What changed in this filing

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Item 1A. Risk Factors

2020-11-09 compared with 2020-08-07 · 100 added, 87 removed, 24 unchanged (89% of the section changed)

Risk Factors.

Prospective investors are

encouraged to consider the risks described in our 2019 Form 10-K, our Management’s Discussion and Analysis of Financial Condition

and Results of Operations contained in this Report and other information publicly disclosed or contained in documents we file with

the Securities and Exchange Commission before purchasing our securities.

The following risk factor supplements the risk factors

described in our 2019 Form 10-K, and should be read in conjunction with the other risk factors presented in our Annual Report which

are incorporated herein by reference.

The COVID-19 pandemic

and the resulting macroeconomic disruption have affected how we, our customers and our suppliers are operating our businesses,

and the duration and extent to which this will impact our future results of operations and overall financial performance remains

In March 2020, the World

Health Organization announced that infections caused by the coronavirus disease of 2019 (“COVID-19”) had become pandemic

investors are encouraged to consider the risks described in our 2019 Form 10-K, our Management’s Discussion and Analysis

of Financial Condition and Results of Operations contained in this Report and other information publicly disclosed or contained

in documents we file with the Securities and Exchange Commission before purchasing our securities.

The following risk factor supplements

the risk factors described in our 2019 Form 10-K, and should be read in conjunction with the other risk factors presented in our

Annual Report which are incorporated herein by reference.

COVID-19 pandemic and the resulting macroeconomic disruption have affected how we, our customers and our suppliers are operating

our businesses, and the duration and extent to which this will impact our future results of operations and overall financial performance

remains uncertain.

March 2020, the World Health Organization announced that infections caused by the coronavirus disease of 2019 (“COVID-19”)

had become pandemic and the U.S.

President announced a National Emergency relating to the disease.

National, state and local authorities, including

those in which our offices and manufacturing facilities are located, have adopted various regulations and orders, including “shelter

in place”

rules, restrictions on travel, mandates on the number of people that may gather in one location and closing non-essential

National, state and local authorities,

including those in which our offices and manufacturing facilities are located, have adopted various regulations and orders, including

“shelter in place”

rules, restrictions on travel, mandates on the number of people that may gather in one location

and closing non-essential businesses.

The global impact of the outbreak is continually evolving.

The measures adopted by

various governments and agencies, as well as the decision by many individuals and businesses will voluntarily shut down or self-quarantine,

had and are expected to continue to have serious adverse impacts on domestic and foreign economies of uncertain severity and duration.

measures adopted by various governments and agencies, as well as the decision by many individuals and businesses will voluntarily

shut down or self-quarantine, had and are expected to continue to have serious adverse impacts on domestic and foreign economies

of uncertain severity and duration.

The effectiveness of economic stabilization efforts adopted by governments is uncertain.

The likely overall economic impact of

the COVID-19 pandemic has been and will continue to be highly negative to the general economy.

While we continue to operate substantially

in the normal course, we have implemented procedures to promote employee safety including more frequent and enhanced cleaning and

adjusted schedules and work-flows to support physical distancing and our facilities are not operating under full staffing.

actions have resulted in increased operating costs.

Further, our operations were reduced by employee absenteeism in the second

quarter and we may be forced to close or reduce operations for reasons such as the health of our employees or because of disruptions

in the continued operation of our supply chain and sources of supply.

While the potential economic

impact brought by COVID-19 may be difficult to assess or predict, the pandemic has resulted in significant disruption of the commercial

travel and aerospace industries.

The pandemic has also caused significant disruption in global financial markets, and a recession

or long-term market correction resulting from the spread of COVID-19 could cause severe disruption and instability in the global

financial markets or deteriorations in credit and financing conditions, which could make it difficult for us to access debt and

equity capital on attractive terms, or at all, and impact our ability to fund business activities and repay debt on a timely basis.

At this time, we cannot

forecast with any certainty whether and to what degree the disruptions caused by the COVID-19 pandemic will increase, or the extent

to which the disruption may materially impact our consolidated financial position, consolidated results of operations, and consolidated

cash flows in fiscal 2020.

We have debt outstanding

under the Paycheck Protection Program, which is subject to the terms and conditions applicable to loans administered by the SBA

under the CARES Act, and we may be subject to an audit or enforcement action related to these loans.

AIM, NTW and Sterling (each

a “Borrower”) entered into government subsidized loans with SNB pursuant to the Paycheck Protection Program in an aggregate

principal amount slightly in excess of $2,400,000 (“SBA Loans”).

At least 60% of the proceeds of each SBA Loan (the

“Proceeds”) must be used for payroll and payroll-related costs, in accordance with the provisions of the CARES Act

and the rules promulgated thereunder (the “Loan Program”).

Each Borrower may apply to SNB for forgiveness of a portion

of its SBA Loan if the Proceeds are used for payroll costs, mortgage interest payments, lease payments or utility payments.

we believe each Borrower has used the proceeds of its SBA Loan for purposes that would permit forgiveness of substantially all

of its SBA Loan, no assurance can be provided that the SBA Loans will be forgiven in whole or in part.

Each Note provides

for customary events of default and contains a cross default provision in the event of a default under one of our other loans with

In the event of a default under a Note, SNB would have the right to declare any and all borrowings outstanding, together with

accrued and unpaid interest, to be immediately due and payable.

If substantially all of the debt evidenced by the SBA Loans were

to be accelerated, we may not have sufficient cash, be able to borrow sufficient funds or be able to sell sufficient assets to

repay the debt, which could immediately materially and adversely affect our cash flows, business, results of operations and financial

Additionally, each Note

is subject to the terms and conditions applicable to loans administered by the SBA under the Loan Program, which is subject to

revisions and changes by the SBA and Congress.

We may also be subject to CARES Act-specific lookbacks and audits that may be conducted

by other federal agencies, including oversight bodies created under the CARES Act.

Given that we received more than $2.0 million

under our SBA Loans, we will be subject to an audit.

Complying with such audit could divert management attention and require us

to expend significant time and resources, which could have an adverse effect on our business, financial condition and results of

Agreement and Plan of Merger dated July 29, 2013 between Air Industries Group, Inc.

and Air Industries Group (incorporated herein by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed August 30, 2013).

likely overall economic impact of the COVID-19 pandemic has been and will continue to be highly negative to the general economy.

While we continue to operate substantially in the normal course, we have implemented procedures to promote employee safety including

more frequent and enhanced cleaning and adjusted schedules and work-flows to support physical distancing and our facilities are

not operating under full staffing during the second quarter.

These actions have resulted in increased operating costs.

our operations were reduced by employee absenteeism in the second quarter.

During the third quarter essentially all employees

have returned to work in our facilities.

An increase in COVID-19 infections may result in further governmental restrictions and

we may be forced to close or reduce operations as a result.

the potential economic impact brought by COVID-19 may be difficult to assess or predict, the pandemic has resulted in significant

disruption of the commercial travel and aerospace industries.

The pandemic has also caused significant disruption in global financial

markets, and a recession or long-term market correction resulting from the spread of COVID-19 could cause severe disruption and

instability in the global financial markets or deteriorations in credit and financing conditions, which could make it difficult

for us to access debt and equity capital on attractive terms, or at all, and impact our ability to fund business activities and

repay debt on a timely basis.

this time, we cannot forecast with any certainty whether and to what degree the disruptions caused by the COVID-19 pandemic will

increase, or the extent to which the disruption may materially impact our consolidated financial position, consolidated results

of operations, and consolidated cash flows in fiscal 2020.

have debt outstanding under the Paycheck Protection Program, which is subject to the terms and conditions applicable to loans

administered by the SBA under the CARES Act, and we may be subject to an audit or enforcement action related to these loans.

AIM, NTW and Sterling

(each a “Borrower”) entered into government subsidized loans with SNB pursuant to the Paycheck Protection Program

in an aggregate principal amount of $2,414,000 (“SBA Loans”).

At least 60% of the proceeds of each SBA Loan (the “Proceeds”)

must be used for payroll and payroll-related costs, in accordance with the provisions of the CARES Act and the rules promulgated

thereunder (the “Loan Program”).

Each Borrower may apply to SNB for forgiveness of a portion of its SBA Loan if the

Proceeds are used for payroll costs, mortgage interest payments, lease payments or utility payments.

While we believe each Borrower

has used the proceeds of its SBA Loan for purposes that would permit forgiveness of substantially all of its SBA Loan, no assurance

can be provided that the SBA Loans will be forgiven in whole or in part.

Note provides for customary events of default and contains a cross default provision in the event of a default under one of our

other loans with SNB.

In the event of a default under a Note, SNB would have the right to declare any and all borrowings outstanding,

together with accrued and unpaid interest, to be immediately due and payable.

If substantially all of the debt evidenced by the

SBA Loans were to be accelerated, we may not have sufficient cash, be able to borrow sufficient funds or be able to sell sufficient

assets to repay the debt, which could immediately materially and adversely affect our cash flows, business, results of operations

and financial condition.

Additionally,

each Note is subject to the terms and conditions applicable to loans administered by the SBA under the Loan Program, which is

subject to revisions and changes by the SBA and Congress.

We may also be subject to CARES Act-specific lookbacks and audits that

may be conducted by other federal agencies, including oversight bodies created under the CARES Act.

Given that we received more

than $2.0 million under our SBA Loans, we will be subject to an audit.

Complying with such audit could divert management attention

and require us to expend significant time and resources, which could have an adverse effect on our business, financial condition

and results of operations.

and Plan of Merger dated July 29, 2013 between Air Industries Group, Inc.

and Air Industries Group (incorporated herein by

reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed August 30, 2013).

of Merger between Air Industries Group and Air Industries Group, Inc.

6 unchanged sentences

on Form 8-K filed August 30, 2013).

Certificate of Amendment increasing authorized shares of common stock to 60,000,000 shares (incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2019 filed on August 8, 2019).

of Amendment increasing authorized shares of common stock to 60,000,000 shares (incorporated by reference to the Company’s

Quarterly Report on Form 10-Q for the period ended June 30, 2019 filed on August 8, 2019).

and Restated By-Laws of the Company (incorporated herein by reference to Exhibit 3.2 to the Company’s Annual Report

on Form 10-K for the year ended December 31, 2014 filed on March 31, 2015).

Promissory Note dated May 6, 2020, between Sterling National Bank and Air Industries Machining Corp.

(incorporated herein by reference to Exhibit 10.1 to the Company’s Annual Report on Form 10-Q filed on May 15, 2020).

Promissory Note dated May 6, 2020, between Sterling National Bank and Nassau Tool Works Inc.

(incorporated herein by reference to Exhibit 10.2 to the Company’s Annual Report on Form 10-Q filed on May 15, 2020).

Promissory Note dated May 6, 2020, between Sterling National Bank and Sterling Engineering Corporation (incorporated herein by reference to Exhibit 10.3 to the Company’s Annual Report on Form 10-Q filed on May 15, 2020).

Note dated May 6, 2020, between Sterling National Bank and Air Industries Machining Corp.

(incorporated herein by reference

to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed on May 15, 2020).

Note dated May 6, 2020, between Sterling National Bank and Nassau Tool Works Inc.

(incorporated herein by reference to Exhibit

10.2 to the Company’s Quarterly Report on Form 10-Q filed on May 15, 2020).

Note dated May 6, 2020, between Sterling National Bank and Sterling Engineering Corporation (incorporated herein by reference

to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q filed on May 15, 2020).

First Amendment to Loan and Security Agreement with Sterling

National Bank.

Certifications

Certification of principal executive officer pursuant to Rule 13a-14 or Rule 15d-14 of Securities Exchange Act of 1934.

Certification of principal financial officer pursuant to Rule 13a-14 or Rule 15d-14 of the Exchange Act of 1934.

Certification of principal executive officer pursuant to Section 906 of Sarbanes-Oxley Act of 2002 (18 U.S.C.

Certification

of principal executive officer pursuant to Rule 13a-14 or Rule 15d-14 of Securities Exchange Act of 1934.

Certification

of principal financial officer pursuant to Rule 13a-14 or Rule 15d-14 of the Exchange Act of 1934.

Certification

of principal executive officer pursuant to Section 906 of Sarbanes-Oxley Act of 2002 (18 U.S.C.

Section 1350).

Certification of principal financial officer pursuant to Section 906 of Sarbanes-Oxley Act of 2002 (18 U.S.C.

Certification

of principal financial officer pursuant to Section 906 of Sarbanes-Oxley Act of 2002 (18 U.S.C.

Section 1350).

5 unchanged sentences

Taxonomy Extension Presentation Linkbase Document

Pursuant to the requirements

of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf

by the undersigned, thereunto duly authorized.

August 7, 2020

INDUSTRIES GROUP

to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report

to be signed on its behalf by the undersigned, thereunto duly authorized.

November 9, 2020

AIR INDUSTRIES GROUP

Michael Recca

Financial Officer

financial and accounting officer)

Michael Recca

Chief Financial Officer

(principal financial and accounting officer)

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1A. Risk Factors