned subsidiary of Air Industries (the “Acquisition”). WMI is engaged in the manufacture of complex components and assemblies for the defense and commercial aircraft industries.

Under the terms of the Agreement, the Company would pay a purchase price for the Shares as follows: (i) $9.0 million in cash, subject to adjustment based on the working capital of WMI at the closing of the Acquisition and (ii) up to an aggregate of $1.0 million, in two payments of up to $500,000 each (the “Contingent Payments”) if WMI enters into certain long-term supply agreements. The Contingent Payments are reduced if milestones for signing are not achieved.

On July 5, 2018, we filed a complaint in the Supreme Court of the State of New York, County of New York, against Air Industries relating to the Agreement. The complaint alleges that Air Industries willfully breached its contractual obligation to provide financial information required to fulfill key conditions for closing under the Agreement. The Company is seeking, among other things, an order of specific performance requiring Air Industries to comply with its obligations under the Agreement, monetary damages, and attorneys’ fees and costs.

On July 30, 2018, Air Industries filed its answer and counterclaims. Air Industries denied the allegations made by us in the complaint and alleged that we breached the Agreement and the covenant of good faith and fair dealing. Air Industries is seeking a declaration that the Agreement has terminated, along with monetary damages, attorneys’ fees, and costs.

On July 31, 2018, we filed a motion for preliminary injunction against Air Industries. The motion argues that the failure by Air Industries to provide financial data and other information necessary to close on the Acquisition will cause irreparable injury to us. We are therefore seeking an order directing Air Industries to furnish us with all previously requested financial, operating, and other data and information relating to WMI. The court issued an order to show cause on August 1, 2018 and set August 13, 2018 as the hearing date with respect to the motion for preliminary injunction. Air Industries has not yet responded to the motion for preliminary injunction.

For a discussion of the risks and uncertainties associated with this litigation and with the acquisition of WMI, please see Part II, Item 1A “Risk Factors” of this Quarterly Report on Form 10-Q. We remain committed to completing the Acquisition as soon as practicable, however, because of the risks and uncertainties, we cannot conclude that the consummation of the Acquisition is probable.