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UNITED STATES
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): NOVEMBER 22, 2004
AROTECH CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 0-23336 95-4302784
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
250 WEST 57TH STREET, SUITE 310, NEW YORK, NEW YORK 10107
(Address of Principal Executive Offices) (Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (212) 258-3222
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:
|_| 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))
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ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION.
The Audit Committee of our Board of Directors concluded on November 22,
2004 to restate certain previously issued financial statements contained in our
Annual Report on Form 10-K for the year ended December 31, 2003, as described in
more detail in Item 4.02(a) of this report, below.
ITEM 4.02 NON-RELIANCE ON PREVIOUSLY ISSUED FINANCIAL STATEMENTS OR A RELATED
AUDIT REPORT OR COMPLETED INTERIM REVIEW.
(a) On November 22, 2004, the Audit Committee of our Board of Directors,
on the recommendation of our management and after discussion with and based on a
new and revised review of accounting treatment by our independent auditors, made
an internal determination and concluded that our Annual Report on Form 10-K for
the year ended December 31, 2003 (the "2003 10-K"), including the financial
statements that our auditors had previously audited that are contained therein,
contained certain errors related to the re-pricing of warrants and grant of
additional warrants to certain of its investors and others and the amortization
of debt discount arising from the allocation of the debt discount between the
convertible debentures and their detachable warrants. These errors also affected
our Quarterly Reports on Form 10-Q for the quarters ended June 30, 2004, March
31, 2004, September 30, 2003 and June 30, 2003 (collectively, the "10-Qs").
The decision to restate these financial statements was made by our Audit
Committee, upon the recommendation of our management and with the concurrence of
our independent auditors. In addition, our Audit Committee, upon the
recommendation of management, made an internal determination that the
previously-issued financial statements contained in the 2003 10-K and the 10-Qs
should not be relied upon.
The net effect of these errors, which are described below and which
generally related to the timing and characterization of certain non-cash
expenses, was to increase our net loss attributable to common stockholders for
2003 by approximately $579,000 and to decrease our net loss for the first half
of 2004 by approximately $608,000.
On November 22, 2004, our Audit Committee discussed the matters disclosed
in this Item 4.02(a) with management and with our auditors, Kost, Forer, Gabbay
& Kassierer, a member of Ernst & Young Global. Our auditors informed the Audit
Committee that they concur with our conclusions described above.
We will file a Form 10-K/A amending the 2003 10-K as soon as practicable.
Since all relevant changes have been reflected in our Quarterly Report on Form
10-Q for the quarter ended September 30, 2004 that we are filing today (the
"Third Quarter 10-Q"), as well as in this Current Report on Form 8-K, we do not
anticipate filing Forms 10-Q/A amending the 10-Qs.
Additionally, our financial results for the three and nine months ended
September 30, 2004, as reported in the Third Quarter 10-Q, differ from the
financial results that we announced on November 9, 2004 by, among other things,
decreasing our net loss attributable to common stockholders for the nine and
three months ended September 30, 2004 by approximately $1,583,778 and $976,129,
respectively, as follows (unaudited):
NINE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
--------------------------- ---------------------------
2004 2003 2004 2003*
--------------------------- ---------------------------
(AS PREVIOUSLY ANNOUNCED) (AS REVISED AND REPORTED)
--------------------------- ---------------------------
Revenues .............................................................. $ 33,383,023 $ 13,232,486 $ 33,383,023 $ 13,232,486
Cost of revenues ...................................................... 22,680,921 8,365,212 22,680,921 8,365,212
------------ ------------ ------------ ------------
Gross profit .......................................................... 10,702,102 4,867,274 10,702,102 4,867,274
------------ ------------ ------------ ------------
Research and development expenses ..................................... 1,302,773 762,629 1,302,774 762,629
Sales and marketing expenses .......................................... 3,435,183 2,395,190 3,435,183 2,395,190
General and administrative expenses ................................... 9,365,378 3,579,371 7,571,923 3,456,286
Amortization of intangible assets ..................................... 1,731,425 727,127 1,731,425 727,127
------------ ------------ ------------ ------------
15,834,759 7,464,317 14,041,305 7,341,232
------------ ------------ ------------ ------------
Operating income (loss) ............................................... (5,132,657) (2,597,043) (3,339,203) (2,473,958)
Financial income (expenses), net ...................................... (3,079,404) (1,084,582) (2,126,079) (1,213,582)
------------ ------------ ------------ ------------
Net income (loss) before taxes ........................................ (8,212,062) (3,681,625) (5,465,282) (3,687,540)
Tax expenses .......................................................... (286,525) (308,137) (286,525) (308,137)
------------ ------------ ------------ ------------
Net income (loss) before minority interest in profit of subsidiary .... (8,498,587) (3,989,762) (5,751,807) (3,995,677)
Minority interest in loss (earnings) of a subsidiary .................. (35,363) 134,813 (35,365) 134,813
------------ ------------ ------------ ------------
Net income (loss) from continuing operations .......................... $ (8,533,950) $ (3,854,949) $ (5,787,172) $ (3,860,864)
Net income (loss) from discontinued operations ........................ -- 80,883 -- 80,883
------------ ------------ ------------ ------------
Net income (loss) for the period ...................................... $ (8,533,950) $ (3,774,066) $ (5,787,172) $ (3,779,981)
Deemed dividend to certain stockholders of common stock ............... (2,165,952) -- (3,328,952) (267,026)
------------ ------------ ------------ ------------
Net income (loss) attributable to stockholders of common stock ........ $(10,699,902) $ (3,774,066) $ (9,116,124) $ (4,047,007)
============ ============ ============ ============
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Basic and diluted net earnings (loss) per share for continuing
operations .......................................................... $ (0.16) $ (0.10) $ (0.14) $ (0.11)
============ ============ ============ ============
Basic and diluted net earnings (loss) per share for discontinued
operations .......................................................... $ -- $ 0.00 $ 0.00 $ 0.00
============ ============ ============ ============
Combined basic and diluted net earnings (loss) per share .............. $ (0.16) $ (0.10) $ (0.14) $ (0.11)
============ ============ ============ ============
Weighted average number of shares outstanding ......................... 67,072,069 32,276,260 67,072,069 32,276,260
----------
* Restated.
THREE MONTHS ENDED THREE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
---------------------------- ----------------------------
2004 2003 2004 2003*
---------------------------- ----------------------------
(AS PREVIOUSLY ANNOUNCED) (AS REVISED AND REPORTED)
---------------------------- ----------------------------
Revenues ........................................................... $ 16,272,521 $ 5,705,898 $ 16,272,521 $ 5,705,898
Cost of revenues ................................................... 11,548,948 3,252,323 11,548,948 3,252,323
------------ ------------ ------------ ------------
Gross profit ....................................................... 4,723,573 2,453,575 4,723,573 2,453,575
------------ ------------ ------------ ------------
Research and development expenses .................................. 431,146 252,085 431,147 252,085
Sales and marketing expenses ....................................... 1,294,488 757,614 1,294,487 757,614
General and administrative expenses ................................ 2,162,925 1,105,864 2,111,853 982,779
Amortization of intangible assets .................................. 739,400 103,584 739,400 103,584
------------ ------------ ------------ ------------
4,627,959 2,219,147 4,576,887 2,096,062
------------ ------------ ------------ ------------
Operating income (loss) ............................................ 95,614 234,428 146,686 357,513
Financial income (expenses), net ................................... 180,126 (100,761) 1,105,276 (82,333)
------------ ------------ ------------ ------------
Net income (loss) before taxes ..................................... 275,741 133,667 1,251,962 275,180
Tax expenses ....................................................... (116,460) (31,089) (116,460) (31,089)
------------ ------------ ------------ ------------
Net income (loss) before minority interest in profit of subsidiary . 159,281 102,578 1,135,502 244,091
Minority interest in loss (earnings) of a subsidiary ............... (8,655) (25,485) (8,657) (25,485)
------------ ------------ ------------ ------------
Net income (loss) from continuing operations ....................... $ 150,626 $ 77,093 $ 1,126,845 $ 218,606
Net income (loss) from discontinued operations ..................... -- (2,285) -- (2,285)
------------ ------------ ------------ ------------
Net income (loss) for the period ................................... $ 150,626 $ 74,808 $ 1,126,845 $ 216,321
Deemed dividend to certain stockholders of common stock ............ (2,165,952) -- (2,165,952) (94,676)
------------ ------------ ------------ ------------
Net income (loss) attributable to stockholders of common stock ..... (2,015,326) 74,808 (1,039,107) 121,645
============ ============ ============ ============
------------------------------------------------------------------------------------------------------------------------------------
Basic and diluted net earnings (loss) per share for continuing
operations ....................................................... $ (0.03) $ 0.00 $ (0.01) $ 0.00
============ ============ ============ ============
Basic and diluted net earnings (loss) per share for discontinued
operations ....................................................... $ -- $ -- $ 0.00 $ 0.00
============ ============ ============ ============
Combined basic and diluted net earnings (loss) per share ........... $ (0.03) $ 0.00 $ (0.01) $ 0.00
============ ============ ============ ============
Basic and diluted weighted average number of shares outstanding .... 76,744,251 40,371,940 76,744,251 40,371,940
============ ============ ============ ============
----------
* Restated.
2
SUMMARY INFORMATION - FINANCIAL STATEMENT RESTATEMENT
During our management's review of our interim financial statements for the
period ended September 30, 2004, we, after consultation with and based on a new
and revised review of accounting treatment by our independent auditors,
conducted a comprehensive review on the re-pricing of warrants and grant of new
warrants to certain of our investors and others during 2003 and 2004. As a
result of that review, we, upon recommendation of our management and with the
approval of the Audit Committee of our Board of Directors after consultation
with our independent auditors, reconsidered the accounting related to these
transactions and are now reclassifying certain expenses as a deemed dividend, a
non-cash item, instead of as general and administrative expenses due to the
recognition of this transaction as a capital transaction that should not be
expensed. The consolidated financial statements for the nine months ended
September 30, 2003, for the six months ended June 2003 and 2004, for the three
months ended March 31, 2004 and the year ended December 31, 2003 are being
restated to record a deemed dividend and to decrease general and administrative
expenses accordingly. These restatements do not affect our balance sheet,
shareholders' equity or cash flow statements. In addition and as a result of the
remeasurement described above, we have reviewed assumptions used in the
calculation of fair value of all warrants granted during the year 2003. As a
result of this comprehensive review, we decreased our general and administrative
expenses in the amount of $150,000, related to errors found in valuation
underlying assumptions of warrants granted as a result of a litigation
settlement, in the financial statements for the year ended December 31, 2003.
In addition, during our management's review of our interim financial
statements for the period ended September 30, 2004, we also reviewed our
calculation of amortization of debt discount attributable to the beneficial
conversion feature of convertible debentures. As a result of this review, we
found errors which increased (decreased) our financial expenses for the nine
months ended September 30, 2003, for the six months ended June 2003 and 2004,
for the three months ended March 31, 2004 and the year ended December 31, 2003.
The errors were related to the debt discount attributable to the warrants and
their related convertible debentures, whereby we understated the amount of
amortization in the year ended December 31, 2003 attributable to the conversion
of certain of the convertible debentures, and we overstated the amount of
amortization in the six months ended June 30, 2004 attributable to the exercise
of certain of the warrants.
The impacts of these restatements are summarized below:
Statement of Operations Data:
FOR THE THREE MONTHS ENDED
JUNE 30, 2004
-------------------------------------
PREVIOUSLY
REPORTED ADJUSTMENT AS RESTATED
---------- ---------- ----------
General and administrative expenses ..... $3,521,461 $ (149,527) $3,371,934
Operating loss .......................... 2,191,705 (149,527) 2,042,178
Financial expenses, net ................. 1,985,576 167,235 2,152,811
Loss from continuing operations ......... 4,378,415 17,708 4,396,123
---------- ---------- ----------
Net loss ................................ 4,378,415 17,708 4,396,123
========== ========== ==========
Basic and diluted net loss per share from
continuing operations ................. $ 0.07 $ 0.00 $ 0.07
========== ========== ==========
Basic and diluted net loss per share .... $ 0.07 $ 0.00 $ 0.07
========== ========== ==========
3
FOR THE SIX MONTHS ENDED JUNE 30, 2004
----------------------------------------
PREVIOUSLY
REPORTED ADJUSTMENT AS RESTATED
----------- ----------- -----------
General and administrative expenses ........ $ 7,202,454 $(1,742,384) $ 5,460,070
Operating loss ............................. 5,228,267 (1,742,384) 3,485,883
Financial expenses, net .................... 3,259,530 (28,174) 3,231,356
Loss from continuing operations ............ 8,684,570 (1,770,558) 6,914,012
----------- ----------- -----------
Net loss ................................... 8,684,570 (1,770,558) 6,914,012
Deemed dividend to certain stockholders of
common stock ............................ -- 1,163,000 1,163,000
----------- ----------- -----------
Net loss attributable to common stockholders $ 8,684,570 $ (607,558) $ 8,077,012
=========== =========== ===========
Basic and diluted net loss per share from
continuing operations .................... $ 0.14 $ (0.03) $ 0.11
=========== =========== ===========
Basic and diluted net loss per share ....... $ 0.14 $ (0.01) $ 0.13
=========== =========== ===========
FOR THE THREE MONTHS ENDED MARCH 31, 2004
-----------------------------------------
PREVIOUSLY
REPORTED ADJUSTMENT AS RESTATED
----------- ----------- -----------
General and administrative expenses ........ $ 3,680,993 $(1,592,857) $ 2,088,136
Operating loss ............................. 3,036,562 (1,592,857) 1,443,705
Financial expenses, net .................... 1,273,954 (195,409) 1,078,545
Loss from continuing operations ............ 4,306,155 (1,788,266) 2,517,889
----------- ----------- -----------
Net loss ................................... 4,306,155 (1,788,266) 2,517,889
Deemed dividend to certain stockholders of
common stock ............................ -- 1,163,000 1,163,000
----------- ----------- -----------
Net loss attributable to common stockholders $ 4,306,155 $ (625,266) $ 3,680,889
=========== =========== ===========
Basic and diluted net loss per share from
continuing operations .................... $ 0.07 $ (0.03) $ 0.04
=========== =========== ===========
Basic and diluted net loss per share ....... $ 0.07 $ (0.01) $ 0.06
=========== =========== ===========
4
FOR THE YEAR ENDED DECEMBER 31, 2003
--------------------------------------
PREVIOUSLY
REPORTED ADJUSTMENT AS RESTATED
---------- ---------- ----------
General and administrative expenses ........ $6,196,779 $ (338,903) $5,857,876
Operating loss ............................. 5,408,932 (338,903) 5,070,029
Financial expenses, net .................... 3,470,459 568,250 4,038,709
Loss from continuing operations ............ 9,118,684 229,347 9,348,031
---------- ---------- ----------
Net loss ................................... 9,008,274 229,347 9,237,621
Deemed dividend to certain stockholders of
common stock ............................ -- 350,000 350,000
---------- ---------- ----------
Net loss attributable to common stockholders $9,008,274 $ 579,347 $9,587,621
========== ========== ==========
Basic and diluted net loss per share from
continuing operations .................... $ 0.23 $ 0.01 $ 0.24
========== ========== ==========
Basic and diluted net loss per share ....... $ 0.23 $ 0.02 $ 0.25
========== ========== ==========
FOR THE NINE MONTHS ENDED
SEPTEMBER 30, 2003
--------------------------------------
PREVIOUSLY
REPORTED ADJUSTMENT AS RESTATED
---------- ---------- ----------
General and administrative expenses ........ $3,579,371 $ (123,085) $3,456,286
Operating loss ............................. 2,597,043 )123,085( 2,473,958
Financial expenses, net .................... 1,084,582 129,000 1,213,582
Net income from continuing operations ...... 3,854,949 5,915 3,860,864
---------- ---------- ----------
Net loss ................................... 3,774,066 5,915 3,779,981
Deemed dividend to certain stockholders of
common stock ............................ -- 267,026 267,026
---------- ---------- ----------
Net loss attributable to common stockholders $3,774,066 $ 272,941 $4,047,007
========== ========== ==========
Basic and diluted net loss per share from
continuing operations .................... $ 0.10 $ 0.01 $ 0.11
========== ========== ==========
Basic and diluted net loss per share ....... $ 0.10 $ 0.01 $ 0.11
========== ========== ==========
5
FOR THE THREE MONTHS ENDED
SEPTEMBER 30, 2003
--------------------------------------
PREVIOUSLY
REPORTED ADJUSTMENT AS RESTATED
---------- ---------- ----------
General and administrative expenses .......... $1,105,864 $ (123,085) $ 982,779
Operating income ............................. 234,428 123,085 357,513
Financial expenses, net ...................... 100,761 (18,428) 82,333
Net income from continuing operations ........ 77,093 141,513 218,606
---------- ---------- ----------
Net income ................................... 74,808 141,513 216,321
Deemed dividend to certain stockholders of
common stock .............................. -- (94,676) (94,676)
---------- ---------- ----------
Net income attributable to common stockholders $ 74,808 $ 46,837 $ 121,645
========== ========== ==========
Basic and diluted net earnings per share from
continuing operations ...................... $ 0.00 $ 0.00 $ 0.00
========== ========== ==========
Basic and diluted net earnings per share .... $ 0.00 $ 0.00 $ 0.00
========== ========== ==========
FOR THE SIX MONTHS ENDED
JUNE 30, 2003
-------------------------------------
PREVIOUSLY
REPORTED ADJUSTMENT AS RESTATED
---------- ---------- ----------
Financial expenses, net .................... $ 983,821 $ 147,428 $1,131,249
Loss from continuing operations ............ 3,932,041 147,428 4,079,469
---------- ---------- ----------
Net loss ................................... 3,848,875 147,428 3,996,303
Deemed dividend to certain stockholders of
common stock ............................ -- 172,350 172,350
---------- ---------- ----------
Net loss attributable to common stockholders $3,848,875 $ 319,778 $4,168,653
========== ========== ==========
Basic and diluted net loss per share from
continuing operations .................... $ 0.11 $ 0.00 $ 0.11
========== ========== ==========
Basic and diluted net loss per share ....... $ 0.11 $ 0.01 $ 0.12
========== ========== ==========
FOR THE THREE MONTHS ENDED
JUNE 30, 2003
-------------------------------------
PREVIOUSLY
REPORTED ADJUSTMENT AS RESTATED
---------- ---------- ----------
Financial expenses, net .................... $ 725,609 $ 147,428 $ 873,037
Loss from continuing operations ............ 2,640,920 147,428 2,788,348
---------- ---------- ----------
Net loss ................................... 2,461,793 147,428 2,609,221
Deemed dividend to certain stockholders of
common stock ............................ -- 172,350 172,350
---------- ---------- ----------
Net loss attributable to common stockholders $2,461,793 $ 319,778 $2,781,571
========== ========== ==========
Basic and diluted net loss per share from
continuing operations .................... $ 0.07 $ 0.01 $ 0.08
========== ========== ==========
Basic and diluted net loss per share ....... $ 0.07 $ 0.01 $ 0.08
========== ========== ==========
6
Balance sheet data:
AS OF JUNE 30, 2004
-----------------------------------------------
PREVIOUSLY
REPORTED ADJUSTMENT AS RESTATED
------------- ------------- -------------
Convertible debenture ............ $ 737,235 $ 540,075 $ 1,277,310
Total long term liabilities ...... 6,278,225 540,075 6,818,300
Additional paid in capital ....... 167,789,043 (2,081,287) 165,707,756
Accumulated deficit .............. (118,366,463) 1,541,212 (116,825,257)
Total shareholders' equity ....... 44,707,225 (540,075) 44,167,150
AS OF MARCH 31, 2004
-----------------------------------------------
PREVIOUSLY
REPORTED ADJUSTMENT AS RESTATED
------------- ------------- -------------
Convertible debenture ............ $ 849,037 $ 372,841 $ 1,221,878
Total long term liabilities ...... 6,062,891 372,841 6,435,732
Additional paid in capital ....... 162,331,180 (1,931,760) 160,399,420
Accumulated deficit .............. (113,988,048) 1,558,919 (112,429,129)
Total shareholders' equity ....... 44,019,328 (372,841) 43,646,487
AS OF DECEMBER 31, 2003
-----------------------------------------------
PREVIOUSLY
REPORTED ADJUSTMENT AS RESTATED
------------- ------------- -------------
Other accounts payable and accrued
expenses ......................... $ 4,180,411 $ (150,000) $ 4,030,411
Convertible debenture ............ 881,944 568,250 1,450,194
Total long term liabilities ...... 4,066,579 568,250 4,634,829
Additional paid in capital ....... 135,891,316 (188,903) 135,702,413
Accumulated deficit .............. (109,681,893) (229,347) (109,911,240)
Total shareholders' equity ....... 22,044,127 (418,250) (21,625,877)
AS OF SEPTEMBER 30, 2003
-----------------------------------------------
PREVIOUSLY
REPORTED ADJUSTMENT AS RESTATED
------------- ------------- -------------
Convertible debenture ............ $ 1,115,001 $ 129,000 $ 1,244,001
Total long term liabilities ...... 4,178,147 129,000 4,307,147
Additional paid in capital ....... 120,105,276 (123,085) 119,982,191
Accumulated deficit .............. (104,447,685) (5,915) (104,453,600)
Total shareholders' equity ....... 11,411,175 (129,000) 11,282,175
AS OF JUNE 30, 2003
-----------------------------------------------
PREVIOUSLY
REPORTED ADJUSTMENT AS RESTATED
------------- ------------- -------------
Convertible debenture ............ $ 988,572 $ 147,428 $ 1,136,000
Total long term liabilities ...... 4,358,568 147,428 4,505,996
Accumulated deficit .............. (104,522,494) (147,428) (104,669,922)
Total shareholders' equity ....... 10,356,181 (147,428) 10,208,753
7
Cash flow data:
FOR THE SIX MONTHS ENDED JUNE 30, 2004
----------------------------------------
PREVIOUSLY
REPORTED ADJUSTMENT AS RESTATED
----------- ----------- -----------
Net loss ....................................... $ 8,684,570 $(1,770,558) $ 6,914,012
Stock based compensation related to repricing of
warrants granted to investors and the grant of
new warrants ................................. 1,742,384 (1,742,384) --
Amortization of compensation related to
beneficial conversion feature and warrants
issued to holders of convertible debentures .. 2,967,791 (28,174) 2,939,617
FOR THE THREE MONTHS ENDED MARCH 31, 2004
----------------------------------------
PREVIOUSLY
REPORTED ADJUSTMENT AS RESTATED
----------- ----------- -----------
Net loss ....................................... $ 4,306,155 $(1,788,266) $ 2,517,889
Stock based compensation related to repricing of
warrants granted to investors and the grant of
new warrants ................................. 1,592,857 (1,592,857) --
Amortization of compensation related to
beneficial conversion feature and warrants
issued to holders of convertible debentures .. 1,117,093 (195,409) 921,684
FOR THE YEAR ENDED DECEMBER 31, 2003
----------------------------------------
PREVIOUSLY
REPORTED ADJUSTMENT AS RESTATED
----------- ----------- -----------
Net loss ....................................... $ 9,008,274 $ 229,347 $ 9,237,621
Stock based compensation related to repricing of
warrants granted to investors and the grant of
new warrants ................................. 388,403 (188,903) 199,500
Amortization of compensation related to
beneficial conversion feature and warrants
issued to holders of convertible debentures .. 3,359,987 568,250 3,928,237
8
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2003
--------------------------------------------
PREVIOUSLY
REPORTED ADJUSTMENT AS RESTATED
----------- ----------- -----------
Net loss ....................................... $ 3,774,066 $ 5,915 $ 3,779,981
Stock based compensation related to repricing of
warrants granted to investors and the grant of
new warrants ................................. 152,844 (123,085) 29,759
Amortization of compensation related to
beneficial conversion feature and warrants
issued to holders of convertible debentures .. 1,005,001 129,000 1,134,001
FOR THE SIX MONTHS ENDED JUNE 30, 2003
----------------------------------------
PREVIOUSLY
REPORTED ADJUSTMENT AS RESTATED
----------- ----------- -----------
Net loss ....................................... $ 3,848,875 $ 147,428 $ 3,996,303
Amortization of compensation related to
beneficial conversion feature and warrants
issued to holders of convertible debentures .. 878,572 147,428 1,026,000
Our management and the Audit Committee of our Board of Directors have
discussed with our independent accountants the foregoing matters disclosed in
this Item 4.02(a).
(b) Not applicable.
(c) Not applicable.
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.
AROTECH CORPORATION
(REGISTRANT)
By: /s/ Robert S. Ehrlich
------------------------------------
Name: Robert S. Ehrlich
Title: Chairman, President and CEO
Dated: November 22, 2004
9