0001213900-22-015031 | 10-K | XBRL Viewer

FORMATION AND BASIS OF PRESENTATION

Note 1. FORMATION AND BASIS OF PRESENTATION

Organization

Air Industries Group is a Nevada corporation (“AIRI”). As of and for the year ended December 31, 2021 and 2020, 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”).

Liquidity

At each reporting period, management evaluates whether there are conditions or events that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the financial statements are issued. The Company is required to make certain additional disclosures if management concludes that substantial doubt exists about the Company’s ability to continue as a going concern and such doubt is not alleviated by the Company’s plans or when the Company’s plans alleviate substantial doubt about its ability to continue as a going concern. The evaluation entails analyzing prospective operating budgets and forecasts for expectations regarding cash needs and comparing those needs to the current cash and cash equivalent balance and expectations regarding cash to be generated over the following year.

Although the global outbreak of COVID-19 negatively impacted the Company’s revenues, earnings and operating cash flows in 2020, management believes the Company’s operations substantially returned to normal in fiscal 2021. With fiscal 2021 now completed and the Company continuing to see the benefits from its recent investments in machinery and equipment, management believes the Company will continue to improve its liquidity. During 2021, the Company generated $4,064,000 of cash from operating activities. As such, based on the Company generating $4,064,000 of cash from operating activities as well as generating operating income of $2,487,000 for the year ended December 31, 2021, its current best estimates of fiscal 2022 sales, confirmed and expected orders, the strength of existing backlog, overall market demand, expected timing of future cash receipts and expenditures and the Company’s ability to access additional liquidity, if needed, the Company believes it will have adequate cash to support operations through at least March 31, 2023.

Reclassifications

Reclassifications occurred to certain 2020 amounts to conform to the 2021 classification. These reclassifications had no impact on the Company’s financial position and net income.

Subsequent Events

Management has evaluated subsequent events through the date of this filing.

Discontinued Operations

12 Months Ended

Dec. 31, 2021

Discontinued Operations and Disposal Groups [Abstract]

DISCONTINUED OPERATIONS

Note 2. DISCONTINUED OPERATIONS

As discussed in Note 14 on December 23, 2020, the Company and CPI Aerostructures (“CPI”), the buyer of our subsidiary Welding Metallurgy, Inc. (“WMI”), reached an agreement to settle the working capital dispute without additional litigation. The settlement provided that CPI and AIRI would instruct the escrow agent to release the balance of $ 1,380,684 remaining in the escrow account to CPI. The Company and CPI exchanged mutual releases customary in the circumstances. We originally placed a reserve of $1,770,000 against the $2,000,000 balance held in escrow, the remaining amount of $230,000 was charged to discontinued operations and classified as other expense for the year ended December 31, 2020.

Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2021

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Note 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principal Business Activity

The Company is a Tier 1 or Tier 2 manufacturer of precision assemblies and components for mission-critical aerospace and defense applications, and a prime contractor to the U.S. Department of Defense. The Company’s AIM and NTW subsidiaries manufactures flight critical or flight safety aircraft components including landing gear, arresting gear, flight controls, primarily for military aircraft, including the UH-60 Helicopter, the E2-D, and F-35, F-18 fighter aircraft, and the Pratt & Whitney Geared Turbofan jet engine. Sterling manufactures components used in jet engines of military and commercial aircraft and ground power turbine engines. The Company’s primary customers are large publicly traded companies including the four largest suppliers to the US Department of Defense.

Principles of Consolidation

The accompanying consolidated financial statements include accounts of the Company and its wholly-owned subsidiaries. Significant intercompany accounts and transactions have been eliminated in consolidation.

Cash and Cash Equivalents

Cash and cash equivalents include all highly liquid instruments with an original maturity of three months or less.

Accounts Receivable

Accounts receivable are reported at their outstanding unpaid principal balances net of allowances for uncollectible accounts. The Company provides for allowances for uncollectible receivables based on management’s estimate of uncollectible amounts considering age, collection history, and any other factors considered appropriate. The Company writes off accounts receivable against the allowance for doubtful accounts when a balance is determined to be uncollectible.

Inventory Valuation

The Company values inventory at the lower of cost on a first-in-first-out basis or an estimated net realizable value.

The Company generally purchases raw materials and supplies uniquely suited to the production of larger more complex parts, such as landing gear, only when non-cancellable contracts for orders have been received for finished goods. It occasionally produces larger more complex products, such as landing gear, in excess of purchase order quantities in anticipation of future purchase order demand. Historically this excess has been used in fulfilling future purchase orders. The Company purchases supplies and materials useful in a variety of products as deemed necessary even though orders have not been received. The Company periodically evaluates inventory items that are not secured by purchase orders and establishes write-downs to estimated net realizable value for obsolescence accordingly. The Company also writes-down inventory to estimated net realizable value for excess quantities, slow-moving goods, and for other impairments of value.

Prepaid Expenses and Other Current Assets

On December 23, 2020, the Company and CPI reached an agreement to settle the working capital dispute. The settlement provided that the escrow agent would release the balance of $ 1,380,684 remaining in the escrow account to CPI. The Company and CPI exchanged mutual releases customary in the circumstances.

Prepaid expenses and other current assets include purchase deposits, miscellaneous prepaid expenses and cash in escrow less a reserve. On December 23, 2020, the Company settled its working capital dispute with CPI, see Note 14 - Contingencies. As a result of this settlement, the Company released the cash that was held in escrow and therefore removed the reserve. The changes in the reserve are shown below and discussed in Note 2 – Discontinued Operations.

Description	Balance at Beginning of Year		Charges to Loss on Sale of Subsidiary		Deductions			Balance at end of year
Valuation reserve deducted from Prepaid Expenses and Other Current Assets:
Year ended December 31, 2020	$	1,770,000	$	-	$	(1,770,000	)	$	-

Property and Equipment

Property and equipment are carried at cost net of accumulated depreciation and amortization. Repair and maintenance charges are expensed as incurred. Property, equipment, and improvements are depreciated using the straight-line method over the estimated useful lives of the assets or the particular improvements. Expenditures for repairs and improvements in excess of $10,000 that add to the productive capacity or extend the useful life of an asset are capitalized. Upon disposition, the cost and related accumulated depreciation are removed from the accounts and any related gain or loss is reflected in earnings.

Long-Lived and Intangible Assets

Identifiable intangible assets are amortized using the straight-line method over the period of expected benefit.

Long-lived assets and intangible assets subject to amortization to be held and used are reviewed for impairment whenever events or changes in circumstances indicate that the related carrying amount may be impaired. The Company records an impairment loss if the undiscounted future cash flows are found to be less than the carrying amount of the asset. If an impairment loss has occurred, a charge is recorded to reduce the carrying amount of the asset to fair value.

Deferred Financing Costs

Costs incurred with obtaining and executing revolving debt arrangements are capitalized and recorded in current assets and amortized using the effective interest method over the term of the related debt. Costs incurred with obtaining and executing other debt arrangements are presented as a direct deduction from the carrying value of the associated debt and also amortized using the effective interest method over the term of the related debt. The amortization of financing costs is included in interest and financing costs in the Consolidated Statements of Income.

Revenue Recognition

The Company accounts for revenue recognition in accordance with accounting guidance codified as FASB ASC 606 “Revenue from Contracts with Customers” (“ASC 606”), as amended, regarding revenue from contracts with customers. Under the standard an entity is required to recognize revenue to depict the transfer of promised goods to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods.

Under ASC 606, revenue is recognized as the customer obtains control of the goods and services promised in the contract (i.e., performance obligations). In evaluating our contracts with our customers under ASC 606, we have determined that there is no future performance obligation once delivery has occurred.

The Company’s revenues are primarily derived from consideration paid by customers for tangible goods. The Company analyzes its different goods by segment to determine the appropriate basis for revenue recognition, as described below. There are no material upfront costs for operations that are incurred from contracts with customers.

The Company’s rights to payments for goods transferred to customers are conditional only on the passage of time and not on any other criteria. Payment terms and conditions vary by contract, although terms generally include a requirement of payment within 30 to 75 days.

Payments received in advance from customers are recorded as deferred revenue until earned, at which time revenue is recognized. The Terms and Conditions contained in our customer purchase orders often provide for liquidated damages in the event that a stop work order is issued prior to the final delivery. The Company utilizes a Returned Merchandise Authorization or RMA process for determining whether to accept returned products. Customer requests to return products are reviewed by the contracts department and if the request is approved, a credit is issued upon receipt of the product. Net sales represent gross sales less returns and allowances.

Use of Estimates

In preparing the financial statements, management is required to make estimates and assumptions that affect the reported amounts in the financial statements and accompanying notes. The more significant management estimates are the allowance for doubtful accounts, useful lives of property and equipment, provisions for inventory obsolescence, accrued expenses and whether to accrue for various contingencies. Actual results could differ from those estimates. Changes in facts and circumstances may result in revised estimates, which are recorded in the period in which they become known.

Credit and Concentration Risks

A large percentage of the Company’s revenues are derived from a small number of customers for U.S. Military Aviation.

There were three customers that represented 75.4% of total sales, and three customers that represented 73.9% of total sales for the years ended December 31, 2021 and 2020, respectively. This is set forth in the table below.

	Percentage of Sales
Customer	2021			2020

1		37.2	%		30.4	%
2		25.7	%		30.3	%
3		12.5	%		13.2	%

There were three customers that represented 74.7% of gross accounts receivable and 80.3% of gross accounts receivable at December 31, 2021 and 2020, respectively. This is set forth in the table below.

	Percentage of Receivables
	December			December
Customer	2021			2020
1		50.3	%		57.1	%
2		12.7	%		12.0	%
3		11.7	%		11.2	%

Cash and Cash equivalents

During the year, the Company had occasionally maintained balances in its bank accounts that were in excess of the FDIC limit. The Company has not experienced any losses on these accounts.

Major Suppliers

The Company has several key sole-source suppliers of various parts that are important for one or more of its products. These suppliers are its only source for such parts and, therefore, in the event any of them were to go out of business or be unable to provide parts for any reason, its business could be severely harmed.

Income Taxes

The Company accounts for income taxes in accordance with accounting guidance now codified as FASB ASC 740, “Income Taxes,” which requires that the Company recognize deferred tax liabilities and assets based on the differences between the financial statement carrying amounts and the tax bases of assets and liabilities, using enacted tax rates in effect in the years the differences are expected to reverse.

The provision for, or benefit from, income taxes includes deferred taxes resulting from the temporary differences in income for financial and tax purposes using the liability method. Such temporary differences result primarily from the differences in the carrying value of assets and liabilities. Future realization of deferred income tax assets requires sufficient taxable income within the carryback, carryforward period available under tax law. We evaluate, on a quarterly basis whether, based on all available evidence, it is probable that the deferred income tax assets are realizable. Valuation allowances are established when it is more likely than not that the tax benefit of the deferred tax asset will not be realized. The evaluation, as prescribed by ASC 740-10, “Income Taxes,” includes the consideration of all available evidence, both positive and negative, regarding historical operating results including recent years with reported losses, the estimated timing of future reversals of existing taxable temporary differences, estimated future taxable income exclusive of reversing temporary differences and carryforwards, and potential tax planning strategies which may be employed to prevent an operating loss or tax credit carryforward from expiring unused.

The Company accounts for uncertainties in income taxes under the provisions of FASB ASC 740-10-05 (the “Subtopic”). The Subtopic clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements. The Subtopic prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The Subtopic provides guidance on the de-recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition.

Earnings per share

Basic earnings per share (“EPS”) is computed by dividing the net income applicable to common stockholders by the weighted-average number of shares of common stock outstanding for the period.

For purposes of calculating diluted earnings per common share, the numerator includes net income plus interest on convertible notes payable assumed converted as of the first day of the period. The denominator includes both the weighted-average number of shares of common stock outstanding during the period and the number of common stock equivalents if the inclusion of such common stock equivalents is dilutive. Dilutive common stock equivalents potentially include stock options and warrants using the treasury stock method and convertible notes payable using the if-converted method.

The following is the calculation of income from continuing operations applicable to common stockholders utilized to calculate the numerator for EPS:

	2021		2020
Income from continuing operations - Basic	$	1,627,000	$	1,326,000
Add: Convertible Note Interest for Potential Note Conversion		322,000		499,000
Add: Convertible Note debt discount for Potential Note Conversion		-		149,000

Income from continuing operations used to calculate earnings per share - Diluted	$	1,949,000	$	1,974,000

The following is a reconciliation of the denominators of basic and diluted EPS computations for continuing operations:

	2021		2020
Weighted average shares outstanding used to compute basic
earnings per share		32,049,372		30,742,154
Effect of dilutive stock options and warrants		317,371		1,590,000
Effect of dilutive convertible notes payable		4,057,432		4,414,929
Weighted average shares outstanding and dilutive securities used to compute dilutive earnings per share		36,424,175		36,747,083

Per share amount - basic	$	0.05	$	0.04
Per share amount - diluted	$	0.05	$	0.05

The following securities have been excluded from the calculation as the exercise price was greater than the average market price of the common shares:

	2021		2020

Stock Options		1,183,500		549,000
Warrants		1,227,211		1,909,902
		2,410,711		2,458,902

Stock-Based Compensation

The Company accounts for stock-based compensation in accordance with FASB ASC 718, “Compensation – Stock Compensation.” Under the fair value recognition provision of the ASC, stock-based compensation cost is estimated at the grant date based on the fair value of the award. The Company estimates the fair value of stock options and warrants granted using the Black-Scholes-Merton option pricing model and stock grants at their closing reported market value. Stock compensation expense for employees amounted to $443,000 and $308,000 for the years ended December 31, 2021 and 2020, respectively. Stock compensation expense for directors amounted to $210,000 and $211,000 for the years ended December 31, 2021 and 2020, respectively. Stock compensation expenses for employees and directors were included in operating expenses in the accompanying Consolidated Statements of Income.

Goodwill

Goodwill represents the excess of the acquisition cost of businesses over the fair value of the identifiable net assets acquired. The goodwill amount of $163,000 at December 31, 2021 and 2020 relates to the acquisition of NTW.

The Company accounts for the impairment of goodwill under the provisions of ASU 2011-08 (“ASU 2011-08”), “Intangibles Goodwill and Other (Topic 350): Testing Goodwill for Impairment.” ASU 2011-08 updated the guidance on the periodic testing of goodwill for impairment. The updated guidance gives companies the option to perform a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount.

The Company performs impairment testing for goodwill annually, or more frequently when indicators of impairment exist. As discussed above, the Company adopted ASU 2011-08 and performs a qualitative assessment in the fourth quarter of each year to determine whether it was more likely than not that the fair value of a reporting unit is less than its carrying amount.

The Company determined that there has been no impairment of goodwill at December 31, 2021 and 2020.

Freight Out

Freight out is included in operating expenses and amounted to $135,000 and $91,000 for the years ended December 31, 2021 and 2020, respectively.

Recently Issued Accounting Pronouncements

In August 2020, the FASB issued ASU No. 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40) (“ASU 2020-06), which is intended to address issues identified as a result of the complexity associated with applying GAAP for certain financial instruments with characteristics of liabilities and equity. For convertible instruments, ASU 2020-06 reduces the number of accounting models for convertible debt instruments and convertible preferred stock, and enhances information transparency by making targeted improvements to the disclosures for convertible instruments and earnings-per-share guidance on the basis of feedback from financial statement users. ASU 2020-06 is effective for fiscal years, and interim periods in those fiscal years, beginning after December 15, 2021 (effective January 1, 2022 for the Company). The Company does not expect that the adoption of this new accounting guidance will have a material effect on its financial statements.

On January 21, 2021, the Company adopted ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”), which is intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. The adoption of ASU 2019-12 did not have a material effect on its financial statements.

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326) (“ASU 2016-13”), which significantly changes how entities will account for credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. ASU 2016-13 replaces the existing incurred loss model with an expected credit loss model that requires entities to estimate an expected lifetime credit loss on most financial assets and certain other instruments. Under ASU 2016-13 credit impairment is recognized as an allowance for credit losses, rather than as a direct write-down of the amortized cost basis of a financial asset. The impairment allowance is a valuation account deducted from the amortized cost basis of financial assets to present the net amount expected to be collected on the financial asset. Once the new pronouncement is adopted by the Company, the allowance for credit losses must be adjusted for management’s current estimate at each reporting date. The new guidance provides no threshold for recognition of impairment allowance. Therefore, entities must also measure expected credit losses on assets that have a low risk of loss. For instance, trade receivables that are either current or not yet due may not require an allowance reserve under currently generally accepted accounting principles, but under the new standard, the Company will have to estimate an allowance for expected credit losses on trade receivables under ASU 2016-13. ASU 2016-13 is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2022 for smaller reporting companies. Early adoption is permitted. The Company is currently assessing the impact ASU 2016-13 will have on its consolidated financial statements.

The Company does not believe that any other recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying consolidated financial statements.

Accounts Receivable

12 Months Ended

Dec. 31, 2021

Receivables [Abstract]

ACCOUNTS RECEIVABLE

Note 4. ACCOUNTS RECEIVABLE

The components of accounts receivable at December 31, are detailed as follows:

	December 31, 2021			December 31, 2020

Accounts Receivable Gross	$	11,067,000		$	9,762,000
Allowance for Doubtful Accounts		(594,000	)		(964,000	)
Accounts Receivable Net	$	10,473,000		$	8,798,000

The allowance for doubtful accounts for the years ended December 31, 2021 and 2020 is as follows:

	Balance at Beginning of Year		Charged to Costs and Expenses		Deductions from Reserves		Balance at End of Year
Year ended December 31, 2021 Allowance for Doubtful Accounts	$	964,000	$	134,000	$	504,000	$	594,000
Year ended December 31, 2020 Allowance for Doubtful Accounts	$	859,000	$	483,000	$	378,000	$	964,000

Inventory

12 Months Ended

Dec. 31, 2021

Inventory Disclosure [Abstract]

INVENTORY

Note 5. INVENTORY

The components of inventory at December 31, consisted of the following:

	December 31,			December 31,
	2021			2020

Raw Materials	$	3,410,000		$	3,951,000
Work In Progress		20,926,000			21,933,000
Finished Goods		8,350,000			8,831,000
Reserve		(3,154,000	)		(2,595,000	)
Total Inventory	$	29,532,000		$	32,120,000

Property and Equipment

12 Months Ended

Dec. 31, 2021

Property, Plant and Equipment [Abstract]

PROPERTY AND EQUIPMENT

Note 6. PROPERTY AND EQUIPMENT

The components of property and equipment at December 31, consisted of the following:

	December 31,			December 31,
	2021			2020

Land	$	300,000		$	300,000
Buildings and Improvements		1,723,000			1,683,000
Machinery and Equipment		22,013,000			21,738,000
Finance Lease Machinery and Equipment		375,000			78,000
Tools and Instruments		12,866,000			12,116,000
Automotive Equipment		200,000			148,000
Furniture and Fixtures		290,000			290,000
Leasehold Improvements		882,000			855,000
Computers and Software		583,000			436,000
Total Property and Equipment		39,232,000			37,644,000
Less: Accumulated Depreciation		(30,828,000	)		(28,063,000	)
Property and Equipment, net	$	8,404,000		$	9,581,000

Depreciation expense for the years ended December 31, 2021 and 2020 was approximately $2,803,000 and $2,570,000, respectively. Assets held under finance lease obligations are depreciated over the shorter of their related lease terms or their estimated productive lives. Depreciation of assets under finance leases is included in depreciation expense for 2021 and 2020. Accumulated depreciation on these assets was approximately $36,000 and $28,000 as of December 31, 2021 and 2020, respectively.

Accounts Payable and Accrued Expenses

12 Months Ended

Dec. 31, 2021

Payables and Accruals [Abstract]

ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Note 7. ACCOUNTS PAYABLE AND ACCRUED EXPENSES

The components of accounts payable and accrued expenses at December 31, are detailed as follows:

	December 31, 2021		December 31, 2020

Accounts Payable	$	5,460,000	$	7,240,000
Accrued Payroll		852,000		663,000
Accrued Interest - related parties		-		400,000
Accrued Interest - others		-		42,000
Accrued expenses - other		411,000		337,000
Accounts Payable and accrued expenses	$	6,723,000	$	8,682,000

Sale and Leaseback Transaction

12 Months Ended

Dec. 31, 2021

Leases [Abstract]

SALE AND LEASEBACK TRANSACTION

Note 8. SALE AND LEASEBACK TRANSACTION

On October 24, 2006, the Company consummated a Sale - Leaseback Arrangement, whereby the Company sold the buildings and real property located in Bay Shore, New York (the “Bay Shore Property”) for a purchase price of $6,200,000. The Company realized a gain on the sale of $1,051,000 of which $300,000 was recognized during the year ended December 31, 2006. The remaining $751,000 is being recognized ratably over the remaining term of the twenty - year lease at approximately $38,000 per year. The gain is included in Other Income in the accompanying Consolidated Statements of Income. The unrecognized portion of the gain in the amount of $181,000 and $219,000 as of December 31, 2021 and 2020, respectively, is classified as Deferred Gain on Sale in the accompanying Consolidated Balance Sheets.

The Company accounted for these transactions under the provisions of FASB ASC 840-40, “Leases-Sale-Leaseback Transactions”.

Simultaneous with the closing of the sale of the Bay Shore Property, the Company entered into a 20-year triple- net lease (the “Lease”) expiring in September 2026 with the purchaser for the property. Base annual rent is approximately $540,000 for the first five years, $560,000 for the sixth year, and thereafter increases 3% per year. The Lease grants the Company an option to renew the Lease for an additional period of five years. The Company has on deposit with the purchaser $89,000 as security for the performance of its obligations under the Lease. In addition, at December 31, 2021, the Company had on deposit $150,000 with the purchaser as security for the completion of certain repairs and upgrades to the Bay Shore Property. In 2020, the landlord utilized the amounts on deposit to install air conditioning throughout the manufacturing facility. At December 31, 2021, this amount was included in the caption Deferred Finance costs, Net, Deposit and Other Assets in the accompanying Consolidated Balance Sheets. Pursuant to the terms of the Lease, the Company is required to pay all of the costs associated with the operation of the facilities, including, without limitation, insurance, taxes and maintenance. The lease also contains customary representations, warranties, obligations, conditions and indemnification provisions and grants the purchaser customary remedies upon a breach of the lease by the Company, including the right to terminate the Lease and hold the Company liable for any deficiency in future rent. See Note 10 – Operating Lease Liabilities.

Notes Payable, Related Party Notes Payable and Finance Lease Obligations

12 Months Ended

Dec. 31, 2021

Debt Disclosure [Abstract]

NOTES PAYABLE, RELATED PARTY NOTES PAYABLE AND FINANCE LEASE OBLIGATIONS

Note 9. NOTES PAYABLE, RELATED PARTY NOTES PAYABLE AND FINANCE LEASE OBLIGATIONS

Notes payable, related party notes payable and finance lease obligations consist of the following:

	December 31,			December 31,
	2021			2020

Revolving credit note payable to Webster Bank (F/K/A Sterling National Bank) (“Webster”)	$	12,456,000		$	15,649,000
Term loan, Webster		4,192,000			5,558,000
Finance lease obligations		263,000			6,000
Loans Payable - financed assets		39,000			48,000
Related party notes payable		6,412,000			6,012,000
Subtotal		23,362,000			27,273,000
Less: Current portion of notes payable, related party notes payable and finance lease obligations		(14,112,000	)		(16,475,000	)
Notes payable, related party notes payable and finance lease obligations, net of current portion	$	9,250,000		$	10,798,000

Webster Bank (F/K/A Sterling National Bank) (“Webster”)

On December 31, 2019, the Company entered into a loan facility (“Webster Facility”) with Webster expiring on December 30, 2022. The loan facility originally provided for a $16,000,000 revolving loan (“Webster revolving line of credit”) and a term loan (“Webster term loan”).

In 2020, the Company entered into the First Amendment to the Loan and Security Agreement (“First Amendment”). The terms of the amendment increased the Term Loan to $5,685,000. The repayment terms of the term loan were amended to provide monthly principal installments in the amount of $67,679 beginning on December 1, 2020, with a final payment of any unpaid balance of principal and interest payable on December 30, 2022. Additionally, the date by which certain subordinated third-party notes need to be extended was changed from September 30, 2020 to November 30, 2020. The Company paid an amendment fee of $20,000.

On June 14, 2021, the Company entered into the Second Amendment to the Loan and Security Agreement (“Second Amendment”). The purpose of the Second Amendment was to clarify the definition and calculation of Excess Cash Flow, and to confirm the extension of the due date for the payment of the Excess Cash Flow payment. For so long as the Webster term loan remains outstanding, if Excess Cash Flow (as defined) is a positive number for any fiscal year the Company shall pay to Webster an amount equal to the lesser of (i) twenty-five percent (25%) of the Excess Cash Flow for such fiscal year and (ii) the outstanding principal balance of the term loan. Such payment shall be made to Webster and applied to the outstanding principal balance of the term loan, on or prior to the close of the fiscal year immediately following such fiscal year. The amount of the Excess Cash Flow payment for the year ended December 31, 2020 was calculated to be $558,750. Per the terms of the Second Amendment, the Excess Cash Flow was payable in three instalments of $186,250 on each of June 15, 2021, June 30, 2021, and September 15, 2021. As of September 30, 2021, the Company paid this in full. Additionally, the Company paid an amendment fee of $10,000. The amount of the Excess Cash Flow for the year ended December 31, 2021 was calculated to be $787,000. This is scheduled to be paid on or about April 15, 2022 per the terms of the Webster Facility.

On December 7, 2021, the Company entered in the Third Amendment to the Loan and Security Agreement (“Third Amendment”). The purpose of the amendment was to extend the maturity date of both the Webster revolving line of credit and the Webster term loan by three years, from December 30, 2022 to December 30, 2025. Additionally, the Webster revolving line of credit was increased to $20,000,000 from $16,000,000 and the inventory sublimit for the Webster revolving line of credit was increased to $14,000,000 from $11,000,000. Under the terms of the Third Amendment, the Company is now allowed, subject to certain limitations, to begin amortizing a portion of its subordinated debt. The Company paid an amendment fee of $75,000 pursuant to this amendment which is included in Deferred Financing Costs, Net, Deposits and Other Assets, in the accompanying Consolidated Balance Sheets and is amortized over the term of the loan.

The terms of the Webster Facility require that, among other things, the Company maintain a specified Fixed Charge Coverage Ratio of 1.25 to 1.00 at the end of each Fiscal Quarter beginning with the Fiscal Quarter ending March 31, 2020. In addition, the Company is limited in the amount of Capital Expenditures it can make. As of December 31, 2021, and 2020, the Company was in compliance with all loan covenants. The Webster Facility also restricts the amount of dividends the Company may pay to its stockholders. Substantially all of the Company’s assets are pledged as collateral under the Webster Facility.

The aggregate payments for the term note at December 31, 2021 are as follows:

For the year ending	Amount
December 31, 2022	$	1,599,000
December 31, 2023		812,000
December 31, 2024		812,000
December 31, 2025		969,000
Webster Term Loan payable		4,192,000
Less: debt issuance costs		(54,000	)
Total Webster Term Loan payable, net of debt issuance costs		4,138,000
Less: Current portion of Webster Term Loan payable		(1,599,000	)
Total long-term portion of Webster Term Loan payable	$	2,539,000

Under the terms of the Webster Facility, both the Webster revolving line of credit and the Webster term loan bear interest at a rate equal to the sum of a Base Rate plus an Applicable Margin. The Base rate is the greater of (a) 3.5% and (b) the rate per annum published from time to time in the “Money Rates” table of the Wall Street Journal as the base or prime rate for corporate loans. The Webster credit agreement provides for several alternative rates if in the future the Wall Street Journal no longer publishes a base or prime rate. The Applicable Margin is minus 0.65%. In both 2021 and 2020 the average interest paid was 3.5%.

As of December 31, 2021, the Company’s debt to Webster in the amount of $16,648,000 consisted of the Webster revolving line of credit note in the amount of $12,456,000 and the Webster term loan in the amount of $4,192,000. Interest expense for the year ending December 31, 2021 amounted to $704,000 for this credit facility.

As of December 31, 2020, the Company’s debt to Webster in the amount of $21,207,000 consisted of the Webster revolving line of credit note in the amount of $15,649,000 and the Webster term loan in the amount of $5,558,000. Interest expense for the year ending December 31, 2020 amounted to $586,000 for the Webster facility.

Finance Lease Obligations

The Company entered into a Finance lease in December of 2021 for the purchase of new manufacturing equipment. The obligation for the Finance lease as of December 31, 2021 is $262,000. The lease has an imputed interest rate of 4.2% per annum and is payable monthly with the final payment due on December 17, 2026.

As of December 31, 2021, the aggregate future minimum finance lease payments, including imputed interest are as follows:

For the year ending	Amount
December 31, 2022	$	58,000
December 31, 2023		58,000
December 31, 2024		58,000
December 31, 2025		58,000
December 31, 2026		59,000
Total future minimum finance lease payments		291,000
Less: imputed interest		(29,000	)
Less: Current portion		(48,000	)
Long-term portion	$	214,000

Loans Payable – Financed Assets

The Company financed the purchase a delivery vehicle in July 2020. The loan obligation totaled $39,000 and $48,000 as of December 31, 2021 and 2020, respectively. The loan bears no interest and a final payment is due and payable for all unpaid principal on July 20, 2026.

Annual maturities of this loan are as follows:

For the year ending	Amount
December 31, 2022	$	9,000
December 31, 2023		9,000
December 31, 2024		9,000
December 31, 2025		9,000
Thereafter		3,000
Loans Payable - financed assets		39,000
Less: Current portion		(9,000	)
Long-term portion	$	30,000

Related Party Notes Payable

Taglich Brothers, Inc. is a corporation co-founded by two directors of the Company, Michael and Robert Taglich.

Taglich Brothers, Inc. has acted as placement agent for various debt and equity financing transactions and has received cash and equity compensation for their services.

From 2016 through 2020, the Company entered into various subordinated notes payable and convertible subordinated notes payable with Michael and Robert Taglich. These notes resulted in proceeds to the Company totaling $6,550,000. In connection with these notes, Michael and Robert were issued a total of 355,082 shares of common stock and Taglich Brothers Inc. was issued promissory notes totaling $554,000 for placement agency fees. At December 31, 2020, related party notes payable totaled $6,012,000 and accrued interest totaled $400,000.

On January 1, 2021, the related party subordinated notes due to Michael and Robert Taglich and Taglich Brothers, Inc., were amended to include all accrued interest through December 31, 2020 in the principal balance of the notes. Per the terms of the Webster Facility, these notes remain subordinate to the Webster Facility and are due on July 1, 2026. Approximately $2,732,000 of the related party subordinated notes can be converted at the option of the holder into Common Stock of the Company at $1.50 per share, while the remaining $2,080,000 of the related party subordinated notes can be converted at the option of the holder into common stock of the Company at $0.93 per share. There are no principal payments due on these notes. Under the terms of the Third Amendment to the Webster Facility, the Company is now allowed, subject to certain limitations, to begin amortizing a portion of this subordinated debt. The note holders and the principal balance of the notes as amended on January 1, 2021 are shown below:

	Michael Taglich,		Robert Taglich,		Taglich Brothers,
	Chairman		Director		Inc.		Total
Convertible Subordinated Notes	$	2,666,000	$	1,905,000	$	241,000	$	4,812,000
Subordinated Notes		1,250,000		350,000		-		1,600,000
Total	$	3,916,000	$	2,255,000	$	241,000	$	6,412,000

The interest rate on the Convertible Subordinated Notes in the principal amount of $2,732,000 bear interest at a rate of 6%, and in the principal amount of $2,080,000 bear interest at a rate of 7%. The Subordinated Notes in the amount of $1,600,000 bear interest at the rate of 12%.

For the years ended December 31, 2021 and 2020, no principal payments have been made on these notes and the principal balances remain unchanged from the table above. Interest expense for the years ended December 31, 2021 and 2020 on all related party notes payable was $460,000 and $781,000, respectively.

SBA Loans

In May 2020, AIM, NTW and Sterling entered into SBA Loans with Webster as the lender in an aggregate principal amount of $2,414,000, which was forgiven by the SBA in December of 2020. Each SBA Loan was evidenced by a Note. Subject to the terms of the Note, the SBA Loans bore interest at a fixed rate of one percent (1%) per annum, with the first six months of interest deferred, had an initial term of two years, and was unsecured and guaranteed by the SBA. At least 60% of the proceeds of each Loan must be used for payroll and payroll-related costs, in accordance with the applicable provisions of the federal statute authorizing the loan program administered by the SBA and the rules promulgated thereunder (the “Loan Program”). In December 2020, the Company was notified that the loans and all interest accrued thereon had been forgiven.

The Company elected to treat the SBA Loans as debt under FASB ASC 470. As such, the Company derecognized the liability when the loans were forgiven and the Company was legally released from the loans.

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

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OPERATING LEASE LIABILITIES

Operating Lease Liabilities

12 Months Ended

Dec. 31, 2021

Disclosure Text Block [Abstract]

Note 10. OPERATING LEASE LIABILITIES

The Company has operating and finance leases for leased office and manufacturing facilities and equipment leases. The Company leases certain machinery and equipment under finance leases and leases its offices and manufacturing facilities under operating leases. The leases have remaining lease terms of one to six years, some of which include options to extend or terminate the leases.

	December 31,			December 31,
	2021			2020
Weighted Average Remaining Lease Term - in years		4.53			5.53
Weighted Average discount rate - %		8.89	%		8.89	%

The aggregate undiscounted cash flows of operating lease payments, with remaining terms greater than one year are as follows:

	Amount
December 31, 2022	$	1,007,000
December 31, 2023		1,038,000
December 31, 2024		1,070,000
December 31, 2025		992,000
December 31, 2026		730,000
Total future minimum lease payments		4,837,000
Less: discount		(910,000	)
Total operating lease maturities		3,927,000
Less: current portion of operating lease liabilities		(686,000	)
Total long term portion of operating lease maturities	$	3,241,000

On April 29, 2021 the Company entered into an agreement to surrender possession of the premises of the former corporate office, located in Hauppauge, NY. The Company made a one-time payment of 40% of the remaining balance due to the landlord as of May 1, 2021, approximately $37,000. The Company had previously recognized a lease impairment of $275,000 to its Operating Lease Right-of-Use-Asset for the year-ended December 31, 2019.

NTW’s warehouse lease was terminated in May 2020 by its landlord under the terms of its lease agreement. Additionally, the Company entered into a new lease agreement for warehouse space in Bohemia, NY. The new lease term commenced on April 1, 2020 and expires on May 31, 2025. During the first year of the lease, the monthly rent is $10,964 and increases 3% each year thereafter. The final two months are equal installments of $1,746.

Rent expense for the years ended December 31, 2021 and 2020 was $1,069,000 and $1,173,000, respectively.

Liability Related to the Sale of Future Proceeds from Disposition of Subsidiary

12 Months Ended

Dec. 31, 2021

Note 11. LIABILITY RELATED TO THE SALE OF FUTURE PROCEEDS FROM DISPOSITION OF SUBSIDIARY

In connection with the sale of the Company’s wholly-owned subsidiary, AMK Welding, Inc. (“AMK”) to Meyer Tool, Inc., (“Meyer”) in 2017, Meyer was obligated to pay the Company within 30 days after the end of each calendar quarter, commencing April 1, 2017, an amount equal to five (5%) percent of the net sales of AMK for that quarter until the aggregate payments made to the Company (the “Meyer Agreement”) equals $1,500,000 (the “Maximum Amount”).

In order to increase liquidity, on January 15, 2019, the Company entered into a “Purchase Agreement” with 15 accredited investors (the “Purchasers”), including Michael and Robert Taglich, pursuant to which the Company assigned to the Purchasers all of its rights, title and interest to the remaining $1,137,000 of the $1,500,000 in payments due from Meyer for the sale of AMK (the “Remaining Amount”) for an immediate payment of $800,000, including $100,000 from each of Michael and Robert Taglich, and $75,000 for the benefit of the children of Michael Taglich. The timing of the payments is based upon the net sales of AMK. If the Purchasers have not received the entire Remaining Amount by March 31, 2023, they have the right to demand payment of their pro rata portion of the unpaid Remaining Amount from the Company (“Put Right”). To the extent the Purchasers exercise their Put Right, the remaining payments from Meyer will be retained by the Company.

The Company recognized $326,000 and $402,000 of non-cash income for the years ended December 31, 2021 and 2020, respectively, reflected in “other income, net” on the consolidated statements of income and recorded $98,000 and $122,000 of related non-cash interest expense related to the Purchase Agreement for the years ended December 31, 2021 and 2020, respectively.

The table below shows the activity within the liability account for the years ended December 31, 2021 and 2020:

	December 31, 2021			December 31, 2020
Liabilities related to sale of future proceeds from disposition of subsidiaries - beginning balance	$	322,000		$	602,000
Non-Cash other income recognized		(360,000	)		(402,000	)
Non-Cash interest expense recognized		97,000			122,000
Liabilities related to sale of future proceeds from disposition of subsidiary - ending balance		59,000			322,000
Less: unamortized transaction costs		(3,000	)		(3,000	)
Liability related to sale of future proceeds from disposition of subsidiary, net	$	56,000		$	319,000

Stockholders' Equity

12 Months Ended

Dec. 31, 2021

Stockholders' Equity [Abstract]

STOCKHOLDERS' EQUITY

Note 12. STOCKHOLDERS’ EQUITY

Common Stock – Issuance of Securities

In January 2020, the Company issued and sold 419,597 shares of its common stock for gross proceeds of $984,000 pursuant to a Form S-3 filed on October 10, 2019 as updated on January 15, 2020. Costs of the sale amounted to $145,000.

During the year ended December 31, 2020, the Company issued 1,830,631 shares of common stock to convert third party subordinated debt totaling $2,589,000 to equity.

During the year ended December 31, 2020, the Company issued 178,405 shares of common stock in payment of director’s fees totaling $211,000.

During the year ended December 31, 2021, the Company issued 169,811 shares of common stock in payment of directors’ fees totaling $210,000.

During the year ended December 31, 2021, the Company issued 51,224 shares of common stock for the cashless exercise of stock options.

During the first quarter of 2022, the Company issued 55,214 shares of common stock in payment of directors’ fees totaling $50,000.

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

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Disclosure Text Block Supplement [Abstract]

Employee Benefits Plans

12 Months Ended

Dec. 31, 2021

EMPLOYEE BENEFITS PLANS

Note 13. EMPLOYEE BENEFITS PLANS

The Company employs both union and non-union employees and maintains several benefit plans.

Union

Substantially the entire workforce at AIM is subject to a union contract with the United Service Workers Union TUJAT Local 355, EIN 11-1772919 (the “Union”). The Agreement was renewed as of December 31, 2021 and expires on December 31, 2024 and covers all of AIM’s production personnel, of which there are approximately 131 people. AIM is required to make a monthly contribution to each of the Union’s United Welfare Fund and the United Services Worker’s Security Fund. This is the only pension benefit required by the Agreement and the Company is not obligated for any future defined benefit to retirees. The Agreement contains a “no-strike” clause, whereby, during the term of the Agreement, the Union will not strike and AIM will not lockout its employees. Medical benefits for union employees are provided through a policy with Insperity Services, Inc. (“Insperity”), the costs of which are substantially borne by the Company. In addition, the Company is obligated to make contributions for union dues and a security fund (defined contribution plan) for the benefit of each union employee. Contributions to the security fund amounted to $147,000 and $134,000 for the years ended December 31, 2021 and 2020, respectively.

The Company accounts for its Union retirement plan under ASU No. 2011-09, “Compensation - Retirement Benefits-Multiemployer Plans (Subtopic 715-80): Disclosures about an Employer’s Participation in a Multiemployer Plan” (“ASU 2011-09”). ASU 2011-09 requires additional disclosures about an employer’s participation in a multiemployer pension plan. ASU 2011-09 applies to nongovernmental entities that participate in multiemployer plans. The Union’s retirement plan is a defined contribution plan. As such, the Company is not responsible for the obligations of other companies in the Union’s retirement plan and no further disclosures are required.

Others

All of the Company’s employees are covered under a co-employment agreement with Insperity, a professional employer organization that provides out-sourced human resource services.

The Company has a defined contribution plans under Section 401(k) of the Internal Revenue Code (the “Plans”). Pursuant to the Plans, qualified employees may contribute a percentage of their pre-tax eligible compensation to the Plan. The Company does not match any contributions that employees may make to the Plans.

Contingencies

12 Months Ended

Dec. 31, 2021

Contingencies [Abstract]

CONTINGENCIES

Note 14. CONTINGENCIES

A number of actions have been commenced against the Company by vendors, landlords and former landlords, including a third party claim as a result of an injury suffered on a portion of a leased property not occupied by the Company. As certain of these claims represent amounts included in accounts payable they are not specifically discussed herein.

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 its subsidiary WMI, at 110 Plant Avenue, Hauppauge, New York. In the action Contract Pharmacal sought damages for an amount in excess of $1,000,000 for the Company’s failure to make the entire premises available by the Sublease commencement date. On July 8, 2021, the Court denied Contract Phamacal’s motion for summary judgement. 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. 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 which the Company will oppose. The Company disputes the validity of the claims asserted by Contract Pharmacal, continues to believe it has a meritorious defense to those claims and intends to dispute the validity of the claim asserted by Contract Pharmacal.

On December 20, 2018, the Company completed the sale of all of the outstanding shares of its subsidiary, WMI, to CPI. There ensued a dispute with CPI regarding amounts it claimed were due based upon the value it ascribed to the inventory as of the closing date. On December 23, 2020 the Company and CPI reached an agreement to settle the working capital dispute. Pursuant to the settlement, the escrow agent released to CPI the balance of $1,380,684 remaining in the escrow account which had been established at the closing and the Company and CPI exchanged mutual releases customary in the circumstances.

From time to time the Company may be engaged in various lawsuits and legal proceedings in the ordinary course of business. The Company is currently not aware of any legal proceedings the ultimate outcome of which, in its judgment based on information currently available, would have a material adverse effect on its business, financial condition or operating results. There are no proceedings in which any of the Company’s directors, officers or affiliates, or any registered or beneficial stockholder of its common stock, is an adverse party or has a material interest adverse to our interest.

Income Taxes

12 Months Ended

Dec. 31, 2021

Income Tax Disclosure [Abstract]

INCOME TAXES

Note 15. INCOME TAXES

The provision for (benefit from) income taxes as of December 31, is set forth below:

	2021		2020
Current
Federal tax refund	$	-	$	(1,416,000	)
State		-		4,000

Total (Benefit from) Expense for Income Taxes		-		(1,412,000	)

Net (Benefit from) Provision for Income Taxes	$	-	$	(1,412,000	)

The following is a reconciliation of our income tax rate computed using the federal statutory rate to our actual income tax rate as of December 31,

	2021			2020
U.S. statutory income tax rate		21.00	%		21.00	%
State taxes		5.10	%		-0.90	%
Permanent difference, over accruals, and non-deductible items		-40.40	%		159.65	%
Rate change and provision to return true-up		0.00	%		197.34	%
Expired stock options		0.00	%		0.00	%
Deferred tax valuation allowance		14.30	%		-393.63	%
Cares Act Refund		0.00	%		458.76	%
Total		0.00	%		442.22	%

The components of net deferred tax assets at December 31, 2021 and 2020 are set forth below:

	December 31,			December 31,
	2021			2020
Deferred tax assets:
Current:
Net operation loss	$	6,737,000		$	6,594,000
Allowance for doubtful accounts		155,000			252,000
Inventory - IRC 263A adjustment		394,000			341,000
Stock based compensation - options and restricted stock		393,000			277,000
Capitalized engineering costs		449,000			336,000
Amortization - NTW Transaction		442,000			495,000
Inventory reserve		824,000			1,250,000
Deferred gain on sale of real estate		47,000			132,000
Accrued Expenses		204,000			158,000
Disallowed interest		1,286,000			1,813,000
Right of Use Asset		235,000			296,000
Other		88,000			-
Total non-current deferred tax asset before valuation allowance		11,254,000			11,944,000
Valuation allowance		(9,628,000	)		(9,394,000	)
Total non-current deferred tax asset after valuation allowance		1,626,000			2,550,000

Deferred tax liabilities
Property and equipment		(1,626,000	)		(2,150,000	)
Other		-			(400,000	)
Total deferred tax liabilities		(1,626,000	)		(2,550,000	)

Net deferred tax asset	$	-		$	-

During the years ended December 31, 2021 and 2020, the Company recorded a valuation allowance equal to its net deferred tax assets. The Company determined that due to a recent history of net losses, that at this time, sufficient uncertainty exists regarding the future realization of these deferred tax assets through future taxable income. If, in the future, the Company believes that it is more likely than not that these deferred tax benefits will be realized, the valuation allowances will be reduced or eliminated. With a full valuation allowance, any change in the deferred tax asset or liability is fully offset by a corresponding change in the valuation allowance. At December 31, 2021 and 2020, the Company provided a valuation allowance on its net deferred tax assets of $9,628,000 and $9,394,000, respectively.

As of December 31, 2021, the Company had a Federal net operating loss carry forward of approximately $29,100,000, of which $22,800,000 expires in years through 2037 and $6,300,000 that do not expire.

At December 31, 2021 and 2020, the Company had no material unrecognized tax benefits and no adjustments to liabilities or operations were required. The Company does not expect that its unrecognized tax benefits will materially increase within the next twelve months. The Company recognizes interest and penalties related to uncertain tax positions in interest expense. As of December 31, 2021, and 2020, the Company has not recorded any provisions for accrued interest and penalties related to uncertain tax positions.

In certain cases, the Company’s uncertain tax positions are related to tax years that remain subject to examination by the relevant tax authorities. The Company files federal and state income tax returns in jurisdictions with varying statutes of limitations. The 2018 through 2021 tax years generally remain subject to examination by federal and state tax authorities.

As a result of the passage of the CARES Act, the Company received $1,416,000 from the filing of a net operating loss carryback claim in 2020. The Company is currently evaluating the impact of other provisions of the CARES Act on its accounting for income taxes and does not believe it has a material impact at this time.

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

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Stock Options and Warrants [Abstract]

Stock Options and Warrants

12 Months Ended

Dec. 31, 2021

STOCK OPTIONS AND WARRANTS

Note 16. STOCK OPTIONS AND WARRANTS

Stock-Based Compensation

Stock Options

In July 2017, the Board of Directors adopted the Company’s 2017 Equity Incentive Plan (“2017 Plan”) which authorized the grant of rights with respect to up to 1,200,000 shares. The 2017 Plan was approved by affirmative vote of the Company’s stockholders on October 3, 2017.

During the year ended December 31, 2021, the Company granted options to purchase 847,500 shares of common stock to certain of its employees and directors. The weighted average fair value of the granted options was estimated using the Black-Scholes option pricing model with the following assumptions: risk free interest rate of 0.35% to 0.83%; expected volatility factors of 73.2% to 75.2%; expected dividend yield of 0%; and expected life of 2.5 to 4 years.

During the year ended December 31, 2020, the Company granted options to purchase 560,000 shares of common stock to certain of its employees and directors. The weighted average fair value of the granted options was estimated using the Black-Scholes option pricing model with the following assumptions: risk free interest rate of 0.22% to 1.61%; expected volatility factors of 71.5% to 75.4%; expected dividend yield of 0%; and expected life of 2.5 to 4 years.

The Company recorded stock based compensation expense of $443,000 and $308,000 in its Consolidated Statements of Income for the years ended December 31, 2021 and 2020, respectively, and such amounts were included as a component of general and administrative expense.

The fair values of stock options granted were estimated using the Black-Sholes option-pricing model with the following assumptions for the years ended December 31:

	2021	2020
Risk-free interest rates	0.35% - 0.83%	0.22% - 1.61%
Expected life (in years)	2.50 - 4.00	2.50 - 4.00
Expected volatility	73.2% - 75.2%	71.5% - 75.4%
Dividend yield	0.00%	0.00%

Weighted-average grant date fair value per share	$0.60	$0.64

The expected life is the number of years that the Company estimates, based upon history, that the options will be outstanding prior to exercise or forfeiture. Expected life is determined using the “simplified method” permitted by Staff Accounting Bulletin No. 107. In addition to the inputs referenced above regarding the option pricing model, the Company adjusts the stock-based compensation expense for estimated forfeiture rates that are revised prospectively according to forfeiture experience. The stock volatility factor is based on the Company’s experience.

A summary of the status of the Company’s stock options as of December 31, 2021 and 2020, and changes during the two years then ended are presented below.

				Wtd. Avg.
				Exercise
	Options			Price
Balance, January 1, 2020		1,369,649		$	2.01
Granted during the year		560,000			1.20
Exercised during the year		-			-
Terminated/Expired during the year		(70,649	)		7.48
Balance, December 31, 2020		1,859,000		$	1.56
Granted during the year		847,500			1.30
Exercised during the year		(110,000	)		1.04
Terminated/Expired during the year		(128,000	)		6.17
Balance, December 31, 2021		2,468,500		$	1.25

Exercisable at December 31, 2021		1,873,496		$	1.26

The following table summarizes information about outstanding stock options at December 31, 2021:

Range of Exercise Price		Number Outstanding		Wtd. Avg, Life		Wtd. Avg. Exercise Price
$0.88 - $2.38		2,468,500		3.3 years		$1.25

The following table summarizes information about exercisable stock options at December 31, 2021:

Range of Exercise Price		Number Exercisable		Wtd. Avg, Life		Wtd. Avg. Exercise Price
$0.88 - $2.38		1,873,496		3.1 years		$1.26

As of December 31, 2021, there was $166,000 of unrecognized compensation cost related to non-vested stock option awards, which is to be recognized over the remaining weighted average vesting period of 0.7 years.

The aggregate intrinsic value at December 31, 2021 was based on the Company’s closing stock price of $0.91 was approximately $12,000. The aggregate intrinsic value was calculated based on the positive difference between the closing market price of the Company’s Common Stock and the exercise prices of the underlying options.

The weighted average fair value of options granted during the years ended December 31, 2021 and 2020 was $0.60 and $0.64 per share, respectively. The total intrinsic value of options exercised during the years ended December 31, 2021 and 2020 was $100,000 and $0, respectively. The total fair value of shares vested during the years ended December 31, 2021 and 2020 was $339,000 and $237,000, respectively.

Warrants

During both the years ended December 31, 2021 and 2020, the Company did not issue any warrants.

The following tables summarize the Company’s outstanding warrants as of December 31, 2021 and changes during the two years then ended:

						Wtd. Avg.
				Wtd. Avg.		Remaining
				Exercise		Contractual
	Warrants			Price		Life (years)
Balance, January 1, 2020		2,182,902		$	2.90		2.43
Granted during the year		-			-		-
Terminated/Expired during the year		-			-		-
Balance, December 31, 2020		2,182,902		$	2.90		1.43
Granted during the year		-			-		-
Terminated/Expired during the year		(675,691	)	$	4.47		-
Balance, December 31, 2021		1,507,211		$	2.19		0.75

Exercisable at December 31, 2021		1,507,211		$	2.19		0.75

Segment Reporting

12 Months Ended

Dec. 31, 2021

Segment Reporting [Abstract]

SEGMENT REPORTING

Note 17. SEGMENT REPORTING

In accordance with FASB ASC 280, “Segment Reporting” (“ASC 280”), the Company discloses financial and descriptive information about its reportable operating segments. Operating segments are components of an enterprise about which separate financial information is available and regularly evaluated by the chief operating decision maker in deciding how to allocate resources and in assessing performance.

The Company follows ASC 280, which establishes standards for reporting information about operating segments in annual and interim financial statements, and requires that companies report financial and descriptive information about their reportable segments based on a management approach. ASC 280 also establishes standards for related disclosures about products and services, geographic areas and major customers.

Historically the Company has operated its businesses and reported its results as two separate segments with AIM and NTW comprising the Complex Machining segment (“CMS”) and SEC as the Turbine & Engine Component segment (“TEC”). Our CMS segment specializes in flight critical components including flight controls and landing gear. The TEC segment focuses on manufacturing components for jet engines. Along with its operating subsidiaries, the Company reports the results of our corporate division as an independent segment.

In recent years the Company integrated and consolidated the business of AIM and NTW into one facility on Long Island and the operations of our CMS and TEC segments have become increasingly integrated. The Company also made significant capital expenditures and all of our operations now share the same manufacturing facilities and use most, if not all, of the same sales and marketing functions. The Company made these changes to take advantage of the long-term growth opportunities we see in the A&D market. In early fiscal 2022, the Company further changed our management approach and will now make decisions about resources to be allocated and assessing performance based on one integrated business rather than two reporting segments. As such, effective with the first quarter ending March 31, 2022, the Company will present its operations as one reportable operating segment.

The accounting policies of each of the segments are the same as those described in Note 3 – Summary of Significant Accounting Policies. Intersegment transfers are recorded at the transferors’ cost, and there is no intercompany profit or loss on intersegment transfers. We evaluate performance based on revenue, gross profit contribution and assets employed.

Financial information about the Company’s reporting segments for the years ended December 31, 2021 and 2020 are as follows:

	Year Ended December 31,
	2021			2020
COMPLEX MACHINING
Net Sales	$	52,921,000		$	44,659,000
Gross Profit		9,780,000			6,493,000
Income before benefit from income taxes		7,146,000			4,965,000
Assets		49,691,000			51,368,000

TURBINE ENGINE COMPONENTS
Net Sales		6,018,000			5,438,000
Gross Profit		473,000			19,000
Loss before benefit from income taxes		(229,000	)		(31,000	)
Assets		3,275,000			3,899,000

CORPORATE
Net Sales		-			-
Gross Profit		-			-
Loss before benefit from income taxes		(5,290,000	)		(5,020,000	)
Assets		459,000			2,510,000

CONSOLIDATED
Net Sales		58,939,000			50,097,000
Gross Profit		10,253,000			6,512,000
Income (Loss) before benefit from income taxes		1,627,000			(86,000	)
Benefit from Income Taxes		-			(1,412,000	)
Loss from Discontinued Operations, net of taxes		-			(230,000	)
Net Income		1,627,000			1,096,000
Assets	$	53,425,000		$	57,777,000

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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Accounting Policies, by Policy (Policies)

12 Months Ended

Dec. 31, 2021

Principal Business Activity

Principal Business Activity

Principles of Consolidation

Principles of Consolidation

Cash and Cash Equivalents

Cash and Cash Equivalents

Cash and cash equivalents include all highly liquid instruments with an original maturity of three months or less.

Accounts Receivable

Accounts Receivable

Inventory Valuation

Inventory Valuation

The Company values inventory at the lower of cost on a first-in-first-out basis or an estimated net realizable value.

Prepaid Expenses and Other Current Assets

Prepaid Expenses and Other Current Assets

Description	Balance at Beginning of Year		Charges to Loss on Sale of Subsidiary		Deductions			Balance at end of year
Valuation reserve deducted from Prepaid Expenses and Other Current Assets:
Year ended December 31, 2020	$	1,770,000	$	-	$	(1,770,000	)	$	-

Property and Equipment

Property and Equipment

Long-Lived and Intangible Assets

Long-Lived and Intangible Assets

Identifiable intangible assets are amortized using the straight-line method over the period of expected benefit.

Deferred Financing Costs

Deferred Financing Costs

Revenue Recognition

Revenue Recognition

Use of Estimates

Use of Estimates

Credit and Concentration Risks

Credit and Concentration Risks

A large percentage of the Company’s revenues are derived from a small number of customers for U.S. Military Aviation.

	Percentage of Sales
Customer	2021			2020

1		37.2	%		30.4	%
2		25.7	%		30.3	%
3		12.5	%		13.2	%

There were three customers that represented 74.7% of gross accounts receivable and 80.3% of gross accounts receivable at December 31, 2021 and 2020, respectively.

Cash and Cash equivalents

Cash and Cash equivalents

During the year, the Company had occasionally maintained balances in its bank accounts that were in excess of the FDIC limit. The Company has not experienced any losses on these accounts.

Major Suppliers

Major Suppliers

Income Taxes

Income Taxes

Earnings per share

Earnings per share

Basic earnings per share (“EPS”) is computed by dividing the net income applicable to common stockholders by the weighted-average number of shares of common stock outstanding for the period.

The following is the calculation of income from continuing operations applicable to common stockholders utilized to calculate the numerator for EPS:

	2021		2020
Income from continuing operations - Basic	$	1,627,000	$	1,326,000
Add: Convertible Note Interest for Potential Note Conversion		322,000		499,000
Add: Convertible Note debt discount for Potential Note Conversion		-		149,000

Income from continuing operations used to calculate earnings per share - Diluted	$	1,949,000	$	1,974,000

The following is a reconciliation of the denominators of basic and diluted EPS computations for continuing operations:

	2021		2020
Weighted average shares outstanding used to compute basic
earnings per share		32,049,372		30,742,154
Effect of dilutive stock options and warrants		317,371		1,590,000
Effect of dilutive convertible notes payable		4,057,432		4,414,929
Weighted average shares outstanding and dilutive securities used to compute dilutive earnings per share		36,424,175		36,747,083

Per share amount - basic	$	0.05	$	0.04
Per share amount - diluted	$	0.05	$	0.05

The following securities have been excluded from the calculation as the exercise price was greater than the average market price of the common shares:

Stock-Based Compensation

Stock-Based Compensation

Goodwill

Goodwill

The Company determined that there has been no impairment of goodwill at December 31, 2021 and 2020.

Freight Out

Freight Out

Freight out is included in operating expenses and amounted to $135,000 and $91,000 for the years ended December 31, 2021 and 2020, respectively.

Recently Issued Accounting Pronouncements

Recently Issued Accounting Pronouncements

Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2021

Schedule of Valuation reserve deducted from prepaid expenses and other current assets

Description	Balance at Beginning of Year		Charges to Loss on Sale of Subsidiary		Deductions			Balance at end of year
Valuation reserve deducted from Prepaid Expenses and Other Current Assets:
Year ended December 31, 2020	$	1,770,000	$	-	$	(1,770,000	)	$	-

Schedule of credit and concentration risks

	Percentage of Sales
Customer	2021			2020

1		37.2	%		30.4	%
2		25.7	%		30.3	%
3		12.5	%		13.2	%

	Percentage of Receivables
	December			December
Customer	2021			2020
1		50.3	%		57.1	%
2		12.7	%		12.0	%
3		11.7	%		11.2	%

Schedule of calculation of net income (loss)

	2021		2020
Income from continuing operations - Basic	$	1,627,000	$	1,326,000
Add: Convertible Note Interest for Potential Note Conversion		322,000		499,000
Add: Convertible Note debt discount for Potential Note Conversion		-		149,000

Income from continuing operations used to calculate earnings per share - Diluted	$	1,949,000	$	1,974,000

Schedule of basic and diluted earnings per share

	2021		2020
Weighted average shares outstanding used to compute basic
earnings per share		32,049,372		30,742,154
Effect of dilutive stock options and warrants		317,371		1,590,000
Effect of dilutive convertible notes payable		4,057,432		4,414,929
Weighted average shares outstanding and dilutive securities used to compute dilutive earnings per share		36,424,175		36,747,083

Per share amount - basic	$	0.05	$	0.04
Per share amount - diluted	$	0.05	$	0.05

Schedule of anti-dilutive securities

	2021		2020

Stock Options		1,183,500		549,000
Warrants		1,227,211		1,909,902
		2,410,711		2,458,902

Accounts Receivable (Tables)

12 Months Ended

Dec. 31, 2021

Receivables [Abstract]

Schedule of accounts receivable

	December 31, 2021			December 31, 2020

Accounts Receivable Gross	$	11,067,000		$	9,762,000
Allowance for Doubtful Accounts		(594,000	)		(964,000	)
Accounts Receivable Net	$	10,473,000		$	8,798,000

Schedule of allowance for doubtful accounts

	Balance at Beginning of Year		Charged to Costs and Expenses		Deductions from Reserves		Balance at End of Year
Year ended December 31, 2021 Allowance for Doubtful Accounts	$	964,000	$	134,000	$	504,000	$	594,000
Year ended December 31, 2020 Allowance for Doubtful Accounts	$	859,000	$	483,000	$	378,000	$	964,000

Inventory (Tables)

12 Months Ended

Dec. 31, 2021

Inventory Disclosure [Abstract]

Schedule of inventory

	December 31,			December 31,
	2021			2020

Raw Materials	$	3,410,000		$	3,951,000
Work In Progress		20,926,000			21,933,000
Finished Goods		8,350,000			8,831,000
Reserve		(3,154,000	)		(2,595,000	)
Total Inventory	$	29,532,000		$	32,120,000

Property and Equipment (Tables)

12 Months Ended

Dec. 31, 2021

Property, Plant and Equipment [Abstract]

Schedule of property and equipment

	December 31,			December 31,
	2021			2020

Land	$	300,000		$	300,000
Buildings and Improvements		1,723,000			1,683,000
Machinery and Equipment		22,013,000			21,738,000
Finance Lease Machinery and Equipment		375,000			78,000
Tools and Instruments		12,866,000			12,116,000
Automotive Equipment		200,000			148,000
Furniture and Fixtures		290,000			290,000
Leasehold Improvements		882,000			855,000
Computers and Software		583,000			436,000
Total Property and Equipment		39,232,000			37,644,000
Less: Accumulated Depreciation		(30,828,000	)		(28,063,000	)
Property and Equipment, net	$	8,404,000		$	9,581,000

Accounts Payable and Accrued Expenses (Tables)

12 Months Ended

Dec. 31, 2021

Payables and Accruals [Abstract]

Schedule of accounts payable

	December 31, 2021		December 31, 2020

Accounts Payable	$	5,460,000	$	7,240,000
Accrued Payroll		852,000		663,000
Accrued Interest - related parties		-		400,000
Accrued Interest - others		-		42,000
Accrued expenses - other		411,000		337,000
Accounts Payable and accrued expenses	$	6,723,000	$	8,682,000

Notes Payable, Related Party Notes Payable and Finance Lease Obligations (Tables)

12 Months Ended

Dec. 31, 2021

Debt Disclosure [Abstract]

Schedule of notes payable, related party notes payable and finance lease obligations

	December 31,			December 31,
	2021			2020

Revolving credit note payable to Webster Bank (F/K/A Sterling National Bank) (“Webster”)	$	12,456,000		$	15,649,000
Term loan, Webster		4,192,000			5,558,000
Finance lease obligations		263,000			6,000
Loans Payable - financed assets		39,000			48,000
Related party notes payable		6,412,000			6,012,000
Subtotal		23,362,000			27,273,000
Less: Current portion of notes payable, related party notes payable and finance lease obligations		(14,112,000	)		(16,475,000	)
Notes payable, related party notes payable and finance lease obligations, net of current portion	$	9,250,000		$	10,798,000

Schedule of payments for the term note

For the year ending	Amount
December 31, 2022	$	1,599,000
December 31, 2023		812,000
December 31, 2024		812,000
December 31, 2025		969,000
Webster Term Loan payable		4,192,000
Less: debt issuance costs		(54,000	)
Total Webster Term Loan payable, net of debt issuance costs		4,138,000
Less: Current portion of Webster Term Loan payable		(1,599,000	)
Total long-term portion of Webster Term Loan payable	$	2,539,000

Schedule of future minimum lease payments

For the year ending	Amount
December 31, 2022	$	58,000
December 31, 2023		58,000
December 31, 2024		58,000
December 31, 2025		58,000
December 31, 2026		59,000
Total future minimum finance lease payments		291,000
Less: imputed interest		(29,000	)
Less: Current portion		(48,000	)
Long-term portion	$	214,000

Schedule of annual maturities of this loan

For the year ending	Amount
December 31, 2022	$	9,000
December 31, 2023		9,000
December 31, 2024		9,000
December 31, 2025		9,000
Thereafter		3,000
Loans Payable - financed assets		39,000
Less: Current portion		(9,000	)
Long-term portion	$	30,000

Schedule of subordinated principal balance of the notes

	Michael Taglich,		Robert Taglich,		Taglich Brothers,
	Chairman		Director		Inc.		Total
Convertible Subordinated Notes	$	2,666,000	$	1,905,000	$	241,000	$	4,812,000
Subordinated Notes		1,250,000		350,000		-		1,600,000
Total	$	3,916,000	$	2,255,000	$	241,000	$	6,412,000

Tabular disclosure of long-debt instruments or arrangements, including identification, terms, features, collateral requirements and other information necessary to a fair presentation. These are debt arrangements that originally required repayment more than twelve months after issuance or greater than the normal operating cycle of the entity, if longer.

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Schedule of components of lease costs, lease term and discount rate

Operating Lease Liabilities (Tables)

12 Months Ended

Dec. 31, 2021

Disclosure Text Block [Abstract]

	December 31,			December 31,
	2021			2020
Weighted Average Remaining Lease Term - in years		4.53			5.53
Weighted Average discount rate - %		8.89	%		8.89	%

Schedule of aggregate undiscounted cash flows of operating lease payments

	Amount
December 31, 2022	$	1,007,000
December 31, 2023		1,038,000
December 31, 2024		1,070,000
December 31, 2025		992,000
December 31, 2026		730,000
Total future minimum lease payments		4,837,000
Less: discount		(910,000	)
Total operating lease maturities		3,927,000
Less: current portion of operating lease liabilities		(686,000	)
Total long term portion of operating lease maturities	$	3,241,000

Liability Related to the Sale of Future Proceeds from Disposition of Subsidiary (Tables)

12 Months Ended

Dec. 31, 2021

Schedule of activity within the liability account

	December 31, 2021			December 31, 2020
Liabilities related to sale of future proceeds from disposition of subsidiaries - beginning balance	$	322,000		$	602,000
Non-Cash other income recognized		(360,000	)		(402,000	)
Non-Cash interest expense recognized		97,000			122,000
Liabilities related to sale of future proceeds from disposition of subsidiary - ending balance		59,000			322,000
Less: unamortized transaction costs		(3,000	)		(3,000	)
Liability related to sale of future proceeds from disposition of subsidiary, net	$	56,000		$	319,000

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2021

Income Tax Disclosure [Abstract]

Schedule of provision for (benefit from) income taxes

	2021		2020
Current
Federal tax refund	$	-	$	(1,416,000	)
State		-		4,000

Total (Benefit from) Expense for Income Taxes		-		(1,412,000	)

Net (Benefit from) Provision for Income Taxes	$	-	$	(1,412,000	)

Schedule of reconciliation of our income tax rate computed using the federal statutory rate to our actual income tax rate

	2021			2020
U.S. statutory income tax rate		21.00	%		21.00	%
State taxes		5.10	%		-0.90	%
Permanent difference, over accruals, and non-deductible items		-40.40	%		159.65	%
Rate change and provision to return true-up		0.00	%		197.34	%
Expired stock options		0.00	%		0.00	%
Deferred tax valuation allowance		14.30	%		-393.63	%
Cares Act Refund		0.00	%		458.76	%
Total		0.00	%		442.22	%

Schedule of net deferred tax assets

	December 31,			December 31,
	2021			2020
Deferred tax assets:
Current:
Net operation loss	$	6,737,000		$	6,594,000
Allowance for doubtful accounts		155,000			252,000
Inventory - IRC 263A adjustment		394,000			341,000
Stock based compensation - options and restricted stock		393,000			277,000
Capitalized engineering costs		449,000			336,000
Amortization - NTW Transaction		442,000			495,000
Inventory reserve		824,000			1,250,000
Deferred gain on sale of real estate		47,000			132,000
Accrued Expenses		204,000			158,000
Disallowed interest		1,286,000			1,813,000
Right of Use Asset		235,000			296,000
Other		88,000			-
Total non-current deferred tax asset before valuation allowance		11,254,000			11,944,000
Valuation allowance		(9,628,000	)		(9,394,000	)
Total non-current deferred tax asset after valuation allowance		1,626,000			2,550,000

Deferred tax liabilities
Property and equipment		(1,626,000	)		(2,150,000	)
Other		-			(400,000	)
Total deferred tax liabilities		(1,626,000	)		(2,550,000	)

Net deferred tax asset	$	-		$	-

Stock Options and Warrants (Tables)

12 Months Ended

Dec. 31, 2021

Stock Options and Warrants [Abstract]

Schedule of fair values of stock options granted

	2021	2020
Risk-free interest rates	0.35% - 0.83%	0.22% - 1.61%
Expected life (in years)	2.50 - 4.00	2.50 - 4.00
Expected volatility	73.2% - 75.2%	71.5% - 75.4%
Dividend yield	0.00%	0.00%

Weighted-average grant date fair value per share	$0.60	$0.64

Schedule of company's stock options

				Wtd. Avg.
				Exercise
	Options			Price
Balance, January 1, 2020		1,369,649		$	2.01
Granted during the year		560,000			1.20
Exercised during the year		-			-
Terminated/Expired during the year		(70,649	)		7.48
Balance, December 31, 2020		1,859,000		$	1.56
Granted during the year		847,500			1.30
Exercised during the year		(110,000	)		1.04
Terminated/Expired during the year		(128,000	)		6.17
Balance, December 31, 2021		2,468,500		$	1.25

Exercisable at December 31, 2021		1,873,496		$	1.26

						Wtd. Avg.
				Wtd. Avg.		Remaining
				Exercise		Contractual
	Warrants			Price		Life (years)
Balance, January 1, 2020		2,182,902		$	2.90		2.43
Granted during the year		-			-		-
Terminated/Expired during the year		-			-		-
Balance, December 31, 2020		2,182,902		$	2.90		1.43
Granted during the year		-			-		-
Terminated/Expired during the year		(675,691	)	$	4.47		-
Balance, December 31, 2021		1,507,211		$	2.19		0.75

Exercisable at December 31, 2021		1,507,211		$	2.19		0.75

Schedule of stock options

Range of Exercise Price		Number Outstanding		Wtd. Avg, Life		Wtd. Avg. Exercise Price
$0.88 - $2.38		2,468,500		3.3 years		$1.25

Range of Exercise Price		Number Exercisable		Wtd. Avg, Life		Wtd. Avg. Exercise Price
$0.88 - $2.38		1,873,496		3.1 years		$1.26

Segment Reporting (Tables)

12 Months Ended

Dec. 31, 2021

Segment Reporting [Abstract]

Schedule of reporting segments

	Year Ended December 31,
	2021			2020
COMPLEX MACHINING
Net Sales	$	52,921,000		$	44,659,000
Gross Profit		9,780,000			6,493,000
Income before benefit from income taxes		7,146,000			4,965,000
Assets		49,691,000			51,368,000

TURBINE ENGINE COMPONENTS
Net Sales		6,018,000			5,438,000
Gross Profit		473,000			19,000
Loss before benefit from income taxes		(229,000	)		(31,000	)
Assets		3,275,000			3,899,000

CORPORATE
Net Sales		-			-
Gross Profit		-			-
Loss before benefit from income taxes		(5,290,000	)		(5,020,000	)
Assets		459,000			2,510,000

CONSOLIDATED
Net Sales		58,939,000			50,097,000
Gross Profit		10,253,000			6,512,000
Income (Loss) before benefit from income taxes		1,627,000			(86,000	)
Benefit from Income Taxes		-			(1,412,000	)
Loss from Discontinued Operations, net of taxes		-			(230,000	)
Net Income		1,627,000			1,096,000
Assets	$	53,425,000		$	57,777,000

Formation and Basis of Presentation (Details)	12 Months Ended
Formation and Basis of Presentation (Details)	Dec. 31, 2021 USD ($)
Accounting Policies [Abstract]
Operating activities	$ 4,064,000
Generating operating activities	4,064,000
Generating operating income	$ 2,487,000

Discontinued Operations (Details) - USD ($)	12 Months Ended
Discontinued Operations (Details) - USD ($)	Dec. 31, 2021	Dec. 31, 2020	Dec. 23, 2020
Discontinued Operations (Details) [Line Items]
Balance of escrow account	$ 1,380,684	$ 2,000,000
Escrow reverse		1,770,000
Discontinued operations		$ (230,000)
CPI [Member]
Discontinued Operations (Details) [Line Items]
Balance of escrow account			$ 1,380,684

Amount after tax of income (loss) from a discontinued operation including the portion attributable to the noncontrolling interest. Includes, but is not limited to, the income (loss) from operations during the phase-out period, gain (loss) on disposal, gain (loss) for reversal of write-down (write-down) to fair value, less cost to sell, and adjustments to a prior period gain (loss) on disposal.

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Summary of Significant Accounting Policies (Details)	12 Months Ended
Summary of Significant Accounting Policies (Details)	Dec. 31, 2021 USD ($)	Dec. 31, 2020 USD ($)
Summary of Significant Accounting Policies (Details) [Line Items]
Balance of escrow account	$ 1,380,684	$ 2,000,000
Expenditures for repairs and improvements	10,000
Stock-based compensation	443,000	308,000
Goodwill	163,000	163,000
Freight out	$ 135,000	$ 91,000
Percentage of sales [Member]
Summary of Significant Accounting Policies (Details) [Line Items]
Number of customers	3	3
ConcentrationRiskPercentage	75.40%	73.90%
Accounts Receivable [Member]
Summary of Significant Accounting Policies (Details) [Line Items]
Number of customers	3	3
ConcentrationRiskPercentage	74.70%	80.30%
Director [Member]
Summary of Significant Accounting Policies (Details) [Line Items]
Stock-based compensation	$ 210,000	$ 211,000

Summary of Significant Accounting Policies (Details) - Schedule of Valuation reserve deducted from prepaid expenses and other current assets	12 Months Ended
	Dec. 31, 2020 USD ($)
Schedule of Valuation reserve deducted from prepaid expenses and other current assets [Abstract]
Balance at Beginning of Year	$ 1,770,000
Charges to Loss on Sale of Subsidiary
Deductions	(1,770,000)
Balance at end of year

Summary of Significant Accounting Policies (Details) - Schedule of credit and concentration risks	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Customer One [Member] \| Percentage of Sales [Member]
Concentration Risk [Line Items]
Percentage of Sales	37.20%	30.40%
Customer One [Member] \| Percentage of Receivables [Member]
Concentration Risk [Line Items]
Percentage of Sales	50.30%	57.10%
Customers Two [Member] \| Percentage of Sales [Member]
Concentration Risk [Line Items]
Percentage of Sales	25.70%	30.30%
Customers Two [Member] \| Percentage of Receivables [Member]
Concentration Risk [Line Items]
Percentage of Sales	12.70%	12.00%
Customers Three [Member] \| Percentage of Sales [Member]
Concentration Risk [Line Items]
Percentage of Sales	12.50%	13.20%
Customers Three [Member] \| Percentage of Receivables [Member]
Concentration Risk [Line Items]
Percentage of Sales	11.70%	11.20%

Summary of Significant Accounting Policies (Details) - Schedule of calculation of net income (loss) - USD ($)	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Schedule of calculation of net income (loss) [Abstract]
Income from continuing operations - Basic	$ 1,627,000	$ 1,326,000
Add: Convertible Note Interest for Potential Note Conversion	322,000	499,000
Add: Convertible Note debt discount for Potential Note Conversion		149,000
Income from continuing operations used to calculate earnings per share - Diluted	$ 1,949,000	$ 1,974,000

Amount, after deduction of tax, noncontrolling interests, dividends on preferred stock and participating securities; of income (loss) available to common shareholders.

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Summary of Significant Accounting Policies (Details) - Schedule of basic and diluted earnings per share - $ / shares	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Schedule of basic and diluted earnings per share [Abstract]
Weighted average shares outstanding used to compute basic earnings per share	32,049,372	30,742,154
Effect of dilutive stock options and warrants	317,371	1,590,000
Effect of dilutive convertible notes payable	4,057,432	4,414,929
Weighted average shares outstanding and dilutive securities used to compute dilutive earnings per share	36,424,175	36,747,083
Per share amount - basic (in Dollars per share)	$ 0.05	$ 0.04
Per share amount - diluted (in Dollars per share)	$ 0.05	$ 0.05

The amount of net income (loss) for the period per each share of common stock or unit outstanding during the reporting period.

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