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Organization and Basis of Presentation | 6 Months Ended
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Jun. 30, 2025
Organization and Basis of Presentation [Abstract] |
ORGANIZATION AND BASIS OF PRESENTATION | Note 1. ORGANIZATION AND BASIS OF PRESENTATION Organization Air Industries Group is a Nevada corporation (“AIRI”). The accompanying condensed consolidated financial statements presented are those of AIRI, and its wholly-owned subsidiaries; Air Industries Machining Corp. (“AIM”), Nassau Tool Works, Inc. (“NTW”), and the Sterling Engineering Corporation (“Sterling”) (together, the “Company”). Basis of Presentation The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and with Rule 8-03 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and six months ended June 30, 2025 are not necessarily indicative of the results that may be expected for the year ending December 31, 2025. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, as filed with the Securities and Exchange Commission on April 15, 2025, from which the accompanying condensed consolidated balance sheet dated December 31, 2024 was derived. Going Concern and Management’s Plan As of June 30, 2025, the Company was in default of its minimum Fixed Charge Coverage Ratio (“FCCR”) of 1.05x on a rolling 12-month basis having only attained a ratio of 0.76x. All other financial and business covenants required under the terms of its Current Credit Facility were met. The Current Credit Facility expires on December 30, 2025; therefore, the term loan has been classified as current at both June 30, 2025 and December 31, 2024. The terms of all outstanding indebtedness are discussed further in “Note 5. Debt”. Management’s plans are to increase revenues and reduce costs and measures were taken to reduce costs early in the third quarter of 2025. While the Company’s backlog has grown as a result of recent contract awards, due to the long-lead times to acquire raw materials and the time needed to manufacture complex assemblies, the Company anticipates sales will not begin to increase until early next year. The Company’s funded backlog, as of June 30, 2025, was $128.5 million. Further, it anticipates increases in funded orders in 2025 pursuant to Long-Term Agreements (“LTA”) from its existing customers as well as new customers. Management has begun negotiations with both the lender of its Current Credit Facility and holders of its related party notes in an effort to extend the maturity dates of such debt. Management also sought to obtain capital through sales of shares of the Company’s common stock in the public market. During the six months ended June 30, 2025, the Company received gross proceeds of $1,243,000 from the sale of its common stock pursuant to its At The Market Offering. Subsequent to June 30, 2025, the Company received an additional $3,623,000 in gross proceeds from the sale of its common stock pursuant to its At The Market Offering. The Company generally sources its raw material, principally metal casting or forgings, from domestic sources. As such, the Company is generally not exposed to increased prices on imports but would be subject to increased prices if proposed tariffs or disruptions in supply chains resulting from tariffs or other geopolitical events, cause the general level of prices for its products to increase. One component used by the Company on a key commercial aviation program is sourced from China. The Company’s contract with its customer requires the Company to absorb the first five percent (5%) of any cost increases with further increases absorbed by the customer. A substantial portion of the Company’s products are used in United States military aviation and as such changes in the US defense budget are more material to demand than to changes in general economic conditions. However, the Company does have exposure in commercial aviation; demand for these products may be reduced if general economic conditions deteriorate reducing demand for commercial air travel. The Company is required to maintain a collection account with its lender into which substantially all cash receipts are remitted. As a result of the Company’s failure to meet its FCCR for the period ended June 30, 2025, the Company’s lender could choose to exercise its rights under the Current Credit Facility, for example, increase the rate of interest or refuse to make loans under the revolving portion of the Current Credit Facility and keep the funds remitted to the collection account. If the lender were to raise the rate of interest, it would adversely impact the Company’s operating results. If the lender were to cease making new loans under the revolving facility, the Company would lack the funds to continue operations. The Current Credit Facility expiration date and the rights granted to the lender, raise substantial doubt about the Company’s ability to continue as a going concern for the one year commencing as of the date of filing these interim condensed consolidated financial statements. The accompanying condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded assets or the classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

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