SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (date of earliest event reported):

July 7, 2017

AIR INDUSTRIES GROUP

(Exact Name of Registrant as Specified in its Charter)

360 Motor Parkway, Suite 100, Hauppauge, NY 11788

(Address of Principal Executive Offices)

Registrant’s telephone number: (631) 881-4920

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

Item 1.01

Entry into a Material Definitive Agreement

On July 7, 2017, Air Industries Group (the “Company”) entered into an Underwriting Agreement with Roth Capital Partners, LLC, as representative of the underwriters listed on Schedule I annexed thereto (the “Underwriters”) for the offering on a firm commitment basis of up to 5,175,000 shares of common stock at an offering price of $1.50 share, including 675,000 shares of common stock upon the exercise in full of the over-allotment option granted to the Underwriters (the “Offering”). The Underwriting Agreement provides for an underwriting discount of 7% of the gross proceeds from the sale of the shares sold in the Offering.

The net proceeds from this Offering, after deducting underwriting discounts and commissions and estimated Offering expenses payable by us, are approximately $6.8 million. We intend to use the net proceeds from this offering to pay approximately $4 million of our outstanding trade payables, redeem approximately $543,501 of our outstanding convertible notes, and for general corporate purposes, including for working capital.

The Underwriting Agreement contains customary representations, warranties, covenants, agreements and indemnification obligations, including for liabilities under the Securities Act of 1933, as amended (the “Securities Act”). The representations, warranties, covenants and agreements contained in the Underwriting Agreement were made only for purposes of such agreement and as of specific dates, were solely for the benefit of the parties to such agreement, and may be subject to limitations agreed upon by the contracting parties.

The foregoing description of the Underwriting Agreement is not complete and is qualified in its entirety by reference to the full text of the Underwriting Agreement, which is filed as Exhibit 1.1 hereto and is incorporated herein by reference.

 

On July 12, 2017, the Company issued a total of 1,240,606 shares of common stock to holders of its Subordinated Convertible Notes due May 12, 2018 (the “May 2018 Notes”) upon conversion of $1,860,907 aggregate principal amount of May 2018 Notes upon the consummation of the Offering. The issuance of the shares was exempt from the registration requirements of the Securities Act pursuant to Section 3(a)(9) thereof. The certificates representing the shares were endorsed with the customary restrictive Securities Act legend.

 

On July 12, 2017, the Company filed an amendment to the certificate of designation authorizing the issuance of its Series A Convertible Preferred Stock (“Series A Preferred Stock”). The amendment provides for the automatic conversion of shares of Series A Preferred Stock into shares of common stock upon the consummation of the Offering at a conversion price of $1.50 per share, subject to receiving stockholder approval of such conversion in accordance with the applicable rules of the NYSE MKT. In addition, the amendment changes the liquidation preference and dividend rights of holders of Series A Preferred Stock to be on a pari passu basis with the Company’s common stock on an as converted basis based upon a conversion price of $4.92 per share. As a result of the consummation of the Offering, once stockholder approval has been obtained, the conversion price of the Series A Preferred Stock will automatically be reduced from $4.92 per share to $1.50 per share, which was the offering price of the shares of common stock in the Offering, and the conversion rate for each share of Series A Preferred Stock converted will be increased from 2.0325 shares of common stock to 6.6667 shares of common stock. The foregoing description of the Certificate of Amendment is not complete and is qualified in its entirety by reference to the full text of the Certificate of Amendment, which is filed as Exhibit 3.1 hereto and is incorporated herein by reference.

 

On July 12, 2017, the Company issued a press release announcing the closing of the Offering. A copy of the press release is included as Exhibit 99.1 to this report. The information in this Item 7.01 of this Form 8-K, including Exhibit 99.1 attached hereto, shall not be deemed as “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”), or otherwise subject to the liability of such Section, nor shall it be deemed incorporated by reference in any filing by us under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such filing, unless expressly incorporated by specific reference in such filing.

(d)          Exhibits.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated: July 12, 2017

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Section 1.      Definitions. The following definitions in this Certificate of Designation are hereby deleted.

Section 3. Rank is deleted in its entirety.

Section 4. Dividends is amended in its entirety to read as follows:

         “Holders of Series A Preferred Stock shall be entitled to receive dividends declared, paid or set aside in respect of the Common Stock on an as converted basis, ratably with the holders of the Common Stock.”

Section 5. Liquidation is amended in its entirety to read as follows:

          “Upon any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Company, the stockholders of the Company shall be entitled to be paid out of the assets of the Company legally available for distribution, after payment of or provision for the debts and other liabilities of the Company, such amounts as remain available for distribution to stockholders of the Company, and shall be distributed to the holders of the Common Stock and the holders of the Series A Preferred Stock, on an as converted basis, and such holders shall share ratably and on a pari passu basis in any such distribution of assets.”

Section 6.     Voting Rights.  Clause (c) of the second paragraph of this section is amended to delete the words “, unless such increase is necessary to pay PIK Dividends”

Section 7.     Conversion.  Section 7 bb) is amended in its entirety to read as follows:

 

bb)   “Automatic Conversion. Upon the consummation of a public offering of shares of Common Stock from which the Company receives  gross proceeds of at least $5,000,000 (a “Qualified Public Offering”), and subject to and only upon obtaining approval of the stockholders of the Company in accordance with the applicable rules of the Principal Market, without any  action on  the  part  of  the  Holders, the then outstanding shares  of  Series A Preferred Stock, including shares issued as pay-in kind dividends, shall automatically be converted into shares of Common Stock at a rate equal to the number of shares of Series A Preferred Stock being converted, multiplied by the Stated Value, divided by the price at which the shares of Common Stock are first sold to the public in that Qualified Public Offering (“Automatic Conversion”), and the Series A Preferred Stock will be deemed to no longer be outstanding as of the date of such Automatic Conversion.”

 

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