##### Table of Contents





UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 Washington, D.C.
    20549
  Form 10-K
   þ

ANNUAL REPORT UNDER SECTION 13 or 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended
    December 31, 2007o

TRANSITION REPORT UNDER SECTION 13 or 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period
    from          to          .   Commission file number 0-439
  American Locker Group
    Incorporated
 (Exact Name of registrant as
    specified in its charter)
  Delaware


16-0338330(State or other jurisdiction
    of
    incorporation or organization)


(I.R.S. Employer
    Identification No.
)815 South Main Street
    Grapevine, Texas


76051(Zip Code
)(Address of principal executive
    offices)   (817) 329-1600
 (Registrants telephone number, including area code)
  Securities registered under Section 12(b) of the
    Exchange Act:
  Title of Each Class

Name of Each Exchange on Which Registered   None
 Securities registered under Section 12(g) of the
    Exchange Act:
  Common Stock, Par Value $1.00 Per Share
    o þ
  o þ
  o þ
  Regulation S-K Form 10-K Form 10-K. o
  Rule 12b-2
  o o o þ
   Rule 12b-2 o þ
  Rule 12b-2
  DOCUMENTS INCORPORATED BY REFERENCE




---





TABLE OF CONTENTS  PART IItem 1. Business.Item 1A. Risk Factors.Item 1B. Unresolved Staff Comments.Item 2. Properties.Item 3. Legal Proceedings.Item 4. Submission of Matters to a Vote of Security Holders.PART IIItem 5. Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.Item 6. Selected Financial Data.Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations.Item 7A. Quantitative and Qualitative Disclosures About Market Risk.Item 8. Financial Statements and Supplementary Data.Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.Item 9A(T). Controls and ProceduresItem 9B. Other InformationPART IIIItem 10. Directors, Executive Officers and Corporate GovernanceItem 11. Executive Compensation.Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.Item 13. Certain Relationships and Related Transactions, and Director IndependenceItem 14. Principal Accountant Fees and Services.PART IVItem 15. Exhibits, Financial Statement Schedules.    Table of Contents   FORWARD-LOOKING
    INFORMATION
  Form 10-K Form 10-K,
 
  PART I
 
  Item 1.
    Business.  Overview
          Recreation lockers
  Coin operated keys and locks
  USPS approved multi-tenant mail distribution
    lockers
  Private mail delivery lockers
  Electronic distribution lockers
  Evidence lockers
 1




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##### Table of Contents



Laptop lockers
  Mini-check lockers
  Selected end user types:

Amusement parksWater parksApartment buildingsLaw enforcementHealth clubsSki resortsColleges and UniversitiesMilitaryPost OfficesSelected customers:

Walt Disney WorldSea WorldVail AssociatesUniversity of ColoradoUnited States Air ForceBusch GardensAT&TUnited States Postal ServiceThe UPS Store         Form 10-K
   2




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##### Table of Contents



Business
    Segment Financial Information
  Form 10-K
  Competition
    Raw
    Materials
         3




---



##### Table of Contents



Patents
    Employees
    Dependence
    on Material Customer
      Research
    and Development
    Compliance
    with Environmental Laws and Regulations
    Backlog
    and Seasonality
   4




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##### Table of Contents



Available
    Information
  Forms 10-Q 10-K, Form 8-K, http://www.sec.gov. http://www.americanlocker.com. Form 10-K.
  Form 10-K, Form 10-Q, Form 8-K
 
  Item 1A.
    Risk
    Factors.  The Companys results from continuing operations and its
    financial position could be adversely affected in the future by
    known and unknown risks, uncertainties and other factors, many
    of which the Company is unable to predict or control. Some of
    these factors are described in more detail in this Annual Report
    on
    Form 10-K
    and in the Companys other filings with the SEC. Additional
    risks and uncertainties not presently known to the Company or
    that the Company currently deems immaterial may also impair its
    business operations. Should one or more of any of these risks or
    uncertainties materialize, the Companys business,
    financial condition or results of operations could be materially
    adversely affected.
  The
    Company has recently implemented a series of operational changes
    intended to reduce operating expenses. If the changes do not
    have the intended effects, the Companys ability to remain
    in business may be adversely affected.
      The
    Company may not obtain USPS approval to manufacture the new
    USPS-B-1118 CBU. If approval to manufacture the new CBU is not
    received, the Companys results of operations and its
    business and financial condition could be materially adversely
    affected.
   5




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##### Table of Contents



Form 10-K
  The
    Company has experienced rising raw materials costs, which it may
    not be able to successfully mitigate.
    The
    Companys business is materially impacted by general
    economic conditions and the threat of terrorist
    activity.
    The
    Companys future success will depend, in large part, upon
    its ability to successfully introduce new
    products.
   
  Item 1B.
    Unresolved
    Staff Comments.   6




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##### Table of Contents



Item 2.
    Properties.    ApproximateFloor SpaceLocation

Subsidiary

In Sq. Ft.


UseEllicottville, NY

American Locker Security Systems, Inc.Lock Shop


12,800


Lock manufacturing, service and repairToronto, Ontario

Canadian Locker Company, Ltd.


4,000
*

Sales, service and repair of coin-operated lockers and locksToronto, Ontario

Canadian Locker Company, Ltd.


3,000
*

WarehouseGrapevine, TX

Altreco, Inc. (Operated by Security Manufacturing Corporation)


70,000


Manufacturing and corporate headquartersTOTAL




89,800     
 Item 3.
    Legal
    Proceedings.  30-year
  Form 10-K,
 7




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##### Table of Contents



Item 4.
    Submission
    of Matters to a Vote of Security Holders.    Abstain/BrokerFor


Against


Non-VotesEdward F. Ruttenberg


1,294,287



12,656



N/ACraig R. Frank


1,246,685



60,258



N/AJohn E. Harris


1,101,875



205,068



N/AAllen E. Tilley


1,248,685



58,258



N/AJames T. Vanasek


1,092,219



214,724



N/AAnthony B. Johnston


1,246,697



60,246



N/AMary A. Stanford


1,247,189



59,754



N/A     Abstain/BrokerFor


Against


Non-VotesAppointment of Travis, Wolff & Company, L.L.P.


1,157,179



146,508



3,256    8




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##### Table of Contents



PART II
 
  Item 5.
    Market
    for Registrants Common Equity, Related Stockholder Matters
    and Issuer Purchases of Equity Securities.  Market
    Prices and Dividends
  mark-up,
  Market
    Price
    Per Common Share
  2007

High


LowQuarter ended December 31, 2007

$
5.40


$
3.60Quarter ended September 30, 2007


5.65



3.90Quarter ended June 30, 2007


4.50



4.00Quarter ended March 31, 2007


4.82



3.20   2006

High


LowQuarter ended December 31, 2006

$
4.55


$
4.00Quarter ended September 30, 2006


5.00



4.10Quarter ended June 30, 2006


7.00



4.10Quarter ended March 31, 2006


5.74



4.37       Equity
    Compensation Plan Information
    Number of SecuritiesNumber of Securities to be


Weighted-Average


Remaining AvailableIssued Upon Exercise of


Exercise Price of


for Future IssuanceOutstanding Options,


Outstanding Options,


Under EquityWarrants and Rights


Warrants and Rights


Compensation PlansEquity compensation plans approved by security holders(1)


64,000


$
6.12



37,000Equity compensation plans not approved by security holders










Total


64,000


$
6.12



37,000     (1)
    
    Includes the American Locker Group Incorporated 1999 Stock
    Incentive Plan. Please see Note 10 Stock-Based
    Compensation to the Companys consolidated financial
    statements for further information. 9




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##### Table of Contents



Item 6.
    Selected
    Financial Data.  Form 10-K.
  For the Years Ended December 31,2007


2006


2005


2004


2003Sales

$
20,242,803


$
25,065,090


$
32,303,689


$
49,653,129


$
39,738,702Income (loss) before income taxes


(2,749,743
)


845,224



(9,512,121
)


4,682,147



3,406,707Income taxes


(845,626
)


300,904



(1,272,006
)


1,874,567



1,339,899Net income (loss)


(1,904,117
)


544,320



(8,240,115
)


2,807,580



2,066,808Earnings (loss) per share  basic


(1.23
)


0.35



(5.35
)


1.83



1.36Earnings (loss) per share  diluted


(1.23
)


0.35



(5.35
)


1.80



1.33Weighted average common shares outstanding  basic


1,549,516



1,547,392



1,540,179



1,534,146



1,523,429Weighted average common shares outstanding  diluted


1,549,516



1,547,392



1,540,179



1,557,931



1,554,328Dividends declared


0.00



0.00



0.00



0.00



0.00Interest expense


195,280



184,257



333,389



456,865



529,642Depreciation and amortization expense


386,430



396,304



562,078



706,929



893,236Expenditures for property, plant and equipment


818,646



98,591



475,775



280,562



543,146YEAR-END POSITIONTotal assets


12,416,042



14,517,522



15,241,854



29,152,613



26,037,617Long-term debt, including current portion


2,143,765



2,178,042



2,316,210



6,668,596



8,305,487Stockholders equity


7,758,161



9,302,162



8,614,629



16,840,232



14,148,546Stockholders equity per share(1)


5.01



6.00



5.57



10.98



9.22Common shares outstanding at
    year-end


1,549,516



1,549,516



1,546,146



1,534,146



1,534,146Number of employees


126



147



132



149



154     last-in, first-in,
  (1)
    
    Based on shares outstanding at December 31, 2007. 
  Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations.  Critical
    Accounting Policies and Estimates
   10




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##### Table of Contents



Revenue
    Recognition
    Allowance
    for Doubtful Accounts
    Inventories
  work-in-progress
  Form 10-K
    Goodwill
  Form 10-K,
   11




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##### Table of Contents



Property,
    Plant and Equipment
    Form 10-K,
  Pension
    Assumptions
      Deferred
    Income Tax Assets
   12




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##### Table of Contents



Results
    of Operations  Year Ended December 31, 2007
    Compared to Year Ended December 31, 2006
  Change
    in Accounting Method
    Overall
    Results and Outlook
    Decertification
    of the Model E CBU
    USPS-B-1118
  Net
    Sales
   13




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##### Table of Contents



Percentage2007


2006


Increase (Decrease)Postal Lockers, excluding CBUs

$
5,331,601


$
6,336,513



(15.9
)%CBUs


5,759,245



9,158,801



(37.1
)%Non-Postal Lockers


9,151,957



9,569,776



(4.4
)%   Cost
    of Sales
    Selling,
    Administrative and General Expenses
    Other
    Income and Expense  Net
    Interest
    Expense
    Income
    Taxes
    Results
    of Operations  Year Ended December 31, 2006
    Compared to Year Ended December 31, 2005
  Overall
    Results
   14




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##### Table of Contents



Non-Renewal
    of USPS Contract and Other Events
        Net
    Sales
      Percentage2006


2005


Increase (Decrease)Postal Lockers, excluding CBUs

$
6,336,513


$
6,424,373



(1.4
)%CBUs


9,158,801



16,159,106



(43.3
)%Non-Postal Lockers


9,569,776



9,720,210



(1.5
)%   Cost
    of Sales
   15




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##### Table of Contents



Selling,
    Administrative and General Expenses
    Other
    Income and Expense  Net
    Interest
    Expense
    Income
    Taxes
    Liquidity
    and Sources of Capital
  Cash
    Flows Summary
  Year Ended December 31,2007


2006


2005Net cash (used in) provided by:Operating activities

$
(294,669
)

$
1,443,757


$
246,201Investing activities


(818,646
)


(98,591
)


(437,906
)Financing activities


(34,277
)


(122,454
)


(4,318,636
)Effect of exchange rate changes on cash


201,319



7,497



8,141Increase (Decrease) in cash and cash equivalents

$
(946,273
)

$
1,230,209


$
(4,502,200
)   Operating
    Activities
     16




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##### Table of Contents



Investing
    Activities
      Financing
    Activities
            Form 10-K
       17




---



##### Table of Contents



Effect of
    Exchange Rate Changes on Cash
      Cash and
    Cash Equivalents
    Liquidity
    As of December 31,2007

2006Current Ratio

3.5 to 1

4.3 to 1Working Capital

$5,318,126

$7,954,349           Subsequent
    Events
    10-K
 18




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##### Table of Contents



Off-Balance
    Sheet Arrangements
    Contractual
    Obligations
    Payments Due by PeriodLess Than








More ThanTotal


1 Year


1-3 Years


3-5 Years


5 YearsLong-term debt obligations

$
2,143,765


$
96,530


$
342,535


$
1,704,700


$
Operating lease obligations


138,832



96,937



41,895







Total

$
2,282,597


$
193,467


$
384,430


$
1,704,700


$
         Other
    Agreements
    Impact of
    Inflation and Changing Prices
   19




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##### Table of Contents



Market
    Risks
  Raw
    Materials
    Foreign
    Currency
    Interest
    Rate Risks
    Effect of
    New Accounting Guidance
    No. 06-3, No. 06-3). No. 06-3 No. 06-3.
 20




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##### Table of Contents



FAS 157-1 FAS 157-2
       
  Item 7A.
    Quantitative
    and Qualitative Disclosures About Market Risk.   21




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##### Table of Contents



Item 8.
    Financial
    Statements and Supplementary Data.  REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
  
                 22




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##### Table of Contents



American
    Locker Group Incorporated and Subsidiaries
  Consolidated
    Balance Sheets
  December 31,2007


2006(Restated)ASSETSCurrent assets:Cash and cash equivalents

$
1,561,951


$
2,508,224Accounts receivable, less allowance for doubtful accounts of
    $233,000 in 2007 and $198,000 in 2006


1,568,464



2,902,079Inventories, net


3,060,341



3,387,729Prepaid expenses


223,068



143,481Income tax receivable


44,467



578,653Deferred income taxes


987,538



841,689Total current assets


7,445,829



10,361,855Property, plant and equipment:Land


500,500



500,500Buildings and leasehold improvements


3,509,891



3,430,162Machinery and equipment


8,045,859



7,099,24912,056,250



11,029,911Less allowance for depreciation and amortization


(7,543,465
)


(6,952,025
)4,512,785



4,077,886Deferred income taxes


457,428



77,781Total assets

$
12,416,042


$
14,517,522LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Current portion of long-term debt

$
96,530


$
152,192Accounts payable


1,236,316



1,574,098Commissions, salaries, wages and taxes thereon


285,759



260,862Income taxes payable


72,146



Other accrued expenses and current liabilities


436,952



420,354Total current liabilities


2,127,703



2,407,506Long-term liabilities:Long-term debt


2,047,235



2,025,850Pension and other benefits


482,943



782,0042,530,178



2,807,854Total liabilities


4,657,881



5,215,360Commitments and contingenciesStockholders equity:Common stock, $1 par value:Authorized shares  4,000,000
    Issued shares  1,741,516 in 2007 and 2006
    Outstanding shares  1,549,516 in 2007 and 2006


1,741,516



1,741,516Other capital


184,988



144,415Retained earnings


8,018,454



9,922,571Treasury stock at cost (192,000 shares)


(2,112,000
)


(2,112,000
)Accumulated other comprehensive loss


(74,797
)


(394,340
)Total stockholders equity


7,758,161



9,302,162Total liabilities and stockholders equity

$
12,416,042


$
14,517,522    23




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##### Table of Contents



American
    Locker Group Incorporated and Subsidiaries
  Consolidated
    Statements of Operations
  Year Ended December 31,2007


2006


2005(Restated)


(Restated)Net sales

$
20,242,803


$
25,065,090


$
32,303,689Cost of products sold


15,321,106



16,619,734



24,141,999Gross profit


4,921,697



8,445,356



8,161,690Asset impairment  goodwill










6,155,204Selling, administrative and general expenses


7,464,087



7,285,212



8,488,771Restructuring costs










2,329,191(2,542,390
)


1,160,144



(8,811,476
)Interest income


49,870



29,070



85,365Other income (expense)  net


(61,943
)


(159,733
)


(452,621
)Interest expense


(195,280
)


(184,257
)


(333,389
)Income (loss) before income taxes


(2,749,743
)


845,224



(9,512,121
)Income tax expense (benefit)


(845,626
)


300,904



(1,272,006
)Net income (loss)


(1,904,117
)

$
544,320


$
(8,240,115
)Weighted average common shares:Basic


1,549,516



1,547,392



1,540,179Diluted


1,549,516



1,547,392



1,540,179Earnings (loss) per share of common stock:Basic

$
(1.23
)

$
0.35


$
(5.35
)Diluted

$
(1.23
)

$
0.35


$
(5.35
)Dividends per share of common stock

$
0.00


$
0.00


$
0.00    24




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##### Table of Contents



American
    Locker Group Incorporated and Subsidiaries
  Consolidated
    Statements of Stockholders Equity
  AccumulatedOther


TotalCommon


Other


Retained


Treasury


Comprehensive


StockholdersStock


Capital


Earnings


Stock


Income (Loss)


Equity(Restated)








(Restated)Balance at January 1, 2005, as previously stated

$
1,726,146


$
97,812


$
17,327,683


$
(2,112,000
)

$
(490,092
)

$
16,549,549Change in inventory accounting










290,683











290,683Balance at January 1, 2005, as restated


1,726,146



97,812



17,618,366



(2,112,000
)


(490,092
)


16,840,232Comprehensive income:Net income (loss) (Restated)










(8,240,115
)










(8,240,115
)Other comprehensive income (loss):Foreign currency translation


















(34,219
)


(34,219
)Minimum pension liability adjustment, net of tax benefit of
    $1,649


















2,473



2,473Total comprehensive (loss) (Restated)






















(8,271,861
)Common stock issued (12,000 shares)


12,000



21,750















33,750Tax benefit of exercised stock options






12,509















12,509Balance at December 31, 2005, as restated

$
1,738,146


$
132,071


$
9,378,251


$
(2,112,000
)

$
(521,838
)

$
8,614,630Net income (loss) (Restated)










544,320











544,320Other comprehensive income (loss):Foreign currency translation


















7,361



7,361Minimum pension liability adjustment, net of tax benefit of
    $80,091


















120,137



120,137Total comprehensive income (restated)






















671,818Common stock issued (3,370 shares)


3,370



12,344















15,714Balance at December 31, 2006, as restated

$
1,741,516


$
144,415


$
9,922,571


$
(2,112,000
)

$
(394,340
)

$
9,302,162Net income (loss)










(1,904,117
)










(1,904,117
)Other comprehensive income (loss):Foreign currency translation


















249,491



249,491Minimum pension liability adjustment, net of tax benefit of
    $46,707


















70,052



70,052Total comprehensive (loss)






















(1,584,574
)Stock-based compensation






40,573















40,573Balance at December 31, 2007

$
1,741,516


$
184,988


$
8,018,454


$
(2,112,000
)

$
(74,797
)

$
7,758,161    25




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##### Table of Contents



American
    Locker Group Incorporated and Subsidiaries
  Consolidated
    Statements of Cash Flows
  Year Ended December 31,2007


2006


2005(Restated)


(Restated)Operating activitiesNet income (loss)

$
(1,904,117
)

$
544,320


$
(8,240,115
)Adjustments to reconcile net income (loss) to net cash provided
    by operating activities:Depreciation and amortization


386,430



396,304



562,078Provision for uncollectible accounts


61,000



77,939



(112,048
)Equity based compensation


40,573







Loss on disposal of assets










84,379Deferred income taxes (credits)


(488,728
)


400,251



(120,291
)Impairment of goodwill










6,155,204Changes in assets and liabilities:Accounts and other receivables


1,343,848



986,803



523,891Inventories


341,078



(92,738
)


3,634,630Prepaid expenses


(78,110
)


(92,610
)


85,149Accounts payable and accrued expenses


(363,602
)


(928,210
)


(1,186,035
)Income taxes


602,857



476,772



(1,457,844
)Pension and other benefits


(235,898
)


(325,074
)


317,203Net cash provided by (used in) operating activities


(294,669
)


1,443,757



246,201Investing activitiesPurchase of property, plant and equipment


(818,646
)


(98,591
)


(475,775
)Proceeds from sale of property, plant and equipment










37,869Net cash used in investing activities


(818,646
)


(98,591
)


(437,906
)Financing activitiesLong-term debt payments


(2,234,277
)


(138,168
)


(4,352,386
)Long-term debt borrowings


2,200,000







Common stock issued






15,714



33,750Net cash used in financing activities


(34,277
)


(122,454
)


(4,318,636
)Effect of exchange rate changes on cash


201,319



7,497



8,141Net increase (decrease) in cash and cash equivalents


(946,273
)


1,230,209



(4,502,200
)Cash and cash equivalents at beginning of year


2,508,224



1,278,015



5,780,215Cash and cash equivalents at end of year


1,561,951


$
2,508,224


$
1,278,015Supplemental cash flow information:Cash paid during the year for:Interest

$
195,502


$
183,708


$
292,160Income taxes

$
15,898


$



$
934,954    26




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##### Table of Contents



Notes to
    Consolidated Financial Statements
  American
    Locker Group Incorporated and Subsidiaries
 December 31,
    2007
  1.
    Basis of
    Presentation  Consolidation,
    Business Description and Current Operating
    Condition
            2.
    Summary
    of Significant Accounting Policies  Change
    in Accounting Method
   27




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##### Table of Contents



Notes to
    Consolidated Financial Statements
  American
    Locker Group Incorporated and
    Subsidiaries  (Continued)
      2006


2005As Originally


As Adjusted for


As Originally


As Adjusted forReported


Accounting Change


Reported


Accounting ChangeConsolidated statements of operationsCost of products sold

$
16,438,344


$
16,619,734


$
23,904,090


$
24,141,999Tax provision


387,148



300,904



(1,182,314
)


(1,272,006
)Net earnings


639,466



544,320



(8,091,898
)


(8,240,115
)Basic earnings (loss) per share


0.41



0.35



(5.25
)


(5.35
)Diluted earnings (loss) per share


0.41



0.35



(5.25
)


(5.35
)     2006As Originally


As Adjusted forReported


Accounting ChangeConsolidated balance sheetsInventories

$
3,340,409


$
3,387,729Retained earnings


9,875,251



9,922,571   Cash
    and Cash Equivalents
    Accounts
    Receivable
     28




---



##### Table of Contents



Notes to
    Consolidated Financial Statements
  American
    Locker Group Incorporated and
    Subsidiaries  (Continued)
  Inventories
    Property,
    Plant and Equipment
        Goodwill
    and Other Intangible Assets
    Pensions
    and Postretirement Benefits
    Revenue
    Recognition
   29




---



##### Table of Contents



Notes to
    Consolidated Financial Statements
  American
    Locker Group Incorporated and
    Subsidiaries  (Continued)
  Shipping
    and Handling Costs
    Advertising
    Expense
    Income
    Taxes
        Research
    and Development
   30




---



##### Table of Contents



Notes to
    Consolidated Financial Statements
  American
    Locker Group Incorporated and
    Subsidiaries  (Continued)
  Earnings
    Per Share
    Foreign
    Currency
    Fair
    Value of Financial Instruments
    Stock-Based
    Compensation
    Comprehensive
    Income
    Use of
    Estimates
    New
    Accounting Pronouncements
   31




---



##### Table of Contents



Notes to
    Consolidated Financial Statements
  American
    Locker Group Incorporated and
    Subsidiaries  (Continued)
    No. 06-3, No. 06-3). No. 06-3 No. 06-3.
  FAS 157-1 FAS 157-2
       32




---



##### Table of Contents



Notes to
    Consolidated Financial Statements
  American
    Locker Group Incorporated and
    Subsidiaries  (Continued)
  3.
    Inventories    December 31,2007


2006Finished products

$
333,653


$
442,777Work-in-process


898,620



1,243,362Raw materials


1,828,068



1,701,590Net inventories

$
3,060,341


$
3,387,729   4.
    Other
    Accrued Expenses and Current Liabilities    December 31,2007


2006Short-term pension liability

$
177,987


$
215,878Restructuring liability


11,941



11,941Accrued severance


200,000



0Accrued expenses, other


47,024



192,535Total accrued expenses

$
436,952


$
420,354   5.
    Debt    December 31,2007


2006Mortgage payable to bank through January 2012 at
    $22,493 monthly including interest at prime plus
    75 basis points (8% at December 31, 2007) with
    payment for remaining balance due February 1, 2012,
    collateralized by real estate


2,143,765



Mortgage payable to bank through July 2006 at
    $26,823 monthly including interest at 8.04% with payment
    for remaining balance due August 1, 2006, collateralized by
    real estate






2,178,042Total long-term debt


2,143,765



2,178,042Less current portion


(96,530
)


(152,192
)Long-term portion

$
2,047,235


$
2,025,850      33




---



##### Table of Contents



Notes to
    Consolidated Financial Statements
  American
    Locker Group Incorporated and
    Subsidiaries  (Continued)
  Form 10-K
  6.
    Operating
    Leases    2008

$
97,0002009


32,0002010


7,0002011


3,0002012


Total

$
139,000     7.
    Income
    Taxes    2007


2006


2005(Restated)


(Restated)United States income (loss)

$
(2,881,400
)

$
677,396


$
(9,431,428
)Foreign income (loss)


131,657



167,828



(80,693
)$
(2,749,743
)

$
845,224


$
(9,512,121
)     2007


2006


2005(Restated)


(Restated)Current:Federal

$
(217,023
)

$
977


$
(1,108,342
)State


(105,590
)


139



(94,513
)Foreign


49,192



65,453



1,536Total current


(273,421
)


66,569



(1,201,319
)Deferred:Federal


(529,628
)


182,726



(51,452
)State


(36,346
)


27,876



5,172Foreign


(6,231
)


23,733



(24,407
)(572,205
)


234,335



(70,687
)$
(845,626
)

$
300,904


$
(1,272,006
)  34




---



##### Table of Contents



Notes to
    Consolidated Financial Statements
  American
    Locker Group Incorporated and
    Subsidiaries  (Continued)
    2007


2006


2005(Restated)


(Restated)Statutory income tax rate


(34
)%


34
%


(34
)%State and foreign income taxes, net of federal benefit


(1
)


3



(3
)Change in valuation allowance


11







Foreign earnings taxed at different rate


(4
)






Change in estimated credits and refunds


(4
)






Repatriation dividend










4Research and development credits










(5
)Non-deductible goodwill impairment










24Other permanent differences


1



(1
)


1(31
)%


36
%


(13
)%     2007


2006Deferred tax liabilities:Prepaid expenses and other

$
4,609


$
80,794Total deferred tax liabilities


4,609



80,794Deferred tax assets:Property, plant and equipment


9,332



30,337Operating loss carryforwards


703,651



Postretirement benefits


23,471



27,095Pension costs


257,401



351,248Allowance for doubtful accounts


73,194



66,600Other assets


16,626



20,349Accrued expenses


65,828



4,418Other employee benefits


31,381



915Inventory costs


564,342



499,302Total deferred tax assets


1,745,226



1,000,264Net


1,740,617


$
919,470Valuation allowance


(295,651
)


Net

$
1,444,966


$
919,470Current deferred tax asset

$
987,538


$
841,689Long-term deferred tax asset


457,428



77,781$
1,444,966


$
919,470    35




---



##### Table of Contents



Notes to
    Consolidated Financial Statements
  American
    Locker Group Incorporated and
    Subsidiaries  (Continued)
          Taxes-An
  8.
    Pension
    and Other Postretirement Benefits  U.S.
    Pension Plan
      Canadian
    Pension Plan
     36




---



##### Table of Contents



Notes to
    Consolidated Financial Statements
  American
    Locker Group Incorporated and
    Subsidiaries  (Continued)
        Pension BenefitsU.S. Plan


Canadian Plan2007


2006


2007


2006Change in projected benefit obligationProjected benefit obligation at beginning of year

$
3,369,674


$
3,430,740


$
1,122,137


$
1,028,399Service cost


29,610



30,487



31,627



29,198Interest cost


191,828



184,377



60,727



57,954Benefit payments


(166,287
)


(57,217
)


(82,903
)


(66,863
)Administrative expenses


(18,174
)


(28,898
)






Actuarial (gain) loss


(383,650
)


(189,815
)


17,591



75,949Currency translation adjustment










213,351



(2,499
)Curtailment gain














Projected benefit obligation at end of year


3,023,001



3,369,674



1,362,530



1,122,138Change in plan assetsFair value of plan assets at beginning of year


2,639,553



2,363,904



927,607



778,978Actual return on plan assets


52,447



236,233



(5,428
)


76,656Benefit payments


(166,287
)


(57,217
)


(82,903
)


(66,863
)Employer contribution


100,749



125,531



164,122



142,900Administrative expenses


(18,174
)


(28,898
)






Currency translation adjustment










181,145



(4,064
)Fair value of plan assets at end of year


2,608,288



2,639,553



1,184,543



927,607Plan assets less than benefit obligation

$
(414,713
)

$
(730,121
)

$
(177,987
)

$
(194,531
)  37




---



##### Table of Contents



Notes to
    Consolidated Financial Statements
  American
    Locker Group Incorporated and
    Subsidiaries  (Continued)
    U.S. Plan


Canadian Plan2007


2006


2007


2006Current liabilities

$



$
(81,500
)

$
(177,987
)

$
(134,378
)Non-current liabilities


(414,713
)


(648,621
)






(60,153
)Net amount recognized

$
(414,713
)

$
(730,121
)

$
(177,987
)

$
(194,531
)     U.S. Plan

Canadian Plan2007

2006

2007

2006Unrecognized net loss

$
202,150


$
450,043


$
290,733


$
159,607$
202,150


$
450,043


$
290,733


$
159,607       U.S. Plan


Canadian Plan2007


2006


2005


2007


2006


2005Components of net periodic benefit cost:Service cost

$
29,610


$
30,487


$
201,506


$
31,627


$
29,198


$
32,470Interest cost


191,828



184,377



233,381



60,727



57,954



50,233Expected return on plan assets


(197,588
)


(178,868
)


(214,822
)


(73,078
)


(68,980
)


(48,085
)Net actuarial loss






29,916



51,231











Amortization of prior service cost


9,384







879



3,275



3,087



Net periodic benefit cost

$
33,234


$
65,912


$
272,175


$
22,551


$
21,259


$
34,618     U.S. Plan


Canadian Plan2008

$
92,000


$
92,0002009


106,000



89,0002010


104,000



87,0002011


111,000



84,0002012


137,000



81,0002013 through 2017


907,000



347,000  38




---



##### Table of Contents



Notes to
    Consolidated Financial Statements
  American
    Locker Group Incorporated and
    Subsidiaries  (Continued)
    U.S. Plan


Canadian Plan2007


2006


2007


2006Weighted average assumptions as of December 31:Discount rate


6.50
%


5.75
%


5.00
%


5.00
%Rate of compensation increase










2.00
%


2.00
%     U.S. Plan


Canadian Plan2007


2006


2007


2006Weighted average assumptions as of December 31:Discount rate


5.75
%


5.50
%


5.00
%


5.50
%Expected return on plan assets


7.50
%


7.50
%


7.00
%


7.00
%Rate of compensation increase










2.00
%


2.00
%     Death
    Benefit Plan
    Defined
    Contribution Plan
    9.
    Capital
    Stock  Form 10-K
 39




---



##### Table of Contents



Notes to
    Consolidated Financial Statements
  American
    Locker Group Incorporated and
    Subsidiaries  (Continued)
  10.
    Stock-Based
    Compensation          2007


2006


2005Option term (years)


10







Volatility


77.0
%






Risk-free interest rate


4.5
%






Dividend yield


0.0
%






Termination rate


10.0
%






Weighted average fair value per option granted

$
4.08







       2007


2006


2005Weighted





Weighted





WeightedAverage





Average





AverageExercise





Exercise





ExerciseOptions


Price


Options


Price


Options


PriceOutstanding  beginning of year


31,000


$
7.51



33,600


$
7.43



80,600


$
6.34Exercised


















(12,000
)


2.81Granted


36,000



4.95















Expired or forfeited


(3,000
)


6.50



(2,600
)


6.50



(35,000
)


6.50Outstanding  end of year


64,000


$
6.12



31,000


$
7.51



33,600


$
7.43Exercisable  end of year


32,000







31,000







33,600  40




---



##### Table of Contents



Notes to
    Consolidated Financial Statements
  American
    Locker Group Incorporated and
    Subsidiaries  (Continued)
    Vested


UnvestedExercise

Number of


Intrinsic


Remaining Years of


Exercise


Number of


Intrinsic


Remaining Years ofPrice

Options


Value


Contractual Life


Price


Options


Value


Contractual Life$4.95


4,000







9.7


$
4.95



32,000







9.7$6.50


8,000







1.9$7.25


10,000







2.2$8.88


10,000







1.432,000



     11.
    Shareholder
    Rights Plan     41




---



##### Table of Contents



Notes to
    Consolidated Financial Statements
  American
    Locker Group Incorporated and
    Subsidiaries  (Continued)
  12.
    Earnings
    Per Share    2007


2006


2005(Restated)


(Restated)Numerator:Net income (loss)

$
(1,904,117
)

$
544,320


$
(8,240,115
)Denominator:Denominator for basic earnings per share  weighted
    average shares outstanding


1,549,516



1,547,392



1,540,179Effect of dilutive securities:Employee stock options










Denominator for diluted earnings per share  weighted
    average shares outstanding and assumed conversions


1,549,516



1,547,392



1,540,179Basic earnings (loss) per share

$
(1.23
)

$
0.35


$
(5.35
)Diluted earnings (loss) per share

$
(1.23
)

$
0.35


$
(5.35
)     13.
    Accumulated
    Other Comprehensive Loss    2007


2006Foreign currency translation adjustment

$
220,932


$
(28,559
)Minimum pension liability adjustment, net of tax effect of
    $197,154 in 2007 and $243,861 in 2006


(295,729
)


(365,781
)$
(74,797
)

$
(394,340
)   14.
    Geographical
    and Customer Concentration Data    2007


2006


2005United States customers

$
17,574,065


$
21,476,311


$
29,295,544Canadian and other foreign customers


2,668,738



3,588,779



3,008,14520,242,803


$
25,065,090


$
32,303,689    42




---



##### Table of Contents



Notes to
    Consolidated Financial Statements
  American
    Locker Group Incorporated and
    Subsidiaries  (Continued)
      15.
    Related
    Parties        16.
    Contingencies  30-year
   43




---



##### Table of Contents



Notes to
    Consolidated Financial Statements
  American
    Locker Group Incorporated and
    Subsidiaries  (Continued)
        17.
    Restructuring        Cost of Sales:Equipment impairment

$
92,000Inventory impairment


160,000Purchase order commitments


108,000Subtotal


360,000Selling, administrative and general:Severance


641,000Professional fees


1,328,000Subtotal


1,969,000$
2,329,000  44




---



##### Table of Contents



Notes to
    Consolidated Financial Statements
  American
    Locker Group Incorporated and
    Subsidiaries  (Continued)
    Payments/








Payments/2005


Expense


Charges


2006


Expense


Charges


2007Purchase order commitments


























Severance


133,000







121,000



12,000











12,000Professional fees


























Total

$
133,000


$



$
121,000


$
12,000


$



$



$
12,000   18.
    Post
    Employment Arrangements   45




---



##### Table of Contents



Item 9.
    Changes
    in and Disagreements With Accountants on Accounting and
    Financial Disclosure.   
  Item 9A(T).
    Controls
    and Procedures  Disclosure
    Controls and Procedures
    Rules 13a-15(e) 15d-15(e) Rules 13a-15 15d-15
  Managements
    Report on Internal Control over Financial Reporting
          Material
    weaknesses previously identified as of December 31, 2006
    that continue to exist as of December 31,
    2007:
  
    Perpetual Inventory System  The Companys
    2006 Annual Report on
    Form 10-K
    reported a material weakness due to the Companys failure
    to routinely maintain the Companys perpetual inventory
    system. As a result of this failure, the Companys
    independent registered public accounting firm proposed numerous
    material adjustments in the Companys financial statements
    as of and for the year ended December 31, 2006. Although
    the Companys independent registered public accounting firm
    did not propose any material 46




---



##### Table of Contents



adjustments in 2007 related to this weakness, the Company was
    required to record adjustments as part of their annual closing
    process to adjust the perpetual inventory to the amounts
    determined by the Companys physical count. Effective
    controls were not maintained to ensure that the Companys
    inventory systems completely and accurately processed and
    accounted for inventory movements on an interim basis within the
    Companys manufacturing facilities and adjustments were
    necessary to adjust interim financial statements. If not
    remediated, it is reasonably possible that our consolidated
    financial statements will contain a material misstatement or
    that we will miss a filing deadline in the future.  
    Entity Level Controls  The Companys
    2006 Annual Report on
    Form 10-K
    identified a material weakness due to the Companys
    insufficient entity level controls, as defined by COSO, to
    ensure that the Company meets it disclosure and reporting
    obligations. Specifically, certain key financial accounting and
    reporting personnel had an expansive scope of duties without the
    oversight of the board of directors or audit committee that
    allowed for the creation, review, approval and processing of
    financial data and authorization for the preparation of
    consolidation schedules and resulting financial statements
    without independent review. Certain documents lacked physical
    documentation of management review and approval where such
    review and approval was required. Additionally, due to the
    dynamic and evolving nature of our business, the Company lacked
    sufficiently documented policies and procedures reflecting
    managements expectations. While this control deficiency
    did not result in audit adjustments in 2007, if not remediated,
    it is reasonably possible that our consolidated financial
    statements will contain a material misstatement or that we will
    miss a filing deadline in the future.  Material
    weakness initially identified as of December 31,
    2007:
  
    Information Technology  The Company did not
    maintain effective controls over the segregation of duties and
    access to financial reporting systems. Specifically, key
    financial reporting systems were not appropriately configured to
    ensure that certain transactions were properly processed with
    segregate duties amongst personnel and to ensure that
    unauthorized individuals did not have access to add or change
    key financial data. Additionally, the Company lacked adequate
    personnel with relevant expertise to maintain effective controls
    over information technology. Although the Company did not find
    any instances of unauthorized transactions in fiscal 2007, it is
    reasonably possible that our consolidated financial statements
    will contain a material misstatement if this deficiency is not
    remediated.
    Timeliness of Financial Reporting  The Company
    did not maintain adequate staffing levels throughout 2007 to
    rebuild its accounting function and file in a timely manner the
    large number of delinquent interim and annual reports that
    existed during that time. Additionally, the Company did not
    maintain effective written policies, procedures and
    documentation to ensure the timely filing of required interim
    and annual financial reports with the SEC. The Company relocated
    its headquarters from Jamestown, New York to Grapevine, Texas in
    mid-2005. As a result of this relocation, the Company
    experienced the turnover of its entire accounting
    department. The rebuilding of the accounting function has taken
    longer than anticipated due to the lack of sufficient written
    policies and procedures and inadequate staffing levels that
    existed during 2007 as noted above. As a consequence of the
    foregoing, the Company has been unable to file its required
    interim and annual reports with the SEC in a timely manner.    Form 10-K Form 10-K
 47




---



##### Table of Contents



Changes
    in Internal Control over Financial Reporting
    Actions
    to address previously reported material weaknesses that no
    longer exist as of December 31, 2007:
  
    Accounting Personnel  The Companys 2006
    Annual Report on
    Form 10-K
    identified a material weakness due to a lack of adequate
    accounting personnel to oversee the financial accounting and
    reporting responsibilities of an SEC registrant and maintain
    internal control over financial reporting to produce financial
    statements in accordance with U.S. generally accepted
    accounting principles. In particular, the Companys
    accounting and finance personnel did not possess the necessary
    experience and expertise to oversee the financial accounting and
    reporting responsibilities of an SEC registrant prior to hiring
    the current CFO. To address this matter the Company hired the
    following additional accounting personnel: our current Chief
    Financial Officer in November 2006; our current Controller in
    March 2007; a Staff Accountant in June 2007; and a Cost
    Accountant in October 2007. The Company now believes a
    sufficient complement of personnel is in place with an
    appropriate level of technical accounting knowledge such that it
    is no longer reasonably possible that our consolidated financial
    statements will be materially misstated as a result of lack of
    adequate accounting personnel.
    Purchase and Sale Transactions  The
    Companys 2005 and 2006 Annual Reports on
    Form 10-K
    identified a material weakness due to inadequate procedures in
    place to ensure that purchases or sale transactions are recorded
    in the appropriate accounting period. During fiscal 2007 we
    implemented additional policies and procedures to ensure that
    purchase or sale transactions are recorded in the appropriate
    accounting period. The Company now believes sufficient policies
    and procedures are in place such that it is no longer reasonably
    possible that our consolidated financial statements will be
    materially misstated as a result of inadequate procedures in
    place to ensure that purchases or sale transactions are recorded
    in the appropriate accounting period.  Actions
    implemented or initiated in 2008 to address the material
    weaknesses described above that exist as of December 31,
    2007:
  
    Actions to strengthen controls over the Companys
    perpetual inventory include:  (i) appointing
    a Manager of Supply Chain with responsibility for day-to-day
    oversight of inventory control; (ii) reorganizing and
    restructuring the inventory control function;
    (iii) implementing new policies and procedures related to
    cycle counting, including performing root cause analysis of
    discrepancies; (iv) implementing new policies and
    procedures to ensure inventory movements are completely and
    accurately processed in a timely manner; and (v) detailed
    reviewing of bills of materials by personal possessing relevant
    expertise to ensure the accuracy of information contained
    therein.
    Actions to strengthen the Companys entity level
    controls include:  (i) reducing the scope of
    duties of key accounting and financial personnel so that the
    person creating and processing financial data is separate from
    the person performing the review and approval of the same
    financial data; (ii) requiring the physical sign-off of
    accounting and financial personnel on review and approval of
    documents where such review and approval is required;
    (iii) developing written documentation of policies and
    procedures to document managements expectations; and
    (iv) requiring key employees to periodically certify their
    compliance with the Companys code of conduct.
    Actions to strengthen controls over the Companys
    information technologies include:  (i) the
    Company has replaced its information technology personnel with
    persons possessing relevant expertise to maintain control over
    information technology; (ii) information technology systems
    will be configured to ensure appropriate access controls; and
    (iii) key financial reporting systems will be configured to
    ensure unauthorized individuals do not have access to add or
    change key financial data.
    Actions to strengthen controls over financial reporting to
    ensure the timely filing of required interim and annual
    financial reporting with the SEC
    include;  (i) effective written policies and
    procedures to ensure the 48




---



##### Table of Contents



timely close of the financial reporting process are being
    developed, (ii) the change in accounting principles from
    LIFO to FIFO will eliminate the time required to calculate the
    LIFO reserve, (iii) the reduction of outsourced
    manufacturing activities will reduce the time and complexity of
    the procedures performed to ensure that purchase and sales
    transactions are recorded in the appropriate accounting period,
    (iv) the filing of late interim and annual financial
    reports with the SEC will reduce time spent by accounting and
    finance personnel on these matters. 
  Item 9B.
    Other
    Information   
  PART III
 
  Item 10.
    Directors,
    Executive Officers and Corporate Governance  Directors
    and Executive Officers
    Name

Age

PositionJohn E. Harris(1)


47


Non-Executive Chairman of the BoardAllen D. Tilley(2)


70


Chief Executive Officer and DirectorPaul M. Zaidins(3)


40


President, Chief Operating Officer and Chief Financial OfficerCraig R. Frank


47


DirectorAnthony B. Johnston


47


DirectorEdward F. Ruttenberg(4)


61


DirectorMary A. Stanford


47


DirectorJames T. Vanasek


38


Director     (1)
    
    Mr. Harris was appointed Non-Executive Chairman in February
    2008.(2)
    
    Mr. Tilley was appointed Chief Executive Officer in
    February 2008.(3)
    
    Mr. Zaidins was appointed to the additional positions of
    President and Chief Operating Officer in February 2008.(4)
    
    Mr. Ruttenberg retired as Chairman, Chief Executive
    Officer, Chief Operating Officer and Treasurer in January 2008.  John E. Harris.
  Allen D. Tilley.
 49




---



##### Table of Contents



Paul M. Zaidins.
  Craig R. Frank.
  Anthony B. Johnston.
  Edward F. Ruttenberg.
  Mary A. Stanford.
  James T. Vanasek.
    Audit
    Committee
    Section 16(a)
    Beneficial Ownership Reporting Compliance
    Code of
    Ethics
   50




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##### Table of Contents



Form 10-K.
  Nominating
    and Governance Committee
       
  Item 11.
    Executive
    Compensation.  Summary
    Compensation Table
    OtherOption

AnnualName and



Salary

Bonus

Awards

CompensationPrincipal Positions

Year

($)

($)

($)(5)

($)

TotalPaul M. Zaidins


2006



16,740














$
16,740President, Chief Financial Officer and


2007



140,400



20,000



48,960






$
209,360Chief Operating Officer(2)Edward F. Ruttenberg


2006



160,000











480
(4)

$
160,480Director(1)


2007



160,000







32,640



160
(4)

$
192,800Allen D. Tilley


2006



















Chief Executive Officer and Director(3)


2007



1,840















1,840     (1)
    
    Prior to January 31, 2008, Mr. Ruttenberg served as
    Chief Executive Officer, Chief Operating Officer and Treasurer
    of the Company. Mr. Ruttenberg did not receive any separate
    compensation for his services as a member of the Board of
    Directors.(2)
    
    Mr. Zaidins served as the Companys controller before
    becoming the Companys Chief Financial Officer in August
    2007, and in February 2008 he was named the Companys
    President and Chief Operating Officer.(3)
    
    Mr. Tilley was appointed as a director of the Company in
    October 2007 and was appointed as Chief Executive Officer in
    February 2008. Amounts presented for 2007 represent fees
    received by Mr. Tilley for his services of a member of the
    Board of Directors.(4)
    
    Consists of the Companys employer matching contribution to
    the 401(k) plan. 51




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##### Table of Contents



(5)
    
    The valuation of stock option awards in this column represents
    the compensation cost of awards recognized for financial
    statement purposes under Statement of Financial Accounting
    Standards No. 123, as revised. The amounts include portions
    of stock option grants in 2007 that were expensed in 2007 based
    on the amortization schedule. See discussion under
    Note 10, Stock-Based Compensationin the notes to
    the Companys consolidated financial statements under
    Item 8 of this Annual Report on
    Form 10-K
    for a discussion of all assumptions made in connection with
    determining the fair value of the awards.  Employment
    Arrangements
        1999
    Stock Incentive Plan
    Administration.
  Amount of Stock.
  Eligibility and Participation.
  Amendment or Termination. award-by-award
 52




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##### Table of Contents



Stock Options.
          Stock Appreciation Rights.
    Change in Control.
 53




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##### Table of Contents



Outstanding
    Equity Awards at Fiscal Year-End
    Equity IncentivePlan Awards:Number ofNumber of Securities


SecuritiesUnderlying


Underlying


Option


OptionUnexercised Options (#)


Unexercised


Exercise


ExpirationName

Exercisable


Unexercisable


Unearned Options


Price ($)


DateEdward F. Ruttenberg


10,000











8.875



05/13/095,000











6.50



11/18/0910,000











7.25



03/02/10



8,000







4.95



09/06/17Paul M. Zaidins


4,000



8,000







4.95



09/06/17Allen D. Tilley


















   Pension
    Benefits
  Form 10-K
  Present Value ofNumber of Years


Accumulated


Payments DuringName

Plan Name


Credited Service (#)


Benefit ($)


Last Fiscal YearEdward F. Ruttenberg


U.S. Pension Plan



6.75



223,128



Paul M. Zaidins














Allen D. Tilley














     (1)
    
    Pension benefit amounts listed in the table are not subject to
    deduction for Social Security benefits.    Compensation
    of Directors
    Fees Earnedor Paid inName

Cash ($)


TotalCraig R. Frank


10,500



10,500John E. Harris


11,000



11,000Anthony Johnston(1)


9,167



9,167Mary A. Stanford


14,500



14,500James T. Vanasek


11,000



11,000     (1)
    
    Mr. Johnston was appointed as a director in February 2007. 54




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##### Table of Contents



,
   55




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##### Table of Contents



Item 12.
    Security
    Ownership of Certain Beneficial Owners and Management and
    Related Stockholder Matters.  c/o American
  Amount andNature ofBeneficial


Percent ofName and Address of Beneficial Owner

Ownership(1)


Class(2)Santa Monica Partners, L.P.(3)


126,978



8.1
%1865 Palmer Avenue,Larchmont, New York 10538VN Capital Fund I, L.P.(4)


121,508



7.8
%198 Broadway, Suite 406,New York, New York 10038Paul B. Luber 704 Tenth Avenue Grafton, Wisconsin 53024


84,227



5.4
%Edward F. Ruttenberg(5)


80,841



5.2
%Paul M. Zaidins(6)


4,000



*Craig R. Frank


1,150



*John E. Harris


6,644



*Anthony B. Johnston


1,000



*Mary A. Stanford


3,644



*Allen D. Tilley


6,000



*James T. Vanasek(7)


123,152



7.9
%All directors and executive officers as a group
    (8 persons)(8)


226,431



14.4
%     *
    
    Less than 1%(1)
    
    Beneficial ownership has been determined in accordance with
    Rule 13d-3
    under the Securities Exchange Act of 1934 and, unless otherwise
    indicated, represents securities for which the beneficial owner
    has sole voting and investment power. Any securities held in the
    name of, and under, the voting and investment power of a spouse
    of an executive officer or director have been excluded.(2)
    
    Calculated based on 1,568,516 shares of common stock
    outstanding on June 16, 2008, plus, for each person or
    group, any securities that person or group has the right to
    acquire within 60 days pursuant to options, warrants,
    conversion privileges or other rights.(3)
    
    The general partner of Santa Monica Partners, L.P. is SMP Asset
    Management LLC. Lawrence J. Goldstein is the President and sole
    owner of SMP Asset Management, and may be deemed to beneficially
    own these shares. Mr. Goldstein disclaims beneficial
    ownership of these shares except to the extent of his pecuniary
    interest therein. The amount listed does not include
    4,288 shares owned directly by Mr. Goldstein and
    5,600 shares owned by Lawrence J. Goldstein IRA account
    (shares were rolled over from the L.J. Goldstein Company
    Incorporated Pension Plan).(4)
    
    The general partners of VN Capital Fund I, L.P. are VN
    Capital Management, LLC and Joinville Capital Management, LLC.
    VN Capital Management, LLC and Joinville Capital Management, LLC
    are Delaware limited liability companies formed to be the
    general partners of VN Capital Fund I, L.P. James T.
    Vanasek, a member of the Companys board of directors, and
    Patrick Donnell Noone are the Managing Members of VN Capital
    Management, LLC and Joinville Capital Management, LLC. 56




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##### Table of Contents



(5)
    
    Includes 25,000 shares which Mr. Ruttenberg has the
    right to acquire under stock options at an exercise price of
    $7.25 (10,000), $6.50 (5,000) and $8.875 (10,000). Also includes
    5,332 shares held by Rollform of Jamestown, Inc., a company
    in which Mr. Ruttenberg and his immediate family own a 97%
    interest.(6)
    
    Includes 4,000 shares which Mr. Zaidins has the right
    to acquire under stock options at an exercise price of $4.95.(7)
    
    Includes 1,644 shares held directly in
    Mr. Vanaseks name and 121,508 shares held by VN
    Capital Management, LLC and Joinville Capital Management, LLC,
    of which Mr. Vanasek is a Principal, with respect to which
    Mr. Vanasek disclaims beneficial ownership except to the
    extent of his pecuniary interest, if any.(8)
    
    Includes 29,000 shares of common stock that may be acquired
    by the persons included in this group within 60 days
    pursuant to options, warrants, conversion privileges or other
    rights. Please see notes (5) and (6) above. 
  Item 13.
    Certain
    Relationships and Related Transactions, and Director
    Independence   
  Item 14.
    Principal
    Accountant Fees and Services.      2007


2006Audit fees

$
269,000


$
170,000Audit-related fees


36,000



Tax fees


69,000



30,000All other fees






Total

$
374,000


$
200,000   Audit
    Fees
  Form 10-Qs
  Audit-Related
    Fees
    Tax
    Fees
   57




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##### Table of Contents



Other
    Fees
    Pre-Approval
    Policies and Procedures
   
  PART IV
 
  Item 15.
    Exhibits,
    Financial Statement Schedules.  Form 10-K:
  Form 10-K.
  Form 10-K.
  Form 10-K:
   EXHIBIT INDEX
  Exhibit



Prior Filing orNo.

Document Description

Notation of Filing Herewith3
.1

Certificate of Incorporation of American Locker Group
    Incorporated

Exhibit to Form 10-K for Year ended December 31, 19803
.2

Amendment to Certificate of Incorporation

Form 10-C filed May 6, 19853
.3

Amendment to Certificate of Incorporation

Exhibit to Form 10-K for year ended December 31, 19873
.4

By-laws of American Locker Group Incorporated as amended and
    restated

Filed herewith4
.1

Certificate of Designations of Series A Junior
    Participating Preferred Stock

Exhibit to Form 10-K for year ended December 31, 199910
.1

Form of Indemnification Agreement between American Locker Group
    Incorporated and its directors and officers

Exhibit to Form 8-K filed May 18, 200510
.2

American Locker Group Incorporated 1999 Stock Incentive Plan

Exhibit to Form 10-Q for the quarter ended June 30, 199910
.3

Rights Agreement dated November 19, 1999 between American
    Locker Group Incorporated and Chase Mellon Shareholder Services
    LLC

Exhibit to Form 8-K filed November 18, 199910
.4

Employment Agreement dated January 3, 2006 between American
    Locker Group Incorporated and Edward F. Ruttenberg

Exhibit to Form 8-K filed January 4, 200610
.5

Form of Option Agreement under 1999 Stock Incentive Plan

Exhibit to Form 10-K for year ended December 31, 1999 58




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##### Table of Contents



Exhibit



Prior Filing orNo.

Document Description

Notation of Filing Herewith10
.6

Loan Agreement dated March 6, 2007 between American Locker
    Group, F&M Bank and Trust Company and Altreco, Inc.,
    as Guarantor (Line of Credit)

Exhibit to Form 10-K for year ended December 31, 200510
.7

First Amended and Restated Loan Agreement dated March 5,
    2008 between American Locker Group, F&M Bank and
    Trust Company and Altreco, Inc., as Guarantor (Line of
    Credit)

Filed herewith10
.8

Loan Agreement dated March 6, 2007 between American Locker
    Group, F&M Bank and Trust Company and Altreco, Inc.,
    as Guarantor (Term Loan)

Exhibit to Form 10-K for year ended December 31, 200518
.1

Travis, Wolff & Company, LLP letter dated
    June 16, 2008 related to changes in accounting principals

Filed herewith21
.1

List of Subsidiaries

Filed herewith23
.1

Consent of Travis, Wolff & Company, LLP

Filed herewith31
.1

Certification of Principal Executive Officer pursuant to
    Rule 13a-14(a)
    and
    Rule 15d-14(a)
    of the Securities Exchange Act of 1934

Filed herewith31
.2

Certification of Principal Financial Officer pursuant to
    Rule 13a-14(a)
    and
    Rule 15d-14(a)
    of the Securities Exchange Act of 1934

Filed herewith32
.1

Certifications of Principal Executive Officer and Principal
    Financial Officer Pursuant to 18 U.S.C. Section 1350
    as adopted pursuant to Section 906 of the Sarbanes-Oxley
    Act of 2002.

Filed herewith  59




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##### Table of Contents



SIGNATURES
    AMERICAN LOCKER GROUP INCORPORATED
  By:
    /s/ ALLEN D. TILLEY         Signature

Title

Date/s/  JOHN
    E.
    HARRISJohn
    E. Harris

Non-Executive Chairman

June 19, 2008/s/  Allen
    D. TilleyAllen
    D. Tilley

Chief Executive Officer
    (Principal Executive Officer)

June 19, 2008/s/  Paul
    M. ZaidinsPaul
    M. Zaidins

President, Chief Operating
    Officer and Chief Financial Officer
    (Principal Financial and Accounting Officer)

June 19, 2008/s/  Craig
    R. FrankCraig
    R. Frank

Director

June 19, 2008/s/  Anthony
    B. JohnstonAnthony
    B. Johnston

Director

June 19, 2008/s/  Edward
    F. RuttenbergEdward
    F. Ruttenberg

Director

June 19, 2008/s/  Mary
    A. StanfordMary
    A. Stanford

Director

June 19, 2008/s/  James
    T. VanasekJames
    T. Vanasek

Director

June 19, 2008  60




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##### Table of Contents



Schedule II
  American
    Locker Group Incorporated
  Valuation and Qualifying Accounts
  AdditionsCharged toBalance at the


Costs and





Balance atYear          Description




Beginning of Year


Expense


Deductions


End of YearYear ended 2007Allowance for Doubtful Accounts





$
198,000


$
61,000


$
(26,000
)

$
233,000Reserve for Inventory Valuation






1,250,000



185,000







1,435,000Year ended 2006Allowance for Doubtful Accounts





$
120,000


$
87,000


$
(9,000
)

$
198,000Reserve for Inventory Valuation






1,003,000



247,000







1,250,000Year ended 2005Allowance for Doubtful Accounts





$
232,000


$
332,000


$
(444,000
)

$
120,000Reserve for Inventory Valuation






386,000



617,000







1,003,000  61