According to the Complaint, Air Industries Group ("Air Industries" or the Company) is an aerospace company
operating primarily in the defense industry, as well as in the commercial and industrial sector. The Company manufactures and designs structural parts and assemblies that focus on flight safety, including landing gear, arresting gear, engine mounts, flight controls, throttle quadrants, and other components.
On August 24, 2017, the Company filed a Schedule 14A Proxy Statement (the “Proxy”) with the SEC for the Annual Meeting. In the Proxy, the Board asked stockholders of Air Industries to approve an amendment (the “Amendment”) to the Company’s Articles of Incorporation to increase the number of authorized common stock from 25,000,000 to 50,000,000 (the “Share Increase Proposal”). The Proxy affirmatively represented that brokers could not vote shares that they held on behalf of someone else in connection with the Share Increase Proposal unless that party directed the brokers how to vote. As stated in the Proxy, any shares held by brokers on behalf of another for which that party did not give voting instructions would be counted as a “broker non-vote” and treated
as a “Against” vote with respect to the Share Increase Proposal.
The Complaint alleges that in truth, the brokers had discretion to cast votes without any instructions from the actual stockholders, and the Company counted broker non-votes as affirmative votes, and as such, the Proxy was materially false and misleading.