SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (date of earliest event reported):
December 15, 2005
ASHLIN DEVELOPMENT CORPORATION
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(Exact Name of Registrant as Specified in its Charter)
Florida 000-29245 65-0452156
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State of Commission IRS Employer
Incorporation File Number I.D. Number
1479 North Clinton Avenue, Bay Shore, NY 11706
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Address of principal executive offices
Registrant's telephone number: (631) 968-5000
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(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
|_| Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
This Amended Current Report on Form 8-K/A amends Items 4.01 and Item 9.01
(Exhibit 16.1) contained in our Current Report on Form 8-K which was filed with
the Commission on December 21, 2005 (the "Original 8-K"). Item 3.02 contained in
the Original 8-K is not being amended and is set forth again in this report
without any changes.
Item 3.02 UNREGISTERED SALES OF EQUITY SECURITIES.
On December 15, 2005, Ashlin Development Corporation, a Florida
corporation ("we", "Ashlin" or the "Company"), privately issued 220.672 shares
of its Series A Convertible Preferred Stock, $.001 par value per share
("Preferred Stock"), to accredited investors (the "Second Closing"). We had
previously issued 679.328 shares of Preferred Stock as of November 30, 2005 (the
"First Closing") and such issuance and the transactions relating thereto were
reported in our Current Report on Form 8-K filed with the Commission on December
6, 2005.
In connection with the Second Closing, the gross purchase price of
$2,206,720 was paid by investors and, in connection with the First Closing, the
gross purchase price of $6,793,280 had been paid by investors. Together, in the
First Closing and the Second Closing, we issued 900 shares of Preferred Stock to
investors and the investors paid an aggregate purchase price of $9,000,000. Our
issuances of shares of Preferred Stock to investors in connection with the First
Closing and the Second Closing were in exchange for the cancellation of the same
number of shares of series A convertible preferred stock of Gales Industries
Incorporated, a privately-held Delaware corporation ("Gales"), which merged into
our wholly-owned subsidiary as of November 30, 2005 (the "Merger"). The
investors had acquired such shares of Gales preferred stock by paying Gales (and
its successor) the aggregate purchase price of $9,000,000 in connection with
Gales' private offering to accredited investors of up to 900 shares of its
series A convertible preferred stock, which offering was completed by Gales on
the date of the First Closing with respect to 679.328 shares of its preferred
stock and on the date of the Second Closing with respect to 220.672 shares of
its preferred stock. The terms of our Preferred Stock and Gales series A
convertible preferred stock are substantially the same.
The 220.672 shares of Preferred Stock which we issued in the Second
Closing (not taking into account additional shares of Preferred Stock issuable
to the investors as dividends) are convertible at any time, at the option of the
holders, into an aggregate of approximately 10,030,646 shares of our common
stock, $.001 par value per share ("Common Stock") (or 45,455 shares of Common
Stock for each share of Preferred Stock), and will automatically convert into
shares of Common Stock if and when a registration statement covering such shares
of Common Stock underlying the Preferred Stock is declared effective and such
shares thereby become available for resale under the Securities Act of 1933, as
amended.
In connection with the Second Closing, GunnAllen Financial, Inc. acted as
the placement agent and received: (i) a sales commission equal to 6%, and a
management fee equal to 4%, of the aggregate purchase price of the preferred
stock sold and (ii) a non-accountable expense allowance equal to 2% of the
aggregate purchase price of the preferred stock sold. In addition, the placement
agent received warrants, exercisable during a five-year term, to purchase the
number of shares of Common Stock (1,003,065 shares) equal to 10% of the number
of shares of Common Stock into which the Preferred Stock sold in the Second
Closing may be converted. Such warrants have a "cashless exercise" feature and
are exercisable at $0.22 per share.
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We believe that the issuances of our securities in connection with the
First Closing and the Second Closing were exempt from registration under Section
4(2) of the Securities Act of 1933, as amended.
Item 4.01 CHANGES IN REGISTRANT'S CETIFYING ACCOUNTANT.
(a) On December 15, 2005, the Company appointed the firm of
Goldstein Golub Kessler LLP ("GGK") as the Company's independent auditor and, as
of such date, dismissed the firm of Daszkal Bolton LLP ("DB"), which had been
serving as the Company's independent auditor up to such date. The change in
auditors is in connection with the Merger which occurred on November 30, 2005
and the change in control of the Company relating thereto.
(b) The reports of DB on the Company's financial statements for the
fiscal years ended December 31, 2004 and December 31, 2003 did not contain an
adverse opinion, a disclaimer of opinion or any qualifications or modifications
related to uncertainty, limitation of audit scope or application of accounting
principles, except that such reports of DB express "substantial doubt about the
Company's ability to continue as a going concern" and state that "The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty". These "going concern" qualifications relate only to periods
prior to the Merger and do not relate to the financial statements of Gales or
Air Industries Machining, Corp. During the fiscal years ending December 31, 2004
and December 31, 2003 and the period from January 1, 2005 to December 15, 2005,
the Company did not have any disagreements (within the meaning of Instruction 4
of Item 304 of Regulation S-K) with DB as to any matter of accounting principles
or practices, financial statement disclosure, or auditing scope or procedure and
there have been no reportable events (as defined in Item 304 of Regulation S-K).
(c) The Company has not consulted with GGK regarding the application
of accounting principles to a specified transaction or the type of audit opinion
that might be rendered on the Company's financial statements during the two most
recent fiscal years through the present.
(d) A letter of DB addressed to the Securities and Exchange
Commission is included as Exhibit 16.1 to this amended report on Form 8-K/A.
Such letter states that such firm agrees with the statements made by the Company
in this Item 4.01 as they refer to such firm.
(e) The dismissal of DB and appointment of GGK as the Company's
independent auditor was approved by the Board of Directors of the Company on
December 15, 2005.
Item 9.01. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
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Exhibit No.
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16.1 Letter of Daszkal Bolton LLP to the Securities and Exchange
Commission pursuant to the requirements of Item 304(a)(3)
of Regulation S-K.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Amended Current Report to be signed on its
behalf by the undersigned hereunto duly authorized.
Dated: December 27, 2005
ASHLIN DEVELOPMENT CORPORATION
By: /s/ Michael A. Gales
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Michael A. Gales, Executive Chairman
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EXHIBIT 16.1
December __, 2005
Office of the Chief Accountant
Securities and Exchange Commission
Mail Stop 9-5
450 Fifth Street, N.W.
Washington, D.C. 20549
RE: Ashlin Development Corp.
Commission File Number: 005-61067
We have read the statements that we understand Ashlin Development Corp. will
include under Item 4.01 of the amended Form 8-K/A it will file regarding the
recent change of auditors. We agree with such statements made regarding our
firm. We have no basis to agree or disagree with other statements made under
Item 4.01.
Sincerely,
Daszkal Bolton LLP
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ASHLIN DEVELOPMENT CORPORATION
1479 North Clinton Avenue
Bay Shore, New York 11706
December 27, 2005
Securities and Exchange Commission
100 F. Street, N.E.
Washington, D.C. 20649
RE: Ashlin Development Corporation (the "Company);
Commission's Comment Letter (the "Comment Letter"),
Dated December 21, 2005, re Item 4.01 of the Company's
Form 8-K filed December 21, 2005 (the "Original 8-K")
Dear Sirs:
This is in response to the referenced Comment Letter from the Commission's
Division of Corporation Finance (Michael Moran, Branch Chief) to the Company. We
are filing herewith an Amended Current Report on Form 8-K/A (the "Revised 8-K")
which addresses all of the Staff's comments in the Comment Letter.
In response to the comments in the first numbered paragraph of the Comment
Letter, we have revised subparagraph (a) of the Original 8-K to clarify that the
Company dismissed Daszkal Bolton LLP on December 15, 2005 and appointed
Goldstein Golub Kessler LLP as its new independent auditor on December 15, 2005.
In response to the comments in the second numbered paragraph of the
Comment Letter, we have revised the last sentence of subparagraph (b) of the
Original 8-K to clarify that our disclosure with respect to any disagreements
with our former auditor covers the two most recent fiscal years and the
subsequent interim period through December 15. 2005.
The Company hereby acknowledges to the Commission that:
o the Company is responsible for the adequacy and accuracy of the
disclosures in its filings, including the Revised 8-K;
o the Staff's comments, or changes to our disclosure in response to the
Staff's comments, do not foreclose the Commission from taking any action with
respect to the Company's filings, including the Revised 8-K; and
o the Company may not assert any such action by the Commission as a
defense in any proceeding initiated by the Commission or any person under the
federal securities laws of the United States.
Very truly yours,
ASHLIN DEVELOPMENT CORPORATION
By: /s/ Michael A. Gales
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Michael A. Gales, Executive Chairman
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