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What changed in AIR INDUSTRIES GROUP's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of AIR INDUSTRIES GROUP's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+296 added−216 removedSource: 10-K (2026-03-27) vs 10-K (2025-04-15)

Top changes in AIR INDUSTRIES GROUP's 2025 10-K

296 paragraphs added · 216 removed · 179 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeWith total unfilled contract values amounting to $271.3 million (including our $117.9 million in funded backlog and all potential orders against LTA agreements previously awarded to us), as of December 31, 2024, we are confident in our ability to boost sales in 2025, attain profitability and improve our financial position. 1 Customer Profiles In 2024 and 2023, approximately 69.9% and 82.3% of our net sales were attributed to customers who use our products for end-use on military aircraft.
Biggest changeAs of December 31, 2025, we have total unfilled contract values amounting to $270.1 million (including our $136.8 million in funded backlog and all potential orders against LTA agreements previously awarded to us). As discussed below under “Recent Developments” our go-forward business may materially change.
We sell directly to one of its legal subsidiaries, Sikorsky Aircraft Corporation (“Sikorsky”). ● Northrop Grumman (“Northrop”) – We supply product used on the E2-D Hawkeye, airborne warning and control aircraft. ● General Electric Aerospace (“GE”) – We supply GE Aerospace with high precision components that are used in jet turbine aircraft engines that are used on several commercial aircraft platforms. ● GE Verona – We supply GE Verona with precision components that are used in ground-based turbines for electrical power generation. ● The U.S.
We sell directly to one of its subsidiaries, Sikorsky Aircraft Corporation (“Sikorsky”). ● Northrop Grumman (“Northrop”) – We supply product used on the E2-D Hawkeye, airborne warning and control aircraft. ● General Electric Aerospace (“GE”) – We supply GE Aerospace with high precision components that are used in jet turbine aircraft engines that are used on several commercial aircraft platforms. ● GE Verona – We supply GE Verona with precision components that are used in ground-based turbines for electrical power generation. ● The U.S.
They key regulations impacting our business are further discussed below: Environmental Regulation and Employee Safety : We are subject to regulations administered by the United States Environmental Protection Agency, the Occupational Safety and Health Administration, various state agencies and county and local authorities acting in cooperation with federal and state authorities.
The key regulations impacting our business are further discussed below: Environmental Regulation and Employee Safety : We are subject to regulations administered by the United States Environmental Protection Agency, the Occupational Safety and Health Administration, various state agencies and county and local authorities acting in cooperation with federal and state authorities.
Therefore, one of our primary objectives is to maintain high ratings and leverage these metrics in our sales and marketing activities. Our sales cycle varies significantly, ranging from a few weeks to over a year, depending on the complexity of the product and manufacturing steps involved.
Therefore, one of our primary objectives is to maintain high ratings and leverage these metrics in our sales and marketing activities. 4 Our sales cycle varies significantly, ranging from a few weeks to over a year, depending on the complexity of the product and manufacturing steps involved.
The production of this aircraft is expected to continue for many years, with the DoD aiming for an inventory objective of 2,456 aircraft, in addition to expected demand from other countries. ● F-18 Hornet: The F-18 Hornet, the U.S. Navy’s primary fighter aircraft, principally operates from aircraft carriers and enjoys international use, notably in Finland and Australia.
The production of this aircraft is expected to continue for many years, with the DoD aiming for an inventory objective of 2,456 aircrafts, in addition to expected demand from other countries. 3 ● F-18 Hornet: The F-18 Hornet, the U.S. Navy’s primary fighter aircraft, principally operates from aircraft carriers and enjoys international use, notably in Finland and Australia.
We supply our Thrust Struts to Collins Aerostructures for integration into Geared Turbofan engines, utilized by smaller airlines such as those operating the Airbus A220 and Embraer E2 aircraft. Demand for these engines increased in 2024, thus reducing the concentration in the net sales attributable to military end users.
We supply our Thrust Struts to Collins Aerostructures for integration into Geared Turbofan engines, utilized by smaller airlines such as those operating the Airbus A220 and Embraer E2 aircraft. Demand for these engines increased in 2025, thus reducing the concentration in the net sales attributable to military end users.
At its core, lies a highly trained and close-knit team of over 180 individuals committed to driving excellence and precision in every aspect of our operations. We are firmly focused on securing new contract awards, improving operations and successful execution.
At its core, lies a highly trained and close-knit team of 160 individuals committed to driving excellence and precision in every aspect of our operations. We are firmly focused on securing new contract awards, improving operations and successful execution.
The bulk of our $117.9 million backlog is expected to ship over the next 24 months. but does not include possible or probable future orders pursuant to existing LTAs or probable contract renewals that would also contribute sales during such period.
The bulk of our $136.8 million backlog is expected to ship over the next 24 months. but does not include possible or probable future orders pursuant to existing LTAs or probable contract renewals that would also contribute sales during such period.
On the bottom-line, we reported a net loss of $1.4 million. As we enter fiscal 2025, we believe our future is looking brighter. Moving forward, our business strategy is geared towards competing and winning contracts that enable us to achieve sustainable and profitable business growth and delivering high quality reliable products to our customers.
On the bottom-line, we reported a net loss of $1.3 million. As we enter fiscal 2026, we believe our future is looking brighter. Our business strategy is geared towards competing and winning contracts that enable us to achieve sustainable and profitable business growth and delivering high quality reliable products to our customers.
Although it is anticipated that this plane will be ultimately replaced by the Joint Strike Fighter, we believe it will be flying for years to come. It boasts an impeccable combat record with no known losses in aerial combat. We ship most of our components directly to the U.S. DoD.
Although it is anticipated that this plane will be ultimately replaced by the Joint Strike Fighter, we believe it will be flying for years to come. It boasts an impeccable combat record. We ship most of our components directly to the U.S. DoD.
In recent years, we have strategically made significant investments to enhance our competitiveness and market position. For example, in fiscal 2024 and 2023, we invested $2,301,000 and $2,119,000 in new property and equipment to support our goals.
In recent years, we have strategically made significant investments to enhance our competitiveness and market position. For example, in fiscal 2025 and 2024, we invested $3,322,000 and $2,301,000 in new property and equipment to support our goals.
Although bookings are subject to wide variations in timing, resulting in period-to-period comparisons not necessarily being meaningful, we do use bookings and our book-to-bill as a gauge of future net sales. Our backlog, which can be considered our “funded backlog,” stood at $117.9 million as of December 31, 2024, marking a 19.9% increase from $98.3 million on December 31, 2023.
Although bookings are subject to wide variations in timing, resulting in period-to-period comparisons not necessarily being meaningful, we do use bookings and our book-to-bill as a gauge of future net sales. Our backlog, which can be considered our “funded backlog,” stood at $136.8 million as of December 31, 2025, marking a 16.0% increase from $117.9 million on December 31, 2024.
We have never been subject to such fines or disqualifications. Federal Acquisition Regulations: All our U.S government contracts and those of many of our customers are subject to the procurement rules and regulations of the Federal Acquisition Regulations. As such, many of our LTA agreements require us to adhere to these rules and regulations.
Federal Acquisition Regulations: All our U.S government contracts and those of many of our customers are subject to the procurement rules and regulations of the Federal Acquisition Regulations. As such, many of our LTA agreements require us to adhere to these rules and regulations.
Air Force F-15 and the U.S. Navy and Marine Corps F-18 fighters. It includes three variants: the conventional take-off and landing F-35A, the short take-off and vertical landing F-35B, and the carrier based variant F-35C. We have produced landing gear components for all three variants and currently manufacture landing gear components for the US Navy version.
It includes three variants: the conventional take-off and landing F-35A, the short take-off and vertical landing F-35B, and the carrier based variant F-35C. We have produced landing gear components for all three variants and currently manufacture landing gear components for the US Navy version.
We believe we maintain good relationships with the Union and expect to renew the collective bargaining agreement before it expires. 5 Regulations We believe that we are in compliance with all federal, state and local laws and regulations governing our operations and have obtained all material licenses and permits required for the operation of our business.
We believe we maintain good relationships with the Union. Regulations We believe that we are in compliance with all federal, state and local laws and regulations governing our operations and have obtained all material licenses and permits required for the operation of our business.
Sales and Marketing Sales and marketing activities during 2024 were robust, resulting in a book-to-bill ratio of 1.29x, growth in our funded backlog to $117.9 million and total unfilled contract values amounting to $271.3 million (including our $117.9 million funded backlog and all potential orders against LTA agreements).
Sales and Marketing Sales and marketing activities during 2025 were robust, resulting in a book-to-bill ratio of 1.36x, growth in our funded backlog to $136.8 million and total unfilled contract values amounting to $270.1 million (including our $136.8 million funded backlog and all potential orders against LTA agreements).
In addition, the Occupational Safety and Health Act, which requires employers to provide a place of employment that is free from recognized and preventable hazards that are likely to cause serious physical harm to employees, obligates employers to provide notice to employees regarding the presence of hazardous chemicals and to train employees in the use of such substances.
In addition, the Occupational Safety and Health Act, which requires employers to provide a place of employment that is free from recognized and preventable hazards that are likely to cause serious physical harm to employees, obligates employers to provide notice to employees regarding the presence of hazardous chemicals and to train employees in the use of such substances. 6 Federal Aviation Administration: We are subject to regulation by the Federal Aviation Administration (“FAA”) under the provisions of the Federal Aviation Act of 1958, as amended.
The total potential net sales under contracts actually awarded to us as of December 31, 2024, was $271.3 million, including the value of our existing funded backlog of $117.9 million. 4 Competition Winning a new contract award is highly competitive.
The total potential net sales under contracts actually awarded to us as of December 31, 2025, was $270.1 million, including the value of our existing funded backlog of $136.8 million. Competition Winning a new contract award is highly competitive.
It supports all five U.S. military services, federal, state, and local agencies, as well as partner and allied nations. The DLA procures items from us and provides them, as it deems fit, to other suppliers who assemble them into finished products. Platform and Program Profiles Most of our machined components and assemblies are integral to high-profile platforms and named programs.
The DLA procures items from us and provides them, as it deems fit, to other suppliers who assemble them into finished products. 2 Platform and Program Profiles Most of our machined components and assemblies are integral to high-profile platforms and named programs.
None of the information on our website, blog or any other website identified herein is incorporated by reference in this annual report and such information should not be considered a part of this annual report. 6
Information and updates about our Annual Meetings will also be posted on our website including on the “Home Page” and in the “Investor Relations” section. None of the information on our website, blog or any other website identified herein is incorporated by reference in this annual report and such information should not be considered a part of this annual report.
In some cases, customers may provide us with these raw materials as they may be able to obtain better processing or delivery schedules from other suppliers and in other cases the customer chooses to rely on us to manage suppliers.
In some cases, customers may provide us with raw materials as they may be able to obtain better processing or delivery schedules from other suppliers and in other cases the customer chooses to rely on us to manage suppliers. 5 The price and availability of many raw materials in the aerospace industry are susceptible to fluctuations in global markets and political conditions.
In fiscal 2024, bookings were $71,000,000, a 14% increase compared to $62,262,000 in 2023. Our “book-to-bill” ratio, which is our bookings divided by net sales, was 1.29x for 2024, a significant improvement over the 1.20x ratio of 2023.
In fiscal 2025, bookings were $65,000,000, a 8.5% decrease compared to $71,000,000 in 2024. Our “book-to-bill” ratio, which is our bookings divided by net sales, was 1.36x for 2025, an improvement over the 1.29x ratio of 2024.
The demand for MRO and after-market products can continue for many years, even decades, after the production line for new aircraft is shut down. 3 At a high level, we are able to monitor the DoD budget for both new production and operations and maintenance components as well as industry reports to gauge overall industry spending. While large U.S.
At a high level, we are able to monitor the DoD budget for both new production and operations and maintenance components as well as industry reports to gauge overall industry spending. While large U.S.
The price and availability of many raw materials in the aerospace industry are susceptible to fluctuations in global markets and political conditions. Most raw material suppliers are hesitant to commit to long-term contracts at fixed prices, posing a substantial risk given our strategy often entails entering into LTA agreements which require us to commit to long-term price commitments.
Most raw material suppliers are hesitant to commit to long-term contracts at fixed prices, posing a substantial risk given our strategy often entails entering into LTA agreements which require us to commit to long-term price commitments. However, many of our LTAs provide pricing protection when there is a large increase in the cost of raw materials.
These investments have increased production efficiency and speed, while maintaining closer tolerances, have expanded the size of products we can manufacture and have been appreciated by our customers. While we plan to continue this strategy in 2025 it will likely be on a much smaller level.
These investments have enabled us to increase production efficiency and speed, while maintaining closer tolerances, have expanded the size of products we can manufacture and have been appreciated by our customers. Any investment in 2026 will be at a much lower level.
In 2021, we secured a LTA to supply Chaff Pods for the CH-53K, the latest iteration in the CH-53 series. These pods deploy metallized strips to generate false radar targets, safeguarding the helicopters from missile threats. The CH-53K plays a crucial role in the U.S. Marine Corps’ plans to support a wide range of current and future operations.
It has evolved through several variants, with hundreds delivered and used by the U.S. Marine Corps. In 2021, we secured a LTA to supply Chaff Pods for the CH-53K, the latest iteration in the CH-53 series. These pods deploy metallized strips to generate false radar targets, safeguarding the helicopters from missile threats.
We are subject to inspections by the FAA and may be subjected to fines and other penalties (including orders to cease production) for noncompliance with FAA regulations. Our failure to comply with applicable regulations could result in the termination of or our disqualification from some of our contracts, which could have a material adverse effect on our operations.
Our failure to comply with applicable regulations could result in the termination of or our disqualification from some of our contracts, which could have a material adverse effect on our operations. We have never been subject to such fines or disqualifications.
All of our employees are covered under a co-employment agreement with Insperity Services, LLC, a professional employer organization. This arrangement allows us to provide employees with comprehensive benefits at a lower cost than we could provide. Our AIM subsidiary has a collective bargaining agreement with the United Service Workers, IUJAT, Local 355 (the “Union”).
This arrangement allows us to provide employees with comprehensive benefits at a lower cost than we could provide. Our AIM subsidiary has a collective bargaining agreement with the United Service Workers, IUJAT, Local 355 (the “Union”). This agreement is effective until December 31, 2027 and covers the majority of AIM’s 125 personnel.
Navy, a small number have been sold to U.S. allies, notably Japan. ● UH-60 Black Hawk Helicopter : We supply flight critical components, such as the primary flight control assembly and the tail-rotor gearbox, for the UH-60 Black Hawk Helicopter. Serving as the primary helicopter for the U.S.
Demand for these engines is anticipated to increase over the next few years. ● UH-60 Black Hawk Helicopter : We supply flight critical components, such as the primary flight control assembly and the tail-rotor gearbox, for the UH-60 Black Hawk Helicopter. Serving as the primary helicopter for the U.S.
The following platforms and programs (ranked in descending order by their 2024 net sales), accounted for 79.3% and 85.2% of our net sales in 2024 and 2023, respectfully: ● The E-2D Hawkeye: We provide the main and nose landing gear, as well as the arresting gear for the E-2D Hawkeye, a twin-engine, tactical aircraft utilized for providing advanced airborne warning and control for carrier-based operations.
In 2024 we received a purchase order to manufacture Swashplates and Hubs to be used on the CH-53K. ● The E-2D Hawkeye: We provide the main and nose landing gear, as well as the arresting gear for the E-2D Hawkeye, a twin-engine, tactical aircraft utilized for providing advanced airborne warning and control for carrier-based operations.
Deployment of new helicopters is projected to continue through at least 2027, with ongoing sustainment activities anticipated for many years thereafter. 2 ● Pratt & Whitney Geared Turbo-Fan Engine (“GTF”): Used in commercial aviation, the GTF represents a new generation of jet engines that offer improved fuel efficiency, reduced emissions, and lower noise levels compared to traditional turbofan engines.
The following platforms and programs (ranked in descending order by their 2025 net sales), accounted for 79.7% and 79.3% of our net sales in 2025 and 2024, respectfully: ● Pratt & Whitney Geared Turbo-Fan Engine (“GTF”): Used in commercial aviation, the GTF represents a new generation of jet engines that offer improved fuel efficiency, reduced emissions, and lower noise levels compared to traditional turbofan engines.
We sell to several business units and/or subsidiaries of RTX, including Collins Aerospace (which includes Collins Landing Systems and Collins Aerostructures) and Pratt Whitney.
We have cultivated long-standing relationships with many large and well-known customers including: ● RTX Corporation (“RTX” ) – a multinational aerospace and defense conglomerate and a major player in the aerospace and defense industry. We sell to several business units and/or subsidiaries of RTX, including Collins Aerospace (which includes Collins Landing Systems and Collins Aerostructures) and Pratt Whitney.
Demand for these engines is anticipated to increase over the next few years. ● The CH-53 Helicopter (including the CH53K variant): Developed in the 1960s and manufactured by Sikorsky, the CH-53 is recognized as the largest and most powerful helicopter in the U.S. military. It has evolved through several variants, with hundreds delivered and used by the U.S. Marine Corps.
Deployment of new helicopters is projected to continue through at least 2027, with ongoing sustainment activities anticipated for many years thereafter. ● The CH-53 Helicopter (including the CH53K variant): Developed in the 1960s and manufactured by Sikorsky, the CH-53 is recognized as the largest and most powerful helicopter in the U.S. military.
Our backlog, which represents the value of all funded orders received, stood at $117.9 million an increase of 19.9% as compared to our backlog on December 31, 2023. Our marketing efforts bore fruit and we secured our first order with a new foreign-based defense and aerospace prime customer. We made significant investments in capital equipment and related processes.
Additionally, we expanded our sales and marketing efforts, with a sharp focus on expanding relationships with customers and cultivating new ones. We finished 2025 with $47.9 million of net sales. Our backlog, which represents the value of all funded orders received, stood at $136.8 million an increase of 16.0% as compared to our backlog on December 31, 2024.
In 2023 we received a purchase order to manufacture Swashplates and Hubs to be used on the CH-53K. Initial deliveries of these parts has commenced. ● The F-35 Lightning II (also known as the Joint Strike Fighter): Manufactured by Lockheed Martin, the Joint Strike Fighter is a stealth fighter aircraft designed to replace the U.S.
Navy, a small number have been sold to U.S. allies, notably Japan. ● The F-35 Lightning II (also known as the Joint Strike Fighter): Manufactured by Lockheed Martin, the Joint Strike Fighter is a stealth fighter aircraft designed to replace the U.S. Air Force F-15 and the U.S. Navy and Marine Corps F-18 fighters.
Flight critical components are frequently replaced on aircraft on a flight time, or flight cycle basis.
Flight critical components are frequently replaced on aircraft on a flight time, or flight cycle basis. The demand for MRO and after-market products can continue for many years, even decades, after the production line for new aircraft is shut down.
The rest of our net sales are attributable to commercial aviation uses and, to a much lesser extent, ground power electricity generation and other uses. We have cultivated long-standing relationships with many large and well-known customers including: ● RTX Corporation (“RTX” ) – a multinational aerospace and defense conglomerate and a major player in the aerospace and defense industry.
Customer Profiles In 2025 and 2024, approximately 58.3% and 69.9% of our net sales were attributed to customers who use our products for end-use on military aircraft. The rest of our net sales are attributable to commercial aviation uses and, to a much lesser extent, ground power electricity generation and other uses.
Federal Aviation Administration: We are subject to regulation by the Federal Aviation Administration (“FAA”) under the provisions of the Federal Aviation Act of 1958, as amended. The FAA prescribes standards and licensing requirements for aircraft and aircraft components.
The FAA prescribes standards and licensing requirements for aircraft and aircraft components. We are subject to inspections by the FAA and may be subjected to fines and other penalties (including orders to cease production) for noncompliance with FAA regulations.
However, many of our LTAs provide pricing protection when there is a large increase in the cost of raw materials. Employees As of March 31, 2025, we employed 184 people. Of these, 98 were involved in manufacturing and production activities, 26 were in quality control, 52 were in administration, and the remaining 8 were in sales and procurement.
Employees As of March 7, 2026, we employed 160 people. Of these, 89 were involved in manufacturing and production activities, 20 were in quality control, 45 were in administration, and the remaining 6 were in sales and procurement. All of our employees are covered under a co-employment agreement with Insperity Services, LLC, a professional employer organization.
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Additionally, we expanded our sales and marketing efforts, with a sharp focus on expanding relationships with customers and cultivating new ones. Fiscal 2024 marked a year of progress and positioning for growth. We finished 2024 with $55.1 million of net sales.
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Recent Developments On February 17, 2026, we filed a Current Report on Form 8-K (the “Merger 8-K”) with respect to the Agreement and Plan of Merger (the “ Merger Agreement ”) we and Transitory Air Sub LLC , our wholly owned subsidiary (“ Merger Sub ”), entered into on February 16, 2026, with Tenax Aerospace Acquisition, LLC, a Delaware limited liability company (“ Tenax ”).
Removed
This agreement is effective until December 31, 2027 and covers the majority of AIM’s 125 personnel. We are required to make a monthly contribution to Union’s United Welfare Fund and the United Services Worker’s Security Fund, the sole pension benefit for covered employees. We are not obligated to provide any future defined benefits.
Added
Upon consummation of the Merger Agreement, Tenax will become a wholly owned Subsidiary of AIR. Tenax is a leading provider of special mission aviation solutions that combine aircraft sourcing, financing and modification with aviation services including pilots, maintenance and other types of program support.
Removed
Additionally, the collective bargaining agreement contains a “no-strike” clause, and a “no-lock-out” clause.
Added
Additionally, they have long standing relationships with key government customers. 1 Pursuant to the Merger Agreement, we will issue shares of our common stock (the “ Merger Consideration ”) to the holders of the membership interests of Tenax at the Closing (the “ Tenax Members ”).
Removed
Information and updates about our Annual Meetings will also be posted on our website including on the “Home Page” and in the “Investor Relations” section.
Added
A portion of the Merger Consideration allocated in respect of membership interests of Tenax underlying certain Tenax warrants that remain unexercised as of the Closing, if any, will be reserved by us for future issuance upon the exercise of such warrants.
Added
The number of shares of our common stock to be issued to the Tenax Members will be adjusted based on a calculation of AIR Net Indebtedness (as defined in the Merger Agreement).
Added
Based on the amount of Air Net Indebtedness as of December 31, 2025, the calculation would result in the issuance of approximately 112.5 million shares of AIR Common Stock.
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Consequently, based upon the calculation of the Merger Consideration as of December 31, 2025, following the closing of the Merger, the Tenax Members will collectively own approximately 95% of the outstanding shares of our Common stock.
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For a more complete description of the Merger Agreement, transactions to be consummated, actions to be taken and agreements entered into or to be entered in connection therewith, reference is made to the Merger 8-K and the full text of the Merger Agreement and the documents that are exhibits thereto which are incorporated herein by reference.
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The closing of the merger contemplated by the Merger Agreement (the “Merger”) is subject to risks and uncertainties and certain specified conditions, including, among other things: (a) the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Act, (b) the listing of the Merger Consideration on the NYSE American, and (c) other customary conditions for a transaction such as the Merger, such as the absence of any legal restraint prohibiting the consummation of the Merger and there not having occurred with respect to AIR or Tenax’s business a material adverse event, subject to certain customary exceptions.
Added
Except where specifically noted, the discussion of our business, operations, management team and financial results contained herein, gives no effect to changes that would occur as a result of or subsequent to the consummation of the Merger.
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It supports all five U.S. military services, federal, state, and local agencies, as well as partner and allied nations.
Added
The CH-53K plays a crucial role in the U.S. Marine Corps’ plans to support a wide range of current and future operations.
Added
The agreement requires us to make specified contributions to the Union’s United Welfare Fund and Unted Service Worker’s Security Fund which provide pension benefits to our employees. We are not obligated to provide any additional pension benefits to our employees. Additionally, the collective bargaining agreement contains a “no-strike” clause, and a “no-lock-out” clause.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIf any of the events described in the risks below actually occurs, our financial condition or operating results may be materially and adversely affected, the price of our common stock may decline, perhaps significantly, and you could lose all or a part of your investment.
Biggest changeIf any of the events described in the risks below actually occurs, our financial condition or operating results may be materially and adversely affected, the price of our common stock may decline, perhaps significantly, and you could lose all or a part of your investment. 7 The risks below can be characterized into four groups: 1) Risks related to our business, including risks specific to the defense and aerospace industry; 2) Risks related to our indebtedness; 3) Risks related to the proposed Merger with Tenax Aerospace Acquisition, LLC; and 4) Risks related to our status as a public company and our common stock.
Such additional financing or refinancing may involve the issuance of debt, equity and/or securities convertible into or exercisable or exchangeable for our equity securities and may not be available to us on reasonable terms, if at all.
Such additional financing or refinancing may involve the issuance of debt, equity or securities convertible into or exercisable or exchangeable for our equity securities and may not be available to us on reasonable terms, if at all.
For instance, a decrease in U.S. government defense spending or a strategy shift to rocket and drone platforms instead of large military aircraft platforms, could curtail demand for our landing gear parts and other components we provide which would likely have a materially adverse effect on our business strategy, revenues, operating results and financial condition.
For instance, a decrease in U.S. government defense spending or a strategy shift to rocket and drone platforms instead of helicopters and large military aircraft platforms, could curtail demand for landing gear parts and other components we provide which would likely have a materially adverse effect on our business strategy, revenues, operating results and financial condition.
There are significant costs involved with producing a small number of initial units of any new product and it may not be possible to recoup such costs on later production runs. Due to fixed contract pricing, increasing contract costs expose us to reduced profitability and the potential loss of business. The cost estimation process requires significant judgment and expertise.
There are significant costs involved with producing a small number of initial units of any new product and it may not be possible to recoup such costs on later production runs. 10 Due to fixed contract pricing, increasing contract costs expose us to reduced profitability and the potential loss of business. The cost estimation process requires significant judgment and expertise.
If the U.S. economy continues to experience inflation, our labor costs may further increase which could have a material adverse effect on our business, financial condition and results of operations. 10 We are subject to strict governmental regulations relating to the environment, which could result in fines and remediation expense in the event of non-compliance.
If the U.S. economy continues to experience inflation, our labor costs may further increase which could have a material adverse effect on our business, financial condition and results of operations. We are subject to strict governmental regulations relating to the environment, which could result in fines and remediation expense in the event of non-compliance.
A decrease in demand for our products, stemming from reduced aircraft production or diminished aircraft utilization, would adversely affect our future operating results and financial condition. Changes in outsourcing strategies and intense competition in our markets may lead to a reduction in our revenues and market share. The defense and aerospace component manufacturing market is highly competitive.
A decrease in demand for our products, stemming from reduced aircraft production or diminished aircraft utilization, would adversely affect our future operating results and financial condition. 9 Changes in outsourcing strategies and intense competition in our markets may lead to a reduction in our revenues and market share. The defense and aerospace component manufacturing market is highly competitive.
Because we base our operating expenses on anticipated revenue trends and a high percentage of our expenses are fixed in the short term, any delay in generating or recognizing forecasted revenues could significantly harm our business. Fluctuations in quarterly results may cause earnings to fall below the expectations of securities analysts and investors.
Because we base our operating expenses on anticipated revenue trends and a high percentage of our expenses are fixed in the short term, any delay in generating or recognizing forecasted revenues could significantly harm our business. 21 Fluctuations in quarterly results may cause earnings to fall below the expectations of securities analysts and investors.
To the extent we have not complied with such laws, rules, and regulations, or requirements imposed by our LTAs, we could be subject to significant fines, limitations the products and services we provide, reputational harm, and other regulatory consequences, each of which may be significant and could adversely affect our business, operating results, and financial condition.
To the extent we have not complied with such laws, rules, and regulations, or requirements imposed by our LTAs, we could be subject to significant fines, limitations on the products and services we provide, reputational harm, and other regulatory consequences, each of which may be significant and could adversely affect our business, operating results, and financial condition.
To perform on new programs, we may be required to incur material up-front costs which may not have been separately negotiated and may not be recoverable. Such charges and the loss of up-front costs could have a material impact on our liquidity. The need to control our expenses places a significant strain on our management and operational resources.
To perform on new programs, we may be required to incur material up-front costs which may not have been separately negotiated and may not be recoverable. Such charges and the loss of up-front costs could have a material impact on our liquidity. 11 The need to control our expenses places a significant strain on our management and operational resources.
Many LTAs that we sign with our customers also require us to comply with strict vendor clauses including replications of specific sections of the FAR. These legal and regulatory regimes, including the laws, rules, and regulations thereunder, may be modified, interpreted, and applied in an inconsistent manner.
Many LTAs that we sign with our customers require us to comply with strict vendor clauses including replications of specific sections of the FAR. These legal and regulatory regimes, including the laws, rules, and regulations thereunder, may be modified, interpreted, and applied in an inconsistent manner.
Some LTA agreement with customers allow us to increase our prices due to increases in the price of raw materials. However, these LTA agreements generally require that we first absorb all or a portion of the price increases before being able to pass on the increase to the customer.
Some LTA agreements with customers allow us to increase our prices due to increases in the price of raw materials. However, these LTA agreements generally require that we first absorb all or a portion of the price increases before being able to pass on the increase to the customer.
In order to maintain and increase production levels, we must hire new employees and machinists for our two state-of-the art manufacturing facilities and we may not be able to do so or the costs to hire and/or train them may significantly exceed our budget.
In order to increase production levels, we must hire new employees and machinists for our two state-of-the art manufacturing facilities and we may not be able to do so or the costs to hire and/or train them may significantly exceed our budget.
However, certain materials, components and services are exclusively available from a sole or limited number of suppliers and we are reliant upon them. Additionally, material sourced from overseas are susceptible to supply chain disruptions stemming from global events and political decisions.
However, certain materials, components and services are exclusively available from a sole or limited number of suppliers and we are reliant upon them. Additionally, materials sourced from overseas are susceptible to supply chain disruptions stemming from global events and political decisions.
There are risks associated with offering new services and even if performed timely and correctly, it is likely that our margins for these new services will be relatively low, or even negative, in the initial phases when volume is low.
There are risks associated with offering new products and services and even if performed timely and correctly, it is likely that our margins for these new services will be relatively low, or even negative, in the initial phases when volume is low.
Any system or service disruptions caused by hackers or even those caused by projects to improve our information technology capabilities, if not mitigated, could significantly disrupt our production and assembly could have an immediate material adverse effect on our business.
Any system or service disruptions caused by hackers or those caused by projects to improve our information technology capabilities, if not mitigated, could significantly disrupt our production and assembly and could have an immediate material adverse effect on our business.
We subject to extensive laws, rules and regulations directed to those who conduct business over the internet, in addition to security requirements imposed by our clients, including those governing privacy, data governance, data protection and cybersecurity.
We are subject to extensive laws, rules and regulations directed to those who conduct business over the internet, in addition to security requirements imposed by our clients, including those governing privacy, data governance, data protection and cybersecurity.
Although our common stock is listed on the NYSE American, there is only a limited number of our shares available in the public float and the related market capitalization of such float is relatively small.
Although our common stock is listed on the NYSE American, there is only a limited number of our common shares available in the public float and the related market capitalization of our float is relatively small.
Conflicts between nations (such as the ongoing Russia-Ukraine conflict), or between nations and terrorist organizations (such as the ongoing conflict between terrorist groups and Israel), as well as terrorist attacks, natural disasters (such as hurricanes, fires, floods and earthquakes), unusually adverse weather conditions, pandemic outbreaks or a banking crisis, the imposition of tariffs, shifts in government alliances, could adversely affect our operations and financial performance.
Conflicts between nations (such as the ongoing Russia-Ukraine conflict or the conflict with Iran), or between nations and terrorist organizations (such as the ongoing conflict between terrorist groups and Israel), as well as terrorist attacks, natural disasters (such as hurricanes, fires, floods and earthquakes), unusually adverse weather conditions, pandemic outbreaks or a banking crisis, the imposition of tariffs, or shifts in government alliances, could adversely affect our operations and financial performance.
If any of these events affect us or our suppliers, it could result in an inability on our part to manufacture products and/or result in lost sales, materially affecting our operations and financial performance. Additionally, such events could disrupt travel, making it a challenge to communicate with our customers, as evidenced during the coronavirus pandemic.
If any of these events impact us or our suppliers, it could result in an inability on our part to manufacture products and/or result in lost sales, materially affecting our operations and financial performance. Additionally, such events could disrupt travel, making it a challenge to communicate with our customers, as evidenced during the coronavirus pandemic.
Any requirement to write down the value of our inventory due to obsolescence, excess and slow moving, or a drop in the price of materials could have a material adverse effect on our consolidated financial position and results of operations. 9 We do not own the intellectual property rights to products we produce.
Any requirement to write down the value of our inventory due to obsolescence, excess and slow moving quantities or a drop in the price of materials could have a material adverse effect on our consolidated financial position and results of operations. We do not own the intellectual property rights to products we produce.
Any decision by a customer to rely upon an alternate supplier for some or all of its needs could significantly harm our business, our operating results and our financial condition. We may lose sales if our suppliers fail to meet our needs or ship raw materials to us on timely.
Any decision by a customer to rely upon an alternate supplier for some or all of its needs could significantly harm our business, our operating results and our financial condition. We may lose sales if our suppliers fail to meet our needs or ship raw materials to us on schedule.
We must deliver our products timely with high quality to ensure smooth operation of our customer production lines. In order to do so, we attempt to procure our raw materials, parts and components as well as subcontracted services from various sources and utilize multiple subcontractors.
We must deliver our products timely with high quality to ensure smooth operation of our customers’ production lines. In order to do so, we attempt to procure our raw materials, parts and components as well as subcontracted services from various sources and utilize multiple subcontractors.
Consequently, if a customer desires to use another manufacturer to fabricate its part or subassembly, it would be free to do so, which could have a material adverse effect on our business, our operating results and financial condition. There are risks associated with new programs.
Consequently, if a customer desires to use another manufacturer to fabricate its part or subassembly, it is free to do so, which could have a material adverse effect on our business, our operating results and financial condition. There are risks associated with new programs.
Government or other nations, or the perception among our customers regarding the likelihood of such shifts. 7 Although we have cultivated long-standing relationships with many of our customers, the aerospace and defense industry is characterized by a smaller number of large and well-known prime customers.
Government or other nations, or the perception among our customers regarding the likelihood of such shifts. Although we have cultivated long-standing relationships with many of our customers, the aerospace and defense industry is characterized by a small number of large and well-known prime customers.
Although we develop our internal processes, nearly all the parts and subassemblies we produce are built to customer specifications and the customer owns the intellectual property, if any, related to the product.
Although we develop internal production processes, nearly all the parts and subassemblies we produce are built to customer specifications and the customer owns the intellectual property, if any, related to the product.
Reasons for cost growth include unavailability and productivity of labor, the nature and complexity of the work to be performed, the effect of change orders, the availability of materials, the effect of delays in performance, availability and timing of funding from the customer, natural disasters, supply chain disruptions and the inability to recover any claims for added services necessary to complete production.
Reasons for cost growth include unavailability and productivity of labor, the nature and complexity of the work to be performed, the effect of change orders, the availability of materials, the ability of subcontractors to meet their commitments, the effect of delays in performance, availability and timing of funding from the customer, natural disasters, supply chain disruptions and the inability to recover any claims for added services necessary to complete production.
Government, foreign governments and commercial airlines. As such, in most cases, we are required to maintain confidential and proprietary information on our information systems. Hackers, whether they be individuals, entities or hostile enemies, may attempt to penetrate our network or those of our third-party hosting and storage providers, to gain access to confidential and proprietary data.
As such, in most cases, we are required to maintain confidential and proprietary information on our information systems. Hackers, whether they be individuals, entities or hostile enemies, may attempt to penetrate our network or those of our third-party hosting and storage providers, to gain access to confidential and proprietary data.
Because our common stock is thinly traded, the trading price may be volatile due to factors concerning our operations, such as variations in our operating results, failure to meet the covenants under the Current Credit Facility, news regarding the loss of a major customer or termination or a reduction in funding for a program we are on, the loss of management personnel, the outcome or perception of the potential outcome of any litigation, general industry conditions and significant industry developments.
Because our common stock is thinly traded, the trading price may be volatile due to factors concerning our operations, such as variations in our operating results, failure to meet the covenants under the Current Credit Facility, news regarding the loss of a major customer or termination or a reduction in funding for a program we are on, the loss of management personnel, the outcome or perception of the potential outcome of any litigation, public perception of the business prospects of Tenax and the likelihood of consummation of the Merger with Tenax, general industry conditions and significant industry developments.
Some of the products we produce require months to produce and we sometimes produce products in excess of the number ordered intending to sell the excess as spares when orders arise. As a result, our inventory turns slowly and ties up our working capital. Our inventory represented approximately 56% of our assets as of December 31, 2024.
Some of the products we produce require months to produce and we sometimes produce products in excess of the number ordered intending to sell the excess as spares when orders arise. As a result, our inventory turns slowly and ties up our working capital. Our inventory represented approximately 58.7% of our assets as of December 31, 2025.
Additionally, the terms and covenants of our Current Credit Facility do not currently allow us to. In the future should we decide to pay dividends, we would need to seek covenant changes or a waiver under our Current Credit Facility. There can be no assurance our lenders would agree to covenant changes or grant a waiver.
The terms and covenants of our Current Credit Facility do not allow us to pay dividends. In the future, should we decide to pay dividends, we would need covenant changes or a waiver under our Current Credit Facility. There can be no assurance our lender would agree to covenant changes or grant a waiver.
Russia’s ongoing war with Ukraine, the conflict in the Middle East, continued tensions between the US and the European Union with China and Russia, and tension between the US and the European Union with respect to funding Ukraine’s war effort, tariffs and other issues, may alter countries’ willingness to rely on others as the source of certain products and material.
Russia’s ongoing war with Ukraine, the conflict in the Middle East (including the ongoing U.S. military operations in Iran), continued tensions between the US and the European Union with China and Russia, and tension between the US and the European Union with respect to funding Ukraine’s war effort, tariffs and other issues, may alter countries’ willingness to rely on others as the source of certain products and material.
Refinancing may require us to pay higher interest rates than we currently pay, agree to more restrictive business or financial covenants or involve the issuance of debt, equity and/or new securities convertible into or exercisable or exchangeable for our common stock which may adversely affect the trading price of our common stock and the interests of our existing stockholders.
If we were not to consummate the Merger Agreement, refinancing our indebtedness may require us to pay higher interest rates than we currently pay, agree to more restrictive business or financial covenants or involve the issuance of debt, equity or new securities convertible into or exercisable or exchangeable for our common stock which may adversely affect the trading price of our common stock and the interests of our existing stockholders.
We must devote substantial time and resources to prepare bids and proposals and may not have contracts awarded to us. Even if we win contracts, there can be no assurance that the prices that we bid will be sufficient to allow us to generate a profit from any particular contract.
We must devote substantial time and resources to prepare bids and proposals which may not result in contract awards to us. Even if we win contracts, there can be no assurance that the prices that we bid will be sufficient to allow us to generate a profit from any particular contract.
From time-to-time in order to reduce our dependence on subcontractors, increase our customers’ reliance upon us or increase our gross margins we offer new services to our customers, such as painting and finishing products we already manufacture for them.
From time-to-time, to reduce our dependence on subcontractors, increase our customers’ reliance upon us or increase our gross margins we offer new services to our customers, such as painting and finishing products we manufacture.
Our management determined that as of December 31, 2024, our disclosure controls and procedures and internal control over financial reporting were not effective due to a material weakness regarding appropriate segregation of duties with respect to and validation of data produced by certain modules of our financial IT systems. We first determined this weakness in fiscal 2022.
Our management determined that as of December 31, 2025, our disclosure controls and procedures and internal control over financial reporting were not effective due to a material weakness regarding appropriate segregation of duties with respect to and validation of data produced by certain modules of our financial IT systems.
If we are found to be in violation of any of these rules, regulations or permits, we may be subject to fines, remediation expenses and the obligation to change our business practice, any of which could result in substantial costs that would adversely impact our business operations and financial condition.
If we are found to be in violation of any of these rules, regulations or permits, we may be subject to fines, remediation expenses and the obligation to change our business practice, any of which could result in substantial costs that would adversely impact our business operations and financial condition. 12 We may be subject to fines and disqualification for non-compliance with Federal Aviation Administration regulations.
Future financings or acquisitions may adversely affect the market price of our common stock. Future sales or issuances of our common stock, including upon conversion of our outstanding convertible notes, upon exercise of our outstanding warrants and options, or as part of future financings or acquisitions, would be substantially dilutive to the outstanding shares of common stock.
Future sales or issuances of our common stock, including upon conversion of our outstanding convertible notes, upon exercise of our outstanding warrants and options, or as part of the Merger and other future financings or acquisitions, would be substantially dilutive to the outstanding shares of common stock.
Refinancing our indebtedness may require us to pay higher interest rates than we currently pay, agree to more restrictive business or financial covenants or involve the issuance of debt, equity and/or new securities convertible into or exercisable or exchangeable for our common stock.
If we were not to consummate the Merger Agreement with Tenax, refinancing our indebtedness may require us to pay higher interest rates than we currently pay, agree to more restrictive business or financial covenants or involve the issuance of debt, equity or new securities convertible into or exercisable or exchangeable for our common stock.
A significant increase in costs in 2025 or any failure to maintain our controls or operation of these controls, could harm our operations, decrease the reliability of our financial reporting, and cause us to fail to meet our financial reporting obligations, which could adversely affect our business and reduce our stock price. 17 ITEM 1B. UNRESOLVED STAFF COMMENTS None.
A significant increase in costs in 2026 or any failure to maintain our controls or operation of these controls, could harm our operations, decrease the reliability of our financial reporting, and cause us to fail to meet our financial reporting obligations, which could adversely affect our business and reduce our stock price.
If we are unable to consummate such additional financing or re-financing, the trading price of our common stock could be adversely affected, and the terms of such financing may adversely affect the interests of our existing stockholders.
If we are unable to obtain additional financing or refinance our existing debt, the trading price of our common stock could be adversely affected. If we are able to obtain additional financing or refinance our existing debt, the terms of such financing may adversely affect the interests of our existing stockholders.
Moreover, sales of our common stock in the public market, or the perception that such sales could occur, could negatively impact the price of our common stock.
The sale of substantial amounts of shares of our common stock in the public market or the perception that such sales could occur, could negatively impact the market price of shares of our common stock.
In addition, the market price of our common stock may be affected by factors unrelated to our operations, such as general economic factors, government budgeting decisions affecting our industry and developments in the financial markets and availability of credit.
In addition, the market price of our common stock may be affected by factors unrelated to our operations, such as general economic factors, government budgeting decisions affecting our industry and developments in the financial markets and availability of credit. Our operating results and financial condition may fluctuate on a quarterly and annual basis.
As of December 31, 2024, we had approximately $18,130,000 of indebtedness outstanding pursuant to our Current Credit Facility that matures on December 30, 2025 with Webster Bank (“Current Credit Facility”) and approximately $6,162,000 of subordinated notes payables (“Related Party Notes”) that mature on July 1, 2026 and which are held by two directors Michael N. Taglich and Robert F.
As of December 31, 2025, we had approximately $23,473,000 of indebtedness outstanding pursuant to our Current Credit Facility that matures on September 30, 2026 with Webster Bank (“Current Credit Facility”) and approximately $4,871,000 of subordinated notes (“Related Party Notes”) that mature on October 1, 2026, which are held by two directors Michael N. Taglich and Robert F. Taglich.
We have never been subject to such fines or disqualification. Cyber security attacks, internal system or service failures, and any unauthorized access to our customer data will have an adverse effect on our business and reputation. Most of our products are used by large aerospace and prime contractors who ultimately provide them to the U.S.
Cyber security attacks, internal system or service failures, and any unauthorized access to our customer data will have an adverse effect on our business and reputation. Most of our products are used by large aerospace and prime contractors who ultimately provide them to the U.S. Government, foreign governments and commercial airlines.
The weighted average interest rate we paid in 2024 on borrowings outstanding on the Current Credit Facility was 7.66% and this interest rate may increase in the future.
The weighted average interest rate we paid in 2025 on borrowings outstanding on the Current Credit Facility was 6.72% and this interest rate may increase in the future.
Two of our directors, Michael N. Taglich and Robert F. Taglich, and their affiliates own a significant portion of our outstanding shares of common stock. They also hold $4,871,000 of Related Party Notes as of March 31, 2025, some of which are convertible into our common stock.
Taglich, and their affiliates own a significant portion of our outstanding shares of common stock. They also held $4,871,000 of Related Party Notes as of December 31, 2025, some of which are convertible into our common stock.
Moreover, expenditures incurred in implementing cyber security and other procedures and controls could adversely affect our results of operations and financial condition. 11 We are subject to an extensive and highly-evolving regulatory landscape, and requirements imposed by our customers to secure our communications, and any adverse changes to, or our failure to comply with, any laws and regulations or requirements of our clients could adversely affect our brand, reputation, business, operating results, and financial condition.
We are subject to an extensive and evolving regulatory landscape and requirements imposed by our customers to secure our communications, and any adverse changes to, or our failure to comply with, any laws and regulations or requirements of our clients could adversely affect our brand, reputation, business, operating results, and financial condition.
Since it is unlikely that we will be able to pay this debt, we have initiated steps to satisfy portions and refinance the balance.
Since it is unlikely that we will be able to pay this debt, we have initiated steps to satisfy portions and refinance the balance, including entering into a Merger Agreement with Tenax.
If we do, we may also need to obtain the agreement of holders of portions of our debt to extend or otherwise refinance such debt. In order to gain consent, we may need to offer these holders increases in the rates of interest they receive or otherwise compensate them through payments of cash or issuances of our equity securities.
In order to gain their consent, we may need to offer these holders increases in the rates of interest they receive or otherwise compensate them through payments of cash or issuances of our equity securities.
We depend on revenues from these relationships and any loss, cancellation, reduction, or interruption in these relationships could harm our business. Our products are purchased by a relatively small number of large aerospace and defense customers who incorporate them into larger products for ultimate end-use by the U.S. Government, international governments, and commercial global airlines.
A majority of our revenue is derived from sales to a limited number of customers and any loss, cancellation, reduction, or interruption in these relationships could harm our business. Our products are purchased by a relatively small number of large aerospace and defense customers who incorporate them into larger products for ultimate end-use by the U.S.
We may be subject to fines and disqualification for non-compliance with Federal Aviation Administration regulations. We are subject to regulation by the FAA under the provisions of the Federal Aviation Act of 1958, as amended. The FAA prescribes standards and licensing requirements for aircraft and aircraft components.
We are subject to regulation by the FAA under the provisions of the Federal Aviation Act of 1958, as amended. The FAA prescribes standards and licensing requirements for aircraft and aircraft components. We are subject to inspections by the FAA and may be subjected to fines and other penalties (including orders to cease production) for noncompliance with FAA regulations.
Any dilution or potential dilution may cause our stockholders to sell their shares, which would contribute to a downward movement in the price of common stock. 16 We incur significant costs as a result of operating as a public company, and our management is required to devote substantial effort to compliance requirements, including establishing and maintaining internal controls over financial reporting, and we may be exposed to potential risks if we are unable to comply with these requirements.
We incur significant costs as a result of operating as a public company, and our management is required to devote substantial effort to compliance requirements, including establishing and maintaining internal controls over financial reporting, and we may be exposed to potential risks if we are unable to comply with these requirements. Costs to comply may increase in the future.
While we believe that, in many cases, alternative supplies, components, assemblies, or subcontractors could be secured, sourcing substitutes may necessitate the development of new suppliers or require product re-engineering and qualification, potentially leading to shipment delays.
While we believe that, in many cases, alternative supplies, components, assemblies, or subcontractors could be secured, sourcing substitutes may necessitate the development of new suppliers or require product re-engineering and qualification, potentially leading to shipment delays. Any interruptions in raw material shipments or subcontracted service performance could significantly harm our business, our operating results and our financial condition.
Although we have plans to improve operating efficiencies at our current sales levels, we may not be able to do so. Further, any reduction in sales volume would likely cause us to absorb the fixed overhead costs over a smaller base of sales, causing our gross profit as a percentage of sales to decline from current levels.
Further, any reduction in sales volume would likely cause us to absorb the fixed overhead costs over a smaller base of sales, causing our gross profit as a percentage of sales to decline from current levels.
Government, other countries and the public to such events, and the resulting macroeconomic disruption to the financial markets could lead to increased volume and price volatility for publicly traded securities which could adversely impact the price of our common stock. 15 We can provide no assurance that our common stock will continue to be listed on the NYSE American.
Government, other countries and the public to such events, and the resulting macroeconomic disruption to the financial markets could lead to increased volume and price volatility for publicly traded securities which could adversely impact the price of our common stock.
Because of the uncertainty regarding our ability to refinance our indebtedness, our auditors have included an explanatory paragraph in their opinion as to our ability to continue as a going concern.
Our financial statements included in this Report have been prepared on the assumption that we will continue as a going concern. Because of the uncertainty regarding our ability to refinance our indebtedness our auditors have included an explanatory paragraph in their opinion as to our ability to continue as a going concern.
The market price of our common stock is likely to be highly volatile, which could result in substantial losses to investors. The market price of our common stock has historically been volatile and is likely to continue to be volatile.
The market price of our common stock has historically been volatile and is likely to continue to be volatile.
Supply chain disruptions resulting from escalating political tensions and the economic disruption resulting from retaliatory measures between any countries could result in production delays and cancellations of programs. 12 Additionally, any material changes to the current aerospace and defense supplier structure resulting from geo-political tensions or otherwise could disrupt the markets for raw materials and supplies and our ability and the ability of our suppliers to obtain raw materials, may be significantly impacted.
Additionally, any material changes to the current aerospace and defense supplier structure resulting from geo-political tensions or otherwise could disrupt the markets for raw materials and supplies and our ability and the ability of our suppliers to obtain raw materials, may be significantly impacted.
Although new controls have been implemented during fiscal 2023 and 2024, we will need to enhance and further formalize these controls during fiscal 2025. We expect to conclude our testing of effectiveness in fiscal 2025 but we may find that fiscal 2023 and 2024 remediations were not effective and have to incur additional costs to adopt new controls.
We expect to conclude our testing of effectiveness in fiscal 2026 but we may find that the remediations implemented were not effective and have to incur additional costs to adopt new controls.
Any disruptive national or international events, such as potential future public health crises, ongoing or new conflicts, domestic or foreign terrorist activities, banking crises, the imposition of tariffs, shifts in government alliances, and responses from the U.S.
Government and our customers with respect to privacy, data governance, data protection and cybersecurity is costly and requires a significant amount of attention from management. 13 Any disruptive national or international events, such as potential future public health crises, ongoing or new conflicts, domestic or foreign terrorist activities, banking crises, the imposition of tariffs, shifts in government alliances, and responses from the U.S.
We cannot forecast with any certainty whether such disruptions, restrictions imposed by various governments in response thereto and resulting changes in business practices, may materially impact our ability and the ability of our suppliers to obtain necessary raw material, our business and our consolidated financial position, results of operations, and cash flows.
We cannot forecast with any certainty whether such disruptions, restrictions imposed by various governments in response thereto and resulting changes in business practices, may materially impact our ability and the ability of our suppliers to obtain necessary raw material, our business and our consolidated financial position, results of operations, and cash flows. 14 Risks Related to Our Indebtedness As of December 31, 2025, we have total indebtedness of approximately $30.1million, large portions of which must be paid or refinanced prior to September 30, 2026.
Any failure to fund working capital when required would have a material adverse effect on our business and financial condition and may result in a decline in our stock price.
Any failure to fund working capital when required would have a material adverse effect on our business and financial condition and may result in a decline in our stock price. Additionally, we may need to consider other types of restructuring including seeking protection under U.S. bankruptcy law.
Subsequent to December 31, 2024, we repaid approximately $1,291,000 of this debt. In addition to $1,007,000 of finance lease obligations and a $14,000 vehicle loan, we also had $970,000 of borrowings for the solar energy systems installed at our Barkhamsted facility pursuant to a financing agreement (“Solar Facility”) with CT Green Bank.
In addition to approximately $784,000 of finance lease obligations, at December 31, 2025, we also had $971,000 of borrowings for the solar energy systems installed at our Barkhamsted facility pursuant to a 20-year level payment term loan with CT Green Bank (“Solar Facility”).
The market price of our common stock could fluctuate widely due to factors relating to our operations as well as those beyond our control.
The market price of our common stock could fluctuate widely due to factors relating to our operations, the terms of our Merger Agreement with Tenax, as well as those beyond our control, including public perception of the business prospects of Tenax and the likelihood of consummation of the Merger with Tenax.
We are subject to inspections by the FAA and may be subjected to fines and other penalties (including orders to cease production) for noncompliance with FAA regulations. Our failure to comply with applicable regulations could result in the termination of or our disqualification from some of our contracts, which could have a material adverse effect on our operations.
Our failure to comply with applicable regulations could result in the termination of or our disqualification from some of our contracts, which could have a material adverse effect on our operations. We have never been subject to such fines or disqualification.
Any issuances of our common stock, preferred stock, or securities such as warrants or notes that are convertible into, exercisable or exchangeable for, our capital stock, would have a dilutive effect on the voting and economic interest of our existing stockholders.
Any issuances of our common stock, preferred stock, or securities such as warrants or notes that are convertible into, exercisable or exchangeable for, our capital stock, would have a dilutive effect on the voting and economic interest of our existing stockholders. 8 A reduction in budgeted or actual U.S. government spending for defense or changes in the mix of defense products could materially adversely impact our business strategy, revenues, operating results and financial condition.
If we were required to make immediate repayment, we may not be able to obtain financing to do so and would become insolvent. We currently do not pay dividends and the terms of our Current Credit Facility limit our ability to pay dividends. We currently do not pay dividends and have no foreseeable plans to do so.
If we were required to make immediate repayment or Webster were to refuse to make advances under the revolving portion of the credit facility, we may not be able to obtain financing to repay the amounts due or maintain our operations and would become insolvent. T he terms of our Current Credit Facility limit our ability to pay dividends.
We depend on revenues from components for a few aircraft programs and platforms and the cancellation or reduction of funding of them will harm our business.
The loss of any key customer, a decline or interruption in sales to them, or our inability to establish relationships with new customers, could significantly impact our business. We depend on revenues from components for a few aircraft programs and platforms and the cancellation or reduction of funding of them will harm our business.
On October 1, 2024, the Solar Facility converted to a 20-year level payment term loan. If we are unable to pay or refinance our indebtedness when due, our operations may be materially and adversely affected. We must pay or refinance large portions of this indebtedness prior to December 30, 2025, and July 1, 2026.
If we are unable to pay or refinance our indebtedness when due, our operations may be materially and adversely affected. We must pay or refinance large portions of our indebtedness prior to September 30, 2026.
The trading volume for our common stock has been limited and a more active public market for our common stock may not develop or be sustained over time. The lack of a robust market may impair a stockholder’s ability to sell shares of our common stock.
Further, the proportion of our shares in the float will represent a very minor portion of our outstanding shares immediately following consummation of the Merger. The trading volume for our common stock has been limited and a more active public market for our common stock may not develop or be sustained over time.
Congressional appropriation and presidential approval are required for funding, leaving our platforms and programs vulnerable to potential budget reductions at any point.
Although we expect to generate sales from all of our key aerospace and defense platforms and programs for many years, they are subject to significant risk. Congressional appropriation and presidential approval are required for funding, leaving our platforms and programs vulnerable to potential budget reductions at any point.
Our state-of-the-art manufacturing facilities currently have a large percentage of fixed factory overhead relative to our overall expenses. Consequently, our gross profit as a percentage of sales is highly linked with sales volume. If we do not increase our sales volume, it will be difficult to materially improve our gross profit margin.
Consequently, our gross profit as a percentage of sales is highly linked with sales volume. If we do not increase our sales volume, it will be difficult to materially improve our gross profit margin. Although we have plans to improve operating efficiencies at our current sales levels, we may not be able to do so.
Any failure to refinance our existing debt or obtain additional working capital when required would have a material adverse effect on our business and financial condition. We may not be able to comply with the covenants of the Current Credit Facility and our debt could be called.
Any failure to refinance our existing debt or obtain additional working capital when required would have a material adverse effect on our business and financial condition. We may need additional financing to fund operations and to invest in new or upgraded property or equipment .
In the absence of a more active trading market, any attempt to sell our shares could result in a decrease in the price of our stock. Specifically, our shareholders may not be able to resell their shares of common stock at or above the price paid for such shares or at all.
The lack of a robust market may impair a stockholder’s ability to sell shares of our common stock. In the absence of a more active trading market, any attempt to sell our shares could result in a decrease in the price of our stock.
As a result, our shareholders may not be able to sell your shares of our common stock in short time periods, or possibly at all, and the price per share of our common stock may fluctuate significantly. The ownership of our common stock is highly concentrated amongst related parties, and their interests may conflict with the interests of other stockholders.
Specifically, our shareholders may not be able to resell their shares of common stock at or above the price paid for such shares or at all. The ownership of our common stock is highly concentrated amongst related parties, and their interests may conflict with the interests of other stockholders. Two of our directors, Michael N. Taglich and Robert F.
Consequently, we may be susceptible to future increased rates if the Federal Reserve chooses to increase its target rate of interest. 13 We have a history of net losses, need to refinance our bank debt and the opinion of our auditor contains an explanatory paragraph as to our ability to continue as a going concern.
Risks Related to Our Business We have a history of net losses, have recently increased our debt to support ongoing business operations, need to refinance our debt and the opinion of our auditor contains an explanatory paragraph as to our ability to continue as a going concern.
The weighted average interest rate paid during the year-ended December 31, 2024 on borrowings outstanding on the Current Credit Facility was 7.66% as compared to 7.55% for the year-ended December 31, 2023, the increase reflects the increase in the target rates set by the Federal Reserve.
The weighted average interest rate paid during the year-ended December 31, 2025 and 2024, on borrowings outstanding on the Current Credit Facility was 6.72% and 7.66%, respectively.
Risks Related to Our Business We may need additional financing to fund investments in new or upgraded property or equipment . We may require additional financing to fund investments in new or upgraded property or equipment, in order to remain competitive.
We will require additional financing to fund operations and investments in new or upgraded property or equipment in order to remain competitive and will need to obtain the agreement of holders of portions of our debt to incur new debt or otherwise refinance our existing debt.
If we fail to do so and/or are unable to obtain future waivers, we may have to pay increased interest rates or may be required to immediately pay any outstanding debt. An increase in the interest rate would likely have a material adverse impact on our consolidated financial position and results of operations.
An increase in the interest rate would likely have a material adverse impact on our consolidated financial position and results of operations.
The interests of these related parties may be different from the interests of other stockholders on these and other matters.
These related parties have significant influence over the outcome of corporate actions, including those actions requiring stockholder approval to permit the Merger to be consummated. The interests of these related parties may be different from the interests of other stockholders on these and other matters.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWe are not aware of any vulnerability inherent in our systems or malware embedded in our systems that are likely to would materially affect, or are reasonably likely to materially affect, our operations. The Company is in the process of implementing additional training and is in the process of engaging third parties to perform various testing as indicated above.
Biggest changeWe are not aware of any vulnerability inherent in our systems or malware embedded in our systems that are likely to materially affect, or are reasonably likely to materially affect, our operations. We are in the process of implementing additional training and are in the process of engaging third parties to perform various testing as indicated above.
Board Oversight The Audit Committee of our Board of Directors, which is composed of all non-employee directors, is responsible for oversight of our efforts to eliminate cybersecurity risks. The Audit Committee meets regularly with our Chief Executive Officer and Chief Financial Officer and, in turn, reports its finding to the Board of Directors.
Board Oversight The Audit Committee of our Board of Directors, which is composed of all non-employee directors, is responsible for oversight of our efforts to eliminate cybersecurity risks. The Audit Committee meets regularly with our Chief Executive Officer and Chief Financial Officer and, in turn, reports its findings to the Board of Directors. 24

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeITEM 2. PROPERTIES We have strategically located our properties in the U.S. We lease and maintain an approximately 81,000 square foot state-of-the-art manufacturing facility located in Bay Shore, New York. We maintain our corporate headquarter at this facility whose lease expires in September 2026. We also lease a small warehouse nearby in Bohemia, New York.
Biggest changeITEM 2. PROPERTIES We have strategically located our properties in the U.S. We lease and maintain an approximately 81,000 square foot state-of-the-art manufacturing facility located in Bay Shore, New York. We maintain our corporate headquarters at this facility whose lease expires in September 2026. We own a second 74,923 square foot state-of the-art manufacturing facility located in Barkhamsted, Connecticut.
Removed
That lease term expires in May 2025 and the property will be vacated at such time. We own a second 74,923 square foot state-of the-art manufacturing facility located in Barkhamsted, Connecticut. 18

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeIn the Order, the court granted Contract Pharmacal’s Motions to drop its claim for specific performance and to amend its Complaint to reduce its claim for damages to $700,000. Subsequently, Contract Pharmacal moved to amend its Complaint. We opposed and the Court denied the request to amend the Complaint.
Biggest changeOn July 8, 2021, the Court denied Contract Pharmacal’s motion for summary judgement and to add an additional cause of action. In the Order, the Court granted Contract Pharmacal’s Motions to drop its claim for specific performance and to amend its Complaint to reduce its claim for damages to $700,000 both of which benefit the Company.
There are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial stockholder of our common stock, is an adverse party or has a material interest adverse to our interest. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 19 PART II
There are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial stockholder of our common stock, is an adverse party or has a material interest adverse to our interest. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 25 PART II
ITEM 3. LEGAL PROCEEDINGS On October 2, 2018, Contract Pharmacal Corp. (“Contract Pharmacal”) commenced an action, relating to a Sublease entered into between us and Contract Pharmacal in May 2018 with respect to the property formerly occupied by our subsidiary Welding Metallurgy, Inc. (“WMI”), at 110 Plant Avenue, Hauppauge, New York.
ITEM 3. LEGAL PROCEEDINGS On October 2, 2018, Contract Pharmacal Corp. (“Contract Pharmacal”) commenced an action, relating to a Sublease entered into between the Company and Contract Pharmacal in May 2018 with respect to the property that was formerly occupied by the Company’s former subsidiary WMI, at 110 Plant Avenue, Hauppauge, New York.
Contract Pharmacal filed a Motion to reargue which the Court denied on November 30, 2021. On March 10, 2022, Contract Pharmacal filed an appeal to the Court’s decision with the Appellate Division. The Appellate Division upheld the denial of Contract Pharmacal’s motion for summary judgement and upheld the denial of its motion to amend its Complaint.
Following the Court’s decision, Contract Pharmacal filed a Motion to reargue its original motion which the Company opposed. The Court denied that motion on November 30, 2021 and then on March 10, 2022, Contract Pharmacal filed an appeal of the Court’s decision with the Appellate Division of the State of New York. The Company opposed that action.
Contract Pharmacal sought damages for an amount in excess of $1,000,000 for our failure to make the entire premises available by what it claims was the Sublease commencement date. On July 8, 2021, the Court denied Contract Pharmacal’s motion for summary judgement.
In the action, Contract Pharmacal sought damages for an amount in excess of $1,000,000 for the Company’s alleged violation of the terms of the subject sublease, specifically the failure to make the entire premises available by what it claims was the Sublease commencement date.
Removed
On March 28, 2024, Contract Pharmacal filed a motion to reargue the appeal previously denied by the Appellate Division. Pending a decision by the Appellate Division the Trial Court has adjourned the case. Regardless of the decision by the Appellate Division, Contract Pharmacal will be required to file an amended complaint.
Added
The validity of the action is extremely suspect in that the subject sublease had no specific commencement date and Contract Pharmacal ultimately received all the space. Discovery was conducted and the Plaintiff moved for summary judgement and to amend its complaint to add a new cause of action all of which the company opposed.
Removed
We have consistently disputed the validity of the claims asserted by Contract Pharmacal and continue to believe we have a meritorious defense to those claims based on, among other items, language in the Sublease. We intend to continue to dispute the validity of the claim asserted by Contract Pharmacal.
Added
The Company was again successful as the Appellate Division upheld the lower court’s denial of Contract Pharmacal’s motion for summary judgement and its motion to amend its Complaint. Contract Pharmacal has now submitted a motion to the Appellate Division requesting leave to reargue the court’s denial of its original appeal. The Company will oppose that motion.
Added
The Appellate Division has yet to act in respect to Contract Pharmacal’s most recent motion to reargue the Court’s denial of the original appeal. The Company continues to dispute the validity of the claims asserted by Contract Pharmacal and intends to contest them vigorously.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeItem 4. Mine Safety Disclosures 19 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 20 Item 6. [Reserved] 20 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operation 21 Item 7A. Quantitative and Qualitative Disclosure About Market Risk 27 Item 8.
Biggest changeItem 4. Mine Safety Disclosures 25 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 26 Item 6. [Reserved] 26 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operation 27 Item 7A. Quantitative and Qualitative Disclosure About Market Risk 33 Item 8.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeSecurities Authorized for Issuance Under Equity Compensation Plans The following table summarizes shares of our Common Stock to be issued upon exercise of options and warrants, the weighted-average exercise price of outstanding options and warrants and options available for future issuance pursuant to our equity compensation plans as of December 31, 2024: Plan Category Number of Securities to Be Issued Upon Exercise of Outstanding Options, Warrants and Rights Weighted Average Exercise Price of Outstanding Options, Warrants and Rights Number of Remaining Shares Available for Future Securities Issuance Under Equity Compensation Plans Equity compensation plans approved by security holders 541,870 $ 7.41 150,425 Equity compensation plans not approved by security holders None 0.00 None Total 541,870 150,425 The provisions of each of our equity compensation plans provide that shares covered by an award that is forfeited, expires or is settled in cash, and shares that are retained by us upon exercise of an award to satisfy the exercise price of such award or withholding taxes due in respect of such award, are available for future issuance under such plan, provided the plan has not been terminated or expired.
Biggest changeSecurities Authorized for Issuance Under Equity Compensation Plans The following table summarizes shares of our Common Stock to be issued upon exercise of options and warrants, the weighted-average exercise price of outstanding options and warrants and options available for future issuance pursuant to our equity compensation plans as of December 31, 2025: Plan Category Number of Securities to Be Issued Upon Exercise of Outstanding Options, Warrants and Rights Weighted Average Exercise Price of Outstanding Options, Warrants and Rights Number of Remaining Shares Available for Future Securities Issuance Under Equity Compensation Plans Equity compensation plans approved by security holders 455,360 $ 6.01 364,044 Equity compensation plans not approved by security holders None 0.00 None Total 455,360 364,044 The provisions of each of our equity compensation plans provide that shares covered by an award that is forfeited, expires or is settled in cash, and shares that are retained by us upon exercise of an award to satisfy the exercise price of such award or withholding taxes due in respect of such award, are available for future issuance under such plan, provided the plan has not been terminated or expired.
Recent Sales of Unregistered Equity Securities Except as previously reported in our periodic reports filed under the Exchange Act, we did not issue any unregistered equity securities during the fiscal year ended December 31, 2024. Purchases of Our Equity Securities No repurchases of our common stock were made during the fiscal year ended December 31, 2024.
Recent Sales of Unregistered Equity Securities Except as previously reported in our periodic reports filed under the Exchange Act, we did not issue any unregistered equity securities during the fiscal year ended December 31, 2025. Purchases of Our Equity Securities No repurchases of our common stock were made during the fiscal year ended December 31, 2025.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market for Our Common Stock Our common stock is listed on the NYSE American under the symbol “AIRI.” Holders On April 11, 2025, there were 78 stockholders of record of our common stock.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market for Our Common Stock Our common stock is listed on the NYSE American under the symbol “AIRI.” Holders On March 16, 2026, there were 91 stockholders of record of our common stock.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeWith total unfilled contract values amounting to $271.3 million (including our $117.9 million in backlog and all potential orders against LTA agreements previously awarded to us), as of December 31, 2024, we are confident in our ability to boost sales in 2025, attain profitability and improve our financial position. 21 RESULTS OF OPERATIONS Years ended December 31, 2024 and 2023: Selected Financial Information: 2024 2024 Percentage of Net Sales 2023 2023 Percentage of Net Sales Change 2024 vs 2023 Percent Change 2024 vs 2023 Net sales $ 55,108,000 100.0 % $ 51,516,000 100.0 % $ 3,592,000 6.97 % Cost of sales 46,176,000 83.8 % 44,088,000 85.6 % 2,088,000 4.74 % Gross profit 8,932,000 16.2 % 7,428,000 14.4 % 1,504,000 20.25 % Operating expenses 8,473,000 15.4 % 7,723,000 15.0 % 750,000 9.71 % Interest expense 1,893,000 3.4 % 1,920,000 3.7 % (27,000 ) -1.41 % Other income, net 68,000 0.1 % 84,000 0.2 % (16,000 ) -19.05 % Provision for income taxes - 0.0 % - 0.0 % - Net loss $ (1,366,000 ) -2.5 % $ (2,131,000 ) -4.1 % $ 765,000 -35.90 % Balance Sheet Data: December 31, 2024 December 31, 2023 Change Percent Change Cash $ 753,000 $ 346,000 407,000 117.63 % Working capital $ 11,776,000 $ 12,117,000 (341,000 ) -2.81 % Total assets $ 51,011,000 $ 50,715,000 296,000 0.58 % Total stockholders’ equity $ 14,948,000 $ 15,190,000 (242,000 ) -1.59 % Comparison of Fiscal 2024 to 2023 Net Sales: Net sales in 2024 were $55,108,000, an increase of $3,592,000 or 7.0%, compared with $51,516,000 that we achieved in 2023.
Biggest changeAs of December 31, 2025, we have total unfilled contract values amounting to $270.1 million (including our $136.8 million in backlog and all potential orders against LTA agreements previously awarded to us). 27 RESULTS OF OPERATIONS Years ended December 31, 2025 and 2024: Selected Financial Information: 2025 2025 Percentage of Net Sales 2024 2024 Percentage of Net Sales Change 2025 vs 2024 Percent Change 2025 vs 2024 Net sales $ 47,921,000 100.0 % $ 55,108,000 100.0 % $ (7,187,000 ) -13.04 % Cost of sales 39,734,000 82.9 % 46,176,000 83.8 % (6,442,000 ) -13.95 % Gross profit 8,187,000 17.1 % 8,932,000 16.2 % (745,000 ) -8.34 % Operating expenses 8,525,000 17.8 % 8,473,000 15.4 % 52,000 0.61 % Interest expense 1,841,000 3.8 % 1,893,000 3.4 % (52,000 ) -2.75 % Other income, net 743,000 1.6 % 68,000 0.1 % 675,000 992.65 % Benefit from income taxes (131,000 ) -0.3 % - 0.0 % (131,000 ) Net loss $ (1,305,000 ) -2.7 % $ (1,366,000 ) -2.5 % $ 61,000 -4.47 % Balance Sheet Data: December 31, December 31, Percent 2025 2024 Change Change Cash $ 680,000 $ 753,000 $ (73,000 ) -9.69 % Working capital $ 5,238,000 $ 11,776,000 $ (6,532,000 ) -55.47 % Total assets $ 58,329,000 $ 51,011,000 $ 7,318,000 14.35 % Total stockholders’ equity $ 19,201,000 $ 14,948,000 $ 4,253,000 28.45 % Comparison of Fiscal 2025 to 2024 Net Sales: Net sales in 2025 were $47,921,000, a decrease of $7,187,000 or 13.0%, compared with $55,108,000 that we achieved in 2024.
The Current Credit Facility expiration date and the rights granted to the lender, combined with the reasonable possibility that the we might fail to meet covenants in the future, raise substantial doubt about our ability to continue as a going concern for the one year commencing as of the date of filing this report.
The Current Credit Facility expiration date and the rights granted to the lender, combined with the reasonable possibility that we might fail to meet covenants in the future, raise substantial doubt about our ability to continue as a going concern for the one year commencing as of the date of filing this report.
Use of Estimates. The preparation of financial statements in accordance with generally accepted accounting principles in the U.S. requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.
The preparation of financial statements in accordance with generally accepted accounting principles in the U.S. requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.
This allows for rigorous oversight of production and the adherence to stringent quality standards. Although there is currently a shortage of skilled workers, we maintain a highly trained and close- knit team of over 184 professionals committed to driving excellence and precision in every aspect of our operations. Our period-to-period net sales and operating results are significantly impacted by timing.
This allows for rigorous oversight of production and the adherence to stringent quality standards. Although there is currently a shortage of skilled workers, we maintain a highly trained and close- knit team of over 160 professionals committed to driving excellence and precision in every aspect of our operations. Our period-to-period net sales and operating results are significantly impacted by timing.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION The following discussion of our financial condition and results of operations should be read in conjunction with our audited consolidated financial statements for the years ended December 31, 2024 and 2023 and the notes to those statements included elsewhere in this report.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION The following discussion of our financial condition and results of operations should be read in conjunction with our audited consolidated financial statements for the years ended December 31, 2025 and 2024 and the notes to those statements included elsewhere in this report.
The financial statements include estimates based on currently available information and our judgment as to the outcome of future conditions and circumstances. Significant estimates in these financial statements include, inventory valuation and income tax provision.
The financial statements in this Report include estimates based on currently available information and our judgment as to the outcome of future conditions and circumstances. Significant estimates in these financial statements include, inventory valuation and income tax provision.
The decrease in cash flows was primarily due to the use of a portion, $2,442,000, of customer deposits which had been advanced prior to 2024 for the procurement of long lead time raw materials expected to be utilized in 2024. Cash Used In Investing Activities We continue to make significant investments to enhance our competitiveness and market position.
The decrease in cash flows was primarily due to the use of a portion, $2,442,000, of customer deposits which had been advanced prior to 2024 for the procurement of long lead time raw materials expected to be utilized in 2024. Cash Used In Investing Activities During 2025 we continued to make significant investments to enhance our competitiveness and market position.
The composition of customers that exceeded 10% of our net sales in either 2024 or 2023 are shown below: Percentage of Net Sales Customer 2024 2023 RTX (A) 29.3 % 29.3 % Lockheed Martin 25.1 % 24.7 % Northrop 18.3 % 3.6 % Boeing 0.7 % 12.2 % (A) RTX includes Collins Landing Systems and Collins Aerostructures 22 The composition of our net sales by platform or program profiles for the years ended December 31, 2024 and 2023 are shown below: Percentage of Net Sales Platform or Program 2024 2023 E2-D Hawkeye 24.0 % 18.9 % UH-60 Black Hawk Helicopter 23.1 % 18.1 % GTF 22.0 % 10.5 % F-35 Lightning II 3.7 % 4.0 % CH-53 Helicopter 3.4 % 7.4 % F-18 Hornet 2.9 % 24.3 % All other platforms 20.9 % 16.8 % Total 100.0 % 100.0 % Period-to-period changes in customer mix and related platforms and programs are largely attributable to customer requirements, availability of parts, production capacity and timing.
The composition of customers that exceeded 10% of our net sales in either 2025 or 2024 are shown below: Percentage of Net Sales Customer 2025 2024 RTX (A) 36.2 % 29.3 % Lockheed Martin 32.3 % 25.1 % Northrop 6.7 % 18.3 % (A) RTX includes Collins Landing Systems and Collins Aerostructures 28 The composition of our net sales by platform or program profiles for the years ended December 31, 2025 and 2024 are shown below: Percentage of Net Sales Platform or Program 2025 2024 GTF 31.4 % 22.0 % UH-60 Black Hawk Helicopter 21.0 % 23.1 % CH-53 Helicopter 12.0 % 3.4 % E2-D Hawkeye 9.1 % 24.0 % F-35 Lightning II 4.6 % 3.7 % F-18 Hornet 1.5 % 2.9 % All other platforms 20.4 % 20.9 % Total 100.0 % 100.0 % Period-to-period changes in customer mix and related platforms and programs are largely attributable to customer requirements, availability of parts, production capacity and timing.
The Company periodically evaluates inventory items not secured by backlog and establishes write-downs to estimated net realizable value for excess quantities, slow-moving goods (defined as goods which do not have an open order and have not had movement for two years), obsolescence and for other impairments of value. ● Income Taxes.
We periodically evaluate inventory items not secured by backlog and establishes write-downs to estimated net realizable value for excess quantities, slow-moving goods (defined as goods which do not have an open order and have not had movement for two years), obsolescence and for other impairments of value. ● Income Taxes.
We have historically met these requirements with funds provided by a combination of cash generated from operating activities and cash generated from equity and debt financing transactions. Based on our current revenue visibility and strength of our backlog, we believe that we have sufficient liquidity to meet our cash requirements for our operations.
We have historically met these requirements with funds provided by a combination of cash generated from operating activities and cash generated from equity and debt financing transactions. Based on our current revenue visibility, strength of our backlog, and availability under our Current Credit Facility, we believe that we have sufficient liquidity to meet our day-to-day cash requirements for our operations.
This ratio is a financial metric that we use to measure our ability to cover fixed charges such as interest and lease expenses as divided by EBITDA (as defined in the Current Credit Facility) which represents net income (loss) before interest, taxes, depreciation and amortization.
This ratio is a financial metric that we use to measure our ability to cover fixed charges such as interest and lease expenses as divided by EBITDA (as defined in the Current Credit Facility) which represents net income (loss) before interest, taxes, depreciation and amortization. We are also required to meet other business and financial covenants.
Such payment shall be applied to the outstanding principal balance of the Term loan, on or prior to the April 15 immediately following such fiscal year. For the fiscal year ended December 31, 2024, based on the calculation there is a $43,500 Excess Cash Flow payment required.
Such payment shall be applied to the outstanding principal balance of the Term loan, on or prior to the April 15 immediately following such fiscal year. For the fiscal year ended December 31, 2025, based on the calculation there is no Excess Cash Flow payment required.
Further, as a condition to refinancing our Current Credit Facility prior to December 31, 2025, our lender may require that the holders of our Related Party Notes extend or otherwise modify the subordination agreements they have given in favor of the lender.
Further, as a condition to refinancing our Current Credit Facility prior to September 30, 2026, our lender or a new lender may require that the holders of our Related Party Notes extend or otherwise modify the subordination agreements they have given in favor of the lender.
Net Loss: Net loss for the year ended December 31, 2024 was $1,366,000, compared to a net loss of $2,131,000 for the year ended December 31, 2023, for the reasons discussed above.
Net Loss: Net loss for the year ended December 31, 2025 was $1,305,000, compared to a net loss of $1,366,000 for the year ended December 31, 2024, for the reasons discussed above.
However, we must pay or refinance large portions of our indebtedness prior to December 30, 2025, and July 1, 2026.
However, we must pay or refinance large portions of our indebtedness prior to September 30, 2026, and October 1, 2026.
For the six months ending June 30, 2024 our EBITDA shall not be less than $740,000; for the nine months ending September 30, 2024 our EBITDA shall not be less than $1,500,000; for the twelve months ending December 31, 2024 our EBITDA shall not be less than $2,800,000.
This amendment further revised our Financial Covenants. For the six months ending June 30, 2025 our EBITDA shall not be less than $740,000; for the nine months ending September 30, 2025 our EBITDA shall not be less than $1,500,000; for the twelve months ending December 31, 2025 our EBITDA shall not be less than $2,800,000.
Any failure to refinance our existing debt or obtain additional working capital when required would have a material adverse effect on our business and financial condition. 25 Cash Flow The following table summarizes our net cash flow from operating, investing and financing activities for the periods indicated (in thousands): Year Ended December 31, 2024 2023 Cash provided by (used in) Operating activities $ 324 $ 4,862 Investing activities (2,285 ) (2,112 ) Financing activities 2,368 (2,685 ) Net increase (decrease) in cash $ 407 $ 65 Cash Provided By Operating Activities For the year ended December 31, 2024, we generated cash flows from operations of $324,000 as compared to $4,862,000 for fiscal 2023.
Any failure to refinance our existing debt or obtain additional working capital when required would have a material adverse effect on our business and financial condition. 31 Cash Flow The following table summarizes our net cash flow from operating, investing and financing activities for the periods indicated (in thousands): Year Ended December 31, 2025 2024 Cash provided by (used in) Operating activities $ (1,352 ) $ 324 Investing activities (3,122 ) (2,285 ) Financing activities 8,331 2,368 Net increase in cash $ 3,857 $ 407 Cash (Used in) Provided By Operating Activities For the year ended December 31, 2025, our operations absorbed $1,352,000 of cash as compared to generating $324,000 of cash in fiscal 2024.
LIQUIDITY AND CAPITAL RESOURCES As of December 31, 2024, we have debt service requirements related to: 1) Outstanding indebtedness under our Current Credit Facility of $18,130,000 (consisting of a Revolving Loan of $12,905,000 and a Term Loan in the amount of $5,225,000).
LIQUIDITY AND CAPITAL RESOURCES As of December 31, 2025, we have debt service requirements related to: 1) Outstanding indebtedness under our Current Credit Facility of $23,473,000 (consisting of a Revolving Loan of $17,618,000 and a Term Loan in the amount of $5,855,000).
The following is a brief discussion of recent amendments to the Current Credit Facility (all of which have been filed with the SEC): ● On August 4, 2023, we entered into a Fifth Amendment that waived a default caused by our failure to meet the required Fixed Coverage Charge Ratio for the fiscal quarter ended March 31, 2023.
The following is a brief discussion of recent amendments to the Current Credit Facility (all of which have been filed with the SEC): ● On May 31, 2024, we entered into a Seventh Amendment that waived the default caused by our failure to achieve the required Fixed Charge Coverage Ratio of the Sixth Amendment.
Refinancing our indebtedness may require us to pay higher interest rates than we currently pay, agree to more restrictive business or financial covenants or involve the issuance of debt, equity and/or new securities convertible into or exercisable or exchangeable for our common stock.
Webster Bank has advised us that it will not extend our Current Credit Facility. Refinancing our indebtedness with other parties may require us to pay higher interest rates than we currently pay, agree to more restrictive business or financial covenants or involve the issuance of debt, equity and/or new securities convertible into or exercisable or exchangeable for our common stock.
The Current Credit Facility expires on December 30, 2025. In addition, we are required to maintain a collection account with our lender into which substantially all cash receipts are remitted.
As of December 31, 2025, we were in compliance with all financial and business covenants contained in the Current Credit Facility. The Current Credit Facility expires on September 30, 2026. In addition, we are required to maintain a collection account with our lender into which substantially all cash receipts are remitted.
During fiscal 2023, we also took advances of $393,000 against the Solar Facility including origination fees of $25,000. 26 Critical Accounting Estimates A critical accounting estimate is one that is both important to the portrayal of a company’s financial condition and results of operations and requires management’s most difficult, subjective or complex judgements, often as a result of the need to make estimates about the effect of matters that are inherently uncertain.
Critical Accounting Estimates A critical accounting estimate is one that is both important to the portrayal of a company’s financial condition and results of operations and requires management’s most difficult, subjective or complex judgements, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. Use of Estimates.
Beginning with the Fiscal Quarter ending March 31, 2025 we are required to meet a prescribed Fixed Charge Coverage Ratio (as defined) that is determined at the end of each fiscal quarter.
Under the terms of the Current Credit Facility, as amended, we are required to meet a prescribed Fixed Charge Coverage Ratio (as defined) that is determined at the end of each fiscal quarter.
This debt matures on December 30, 2025, and requires us to make monthly payments of approximately $68,000 in 2025. 2) Related Party Notes of approximately $6,162,000. This debt matures on July 1, 2026.
This debt matures on September 30, 2026, and requires us to make monthly payments of approximately $87,000 in 2026. 2) Related Party Notes of approximately $4,871,000.
Gross Profit: Gross profit for the year ended December 31, 2024, amounted to $8,932,000, an increase from the $7,428,000 achieved in 2023. Our gross profit percentage in fiscal 2024 increased to 16.2% from the 14.4% we achieved in 2023.
Gross Profit: Gross profit for the year ended December 31, 2025, amounted to $8,187,000, a decrease from the $8,932,000 achieved in 2024. Our gross profit percentage in fiscal 2025 increased to 17.1% from the 16.2% we achieved in 2024.
This improvement can be attributed to our increase in sales, changes in sales across our major platforms, shifts in product mix, and overall operating efficiencies. Operating Expenses : In fiscal 2024, operating expenses totaled $8,473,000, higher than the $7,723,000 recorded in 2023.
This improvement can be attributed to changes in sales across our major platforms, shifts in product mix, and cost reductions implemented during the period. Operating Expenses : In fiscal 2025, operating expenses totaled $8,525,000, an increase of $52,000, from $8,473,000 recorded in 2024.
For the year ended December 31, 2023, cash used in financing activities was $2,685,000. During fiscal 2023, we reduced borrowings under our Current Credit Facility by $2,921,000 (consisting of net reduction in Revolving Loan borrowings of $2,548,000 and a net decrease of $373,000 against the Term Loan).
For the year ended December 31, 2024, cash provided by financing activities was $2,368,000. During fiscal 2024, we increased borrowings under our Current Credit Facility by $2,238,000 (consisting of a net increase in Revolving Loan borrowings of $2,101,000 and a net increase of $137,000 against the Term Loan) and received advances of $8,000 against the Solar Facility.
Cash used in investing activities of $2,285,000 and $2,112,000, in 2024 and 2023, respectively, was for new property and equipment. We continue to make strategic investments in capital equipment to enhance our competitiveness. The investments in 2024 and 2023 increased production efficiency and speed, while maintaining closer tolerances. They also expanded the size of products we can manufacture.
Cash used in investing activities of $3,122,000 and $2,285,000, in 2025 and 2024, respectively, was for new property and equipment. The investments in 2025 and 2024 increased production efficiency and speed, while maintaining closer tolerances. They also expanded the size of products we can manufacture. Any investment in 2026 will be at a much lower level.
The decrease is primarily attributable to a decrease in the average amount outstanding under our Current Credit Facility. The average interest rate on our Current Credit Facility increased to 7.66% in 2024 as compared to 7.55% in 2023.
The decrease is primarily attributable to lower levels of subordinated debt during a portion of the year and a decrease in the average interest rate on debt outstanding pursuant to our Current Credit Facility which decreased to 6.72% in 2025 as compared to 7.66% in 2024.
In addition to required Term Loan payments of approximately $1,011,000 in fiscal 2025, we may have to make additional payments.
As of December 31, 2025, we have borrowing capacity of approximately $2,382,000 under the Revolving Loan. In addition to required Term Loan payments we may have to make additional payments under the Current Credit Facility.
We continue to look for ways to reduce our costs and improve our operating performance and financial results. Interest Expense: Interest expense (which includes amortization of deferred financing costs) was $1,893,000 in fiscal 2024, a decrease of $27,000 or 1.4% from $1,920,000 in 2023.
Interest Expense: Interest expense (which includes amortization of deferred financing costs) was $1,841,000 in fiscal 2025, a decrease of $52,000 or 2.8% from $1,893,000 in 2024.
As a percentage of consolidated net sales, operating expenses rose to 15.4%, compared to the 15.0% achieved in fiscal 2023. The increase in both dollars and percentage was primarily driven by higher professional fees and costs associated with the improvement of our information technology system and hardening our cyber-security protection.
As a percentage of consolidated net sales, operating expenses rose to 17.8%, compared to 15.4% in fiscal 2024. The dollar increase was due primarily to stock compensation expense and information technology expenses offset by lower personnel costs. We continue to look for ways to reduce our operating expenses.
Subsequent to December 31, 2024 we repaid approximately $1,291,000 of this debt out of proceeds of such sales. 3) Various equipment leases and contractual obligations related to our normal business, including advances under our Solar Facility for the installation of solar energy systems including the replacement of the existing roof at our Sterling Facility. 23 Under the terms of the Current Credit Facility, as amended, we are required to achieve prescribed levels of EBITDA (as defined in the Current Credit Facility) at the end of each Fiscal Quarter on a rolling basis, for the Fiscal Quarters ending September 30, 2024 and December 31, 2024.
This debt matures on October 1, 2026. 3) Various equipment leases and contractual obligations related to our business, including advances under our Solar Facility for the installation of solar energy systems including the replacement of the existing roof at our Sterling Facility.
Additionally, we expanded our sales and marketing efforts, with a sharp focus on expanding relationships with existing customers and cultivating new ones. Fiscal 2024 marked a year of overall progress and positioning for growth. Looking forward to fiscal 2025, our business strategy is geared towards achieving sustainable and profitable business growth.
Additionally, we expanded our sales and marketing efforts, with a sharp focus on expanding relationships with existing customers and cultivating new ones. Looking forward to fiscal 2026, we are focused on securing new contract awards, improving operations and successful completion of the Merger Agreement (as discussed elsewhere in this filing).
During fiscal 2024, we increased borrowings under our Current Credit Facility by $2,238,000 (consisting of a net increase in Revolving Loan borrowings of $2,101,000 and a net increase of $137,000 against the Term Loan) and received advances of $533,000 against the Solar Facility. We also made payments of $196,000 pursuant to financing lease obligations and $9,000 on a loan payable.
Cash Provided by Financing Activities For the year ended December 31, 2025, cash provided by financing activities was $8,331,000. During fiscal 2025, we increased borrowings under our Current Credit Facility by $5,343,000 (consisting of a net increase in Revolving Loan borrowings of $4,713,000 and a net increase of $630,000 against the Term Loan).
We expect to engage in discussions during 2025 with our lender under the Current Credit Facility and related party note holders to explore potential extensions or refinancing of our obligations.
If we do not close the contemplated Merger, it is unlikely we will be able to pay existing debt and will need to refinance our Current Credit Facility and Related Party Notes. We have engaged in discussions with Webster Bank and the holders of our Related Party Notes to explore potential extensions or refinancings of our obligations.
We also made payments of $123,000 pursuant to financing lease obligations and $9,000 on a loan payable.
We also sold an aggregate of 1,213,593 shares of common stock to the public for net proceeds of $4,638,000. We used cash by paying $1,291,000 of the Related Party Notes. We also made payments of $223,000 pursuant to financing lease obligations and $8,000 on a loan payable.
In connection with this amendment, we paid a fee of $10,000. ● On November 20, 2023, we entered into a Sixth Amendment that waived defaults caused by the failure by us to achieve the Fixed Charge Coverage Ratio of the Fifth Amendment and because we purchased capital expenditures (as defined) in excess of permitted amounts.
The funds in this account serve as additional security for its obligations under the Current Credit Facility. ● On December 15, 2025, we entered into a Tenth Amendment which waived the defaults caused by the failure to achieve the required fixed charge coverage ratio for the fiscal quarter ended June 30, 2025, and for exceeding the permitted amount of capital expenditures for the fiscal year ending December 31, 2025.
Removed
We are firmly focused on securing new contract awards, improving operations and successful execution.
Added
The year-over-year decrease in net sales was primarily due to timing and overall changes in the mix of products requested and delivered in response to customer orders.
Removed
The year-over-year increase in net sales was primarily driven by the impact of the Company’s enhanced sales and marketing initiatives which contributed to higher shipment volumes against our expanding backlog. Additionally, there have been changes in customer mix and production requirements for other key platforms and programs.
Added
The Current Credit Facility and Related Party Subordinated are classified as current liabilities on the consolidated balance sheet as of December 31, 2025. As a result of the due dates of this debt, there is substantial doubt about our ability to continue as a going concern for the twelve months following the date of filing of these consolidated financial statements.
Removed
Pursuant to the Current Credit Facility we are permitted to make principal payments against this debt with money raised pursuant to the sale of our securities under our Registration Statement on Form S-3 declared effective December 19, 2024.
Added
Webster Bank has advised us that it will not renew our Current Credit Facility.
Removed
For the twelve months cumulative period ending December 31, 2024, we achieved an EBITDA of $3,640,000 as compared to the required $2,800,000. As of December 31, 2024, we met all the financial and business covenants required under the terms of the Current Credit Facility which included a minimum EBITDA on a twelve-month basis of $2.8 million.
Added
In addition to discussions with our lenders, as discussed in our Current Report on Form 8-K filed February 17, 2026, we entered into a Merger Agreement with Tenax. 29 To support current operations and strategic initiatives, beginning in December 2024 we raised capital through public market sales of our common stock and believe we can continue to access equity markets in future periods, though there is no assurance as to our ability to do so or as to the price and terms under which we could issue equity securities.
Removed
In the past, we have not met our financial and business covenants, most recently as of March 31, 2024, and therefore historically classified the term loan at December 31, 2023 in accordance with the guidance in Accounting Standards Codification (“ASC”) 470-10-45. “Debt – Other Presentation Matters”, related to the classification of callable debt.
Added
During the year ended December 31, 2025, the Company sold 1,213,593 shares of common stock in the public market and generated gross proceeds of $4,869,000, of which approximately $3,930,000 is restricted for the benefit of the Current Credit Facility lender. Since initiating the sales in December 2024, we have sold a total of 1,330,444 shares for gross proceeds of $5,375,000.
Removed
Additionally, the amendment provided for a revised Fixed Coverage Charge Ratio for the fiscal quarters ending June 30, 2023 and September 30, 2023 and increased the amount of purchase money secured debt (or finance leases) we are allowed to have outstanding at any time to $2,000,000.
Added
In light of ongoing negotiations with our lenders and in accordance with the Merger Agreement with Tenax, we have temporarily paused all equity raising activity while evaluating the most effective capital structure going forward.
Removed
This amendment further revised the Fixed Charge Coverage Ratio by requiring it to be calculated on a rolling period basis and not be less than, (a) 1.10x (as calculated on a six-months basis) for the fiscal quarter ending March 31, 2024, (b) 1.20x (as calculated on a nine-months basis) for the fiscal quarter ending June 30, 2024, and (c) 1.25 (as calculated on a twelve-months basis) for all fiscal quarters beginning with September 30, 2024, until the Current Credit Facility expires.
Added
In connection with these changes, the Company paid an amendment fee of $20,000. 30 ● On September 10, 2025, we entered into a Ninth Amendment where it agreed that the $3,930,000 of the proceeds from its ATM Offering would be maintained in an interest bearing account.
Removed
This amendment also increased our ability to make additional capital expenditures up to a limit of $2,500,000 in any fiscal year.
Added
Additionally, the maturity date of the revolving credit and term loans were extended to March 31, 2026, and amended the capital expenditure covenant. We paid an amendment fee of $40,000. ● On February 26, 2026, we entered into an Eleventh Amendment which extended the maturity date of the revolving credit and term loans to September 30, 2026.
Removed
In connection with this amendment, we paid a fee of $20,000. ● On May 31, 2024, we entered into a Seventh Amendment that waived the default caused by our failure to achieve the required Fixed Charge Coverage Ratio of the Sixth Amendment. This amendment further revised our Financial Covenants.
Added
In connection with this Amendment, we paid an amendment fee of $25,000 and agreed to pay $150,000 when the loans are satisfied. If we are unable to close the merger with Tenax contemplated by the Merger Agreement or obtain a new lender to replace the Current Credit Facility we may not be able meet our financial obligations.
Removed
In connection with these changes, the Company paid an amendment fee of $20,000. 24 Although navigating the current business landscape remains challenging and it is difficult to predict period-to-period financial performance, we believe we will be able to meet our financial obligations for the foreseeable future.
Added
The use of cash was due to an increase in inventory of $5,450,000, reflecting material and production costs incurred for product to be delivered in 2026. This was partially offset by non-cash expenses of depreciation and stock-based compensation in the amounts of $2,499,000 and $1,047,000, respectively, and by a reduction in accounts receivable of $1,761,000.
Removed
However, if we are unable to obtain a waiver from our lender and they were to cease lending, we would not be able meet our financial obligations. As of December 31, 2024, we have borrowing capacity of approximately $7,095,000 under the Revolving Loan.
Added
For the year ended December 31, 2024, we generated cash flows from operations of $324,000 as compared to $4,862,000 for fiscal 2023.
Removed
Since it is not likely that we will be able to pay this debt, we have initiated steps to satisfy portions and refinance the balance.
Added
We also sold an aggregate of 116,851 shares of common stock to the public for net proceeds of $327,000. Additionally, we made payments of $196,000 pursuant to financing lease obligations and $9,000 on a loan payable. 32 OFF-BALANCE SHEET ARRANGEMENTS We did not have any off-balance sheet arrangements as of December 31, 2025 and 2024.
Removed
These steps included entering an At The Market Offering Agreement dated December 13, 2024, with Craig-Hallum Capital Group LLC pursuant to which, as of March 31, 2025, we have sold 326,791 shares of our common stock for gross proceeds of $1,412,000 of which $1,291,000 has been used to satisfy portions of the Related Party Notes.
Removed
We expect to invest approximately $1,600,000 in 2025 for new or upgraded equipment. Cash Provided by (Used In) Financing Activities For the year ended December 31, 2024, cash provided by financing activities was $2,368,000.

Other AIRI 10-K year-over-year comparisons