Tenax Aerospace Acquisition, LLC and Air Industries Group jointly announced today that they have entered into an Agreement and Plan of Merger to combine Tenax’s special mission aviation business with Air’s precision aerospace manufacturing business. The merging of the companies will create a larger and more diversified company well-positioned to serve the needs of their government and commercial customers. After the merger, the combined company expects to remain listed on the NYSE American under the symbol AIRI.

Based on preliminary and unaudited results for the fiscal year ended December 31, 2025, the combined company would have reported approximately $183.3 million of revenue with Adjusted EBITDA of approximately $65.0 million (see definition and reconciliation to GAAP financial measures below). The combined company today would have net debt of approximately $380.0 million (which includes $80.0 million in debt incurred in January of 2026 as a result of a refinancing at Tenax to purchase minority membership interests in Tenax). Net debt at the anticipated closing of the merger is expected to be up to $30.0 million lower than currently as a result of expected cash flow from operations and the expected sale of Tenax aircraft currently held for sale.

Based primarily on Tenax’s current contract run rate and excluding the impact of expenses related to Tenax’s January refinancing and the merger, the combined company is expected to generate pro-forma 2026 revenues in excess of $210.0 million and Adjusted EBITDA in excess of $75.0 million. After the merger, it is expected that the combined company will employ approximately 430 employees. Tom Foley, current Chairman of Tenax, is expected to become Chairman of the combined companies.

Leadership Commentary

Tom Foley, Chairman of Tenax, said: “This merger represents an important step for Tenax’s plans to expand its presence in the aerospace and defense sector. Partnering with Air Industries Group provides Tenax with a public listing for its shares, manufacturing capability, and access to permanent capital to support long-term growth. We look forward to working with Air Industries management to build a larger and more diversified aerospace company.”

Peter Rettaliata, Chairman of Air Industries Group, added: “The Board of Directors and management of Air believe this strategic merger is compelling. It represents an excellent outcome for Air shareholders, who will participate in a stronger combined company with a broader range of aerospace and defense products and the benefits of additional expertise and resources. Together, we believe the combined company will be well-positioned to create future value for both our customers and our shareholders.”

Transaction Overview

At the time of the merger, Air will issue shares of its common stock to holders of Tenax membership units. After the closing, Tenax shareholders are expected to own approximately 95% of Air’s outstanding shares while existing Air shareholders are expected to own approximately 5%. In accordance with the Merger Agreement and concurrent with the merger, two directors of Air will be selected jointly by the current Air board of directors and Tenax. Tenax will select six or more additional directors.

The transaction is not conditioned upon the receipt of financing by Tenax. Air’s existing indebtedness is expected to be refinanced at closing.

The exact number of shares to be issued to Tenax members will be determined based on a calculation of “AIR Net Indebtedness” (as defined in the Merger Agreement) which will establish the “Debt Adjusted AIR Share Price” (as defined in the Merger Agreement). Based on Air’s preliminary balance sheet as of December 31, 2025, this calculation results in a Debt Adjusted AIR Share Price of approximately $3.44 per Air share which would result in the issuance of approximately 112.5 million shares of Air common stock to Tenax members. The final merger price and resulting ownership percentages will be determined based on AIR Net Indebtedness calculated as of the end of the month-end most recently completed more than 15 days prior to closing.

If the average volume weighted price of Air’s common stock during the twenty trading days prior to the closing is less than the Debt Adjusted AIR Share Price, the Merger Agreement calls for Air to commence a tender offer to acquire up to one million shares of Air’s current shareholders’ common stock. In addition, on the first anniversary of the merger, shareholders of Air as of the business day immediately prior to the closing of the merger will have a contingent right, subject to specified conditions, to require Air to redeem their remaining shares if the twenty-day volume weighted average price for Air shares preceding such anniversary is less than 107.3% of the Debt Adjusted AIR Share Price. This redemption right will not be transferable.

The transaction remains subject to approval by Air shareholders, customary regulatory filings and U.S. government approvals, and other closing conditions typical for transactions of this size and type. Air’s directors and all of its named executive officers have agreed to vote any shares they hold in favor of the merger. The companies currently expect the merger to close before June 30, 2026, subject to satisfaction of these closing conditions.