Air Industries (AIRI) 10-Q 15 Aug 18 2018 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2018	Jul. 31, 2018
Document and Entity Information [Abstract]
Entity Registrant Name	AIR INDUSTRIES GROUP
Entity Central Index Key	1,009,891
Trading Symbol	AIRI
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Document Type	10-Q
Document Period End Date	Jun. 30, 2018
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2,018
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		26,427,594

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($)	Jun. 30, 2018	Dec. 31, 2017
Current Assets
Cash and Cash Equivalents	$ 405,000	$ 630,000
Accounts Receivable, Net of Allowance for Doubtful Accounts of $656,000 and $560,000, respectively	9,863,000	7,681,000
Inventory	39,045,000	39,205,000
Prepaid Expenses and Other Current Assets	414,000	332,000
Prepaid Taxes	49,000	49,000
Total Current Assets	49,776,000	47,897,000
Property and Equipment, Net	9,996,000	10,928,000
Capitalized Engineering Costs - Net of Accumulated Amortization of $5,692,000 and $5,380,000, respectively	2,193,000	2,188,000
Deferred Financing Costs, Net, Deposits and Other Assets	1,165,000	1,032,000
Intangible Assets, Net
Goodwill	272,000	272,000
TOTAL ASSETS	63,402,000	62,317,000
Current Liabilities
Notes Payable and Capitalized Lease Obligations - Current Portion	25,432,000	23,143,000
Notes Payable - Related Party - Current Portion	1,242,000	262,000
Accounts Payable and Accrued Expenses	12,858,000	14,571,000
Deferred Gain on Sale - Current Portion	38,000	38,000
Deferred Revenue	929,000	1,452,000
Income Taxes Payable	20,000	20,000
Total Current Liabilities	40,519,000	39,486,000
Long Term Liabilities
Notes Payable and Capitalized Lease Obligations - Net of Current Portion	1,237,000	1,798,000
Notes Payable - Related Party - Net of Current Portion	1,783,000	1,650,000
Deferred Gain on Sale - Net of Current Portion	276,000	295,000
Deferred Rent	1,325,000	1,322,000
TOTAL LIABILITIES	45,140,000	44,551,000
Commitments and Contingencies
Stockholders' Equity
Preferred Stock, par value $.001 - Authorized 3,000,000 shares, outstanding: 0 at June 30, 2018 and December 31, 2017.
Common Stock - Par Value $.001 - Authorized 50,000,000 Shares, 26,427,594 and 25,213,805 Shares Issued and Outstanding as of June 30, 2018 and December 31, 2017, respectively	26,000	25,000
Additional Paid-In Capital	73,050,000	71,272,000
Accumulated Deficit	(54,814,000)	(53,531,000)
TOTAL STOCKHOLDERS' EQUITY	18,262,000	17,766,000
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 63,402,000	$ 62,317,000

Condensed Consolidated Balance3

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($)	Jun. 30, 2018	Dec. 31, 2017
Statement of Financial Position [Abstract]
Allowance for Doubtful Accounts	$ 656,000	$ 560,000
Accumulated Amortization	$ 5,692,000	$ 5,380,000
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	3,000,000	3,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	50,000,000	50,000,000
Common stock, shares issued	26,427,594	25,213,805
Common stock, shares outstanding	26,427,594	25,213,805

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Income Statement [Abstract]
Net Sales	$ 15,817,000	$ 17,084,000	$ 30,602,000	$ 33,237,000
Cost of Sales	13,506,000	14,165,000	25,900,000	27,616,000
Gross Profit	2,311,000	2,919,000	4,702,000	5,621,000
Operating expenses	(2,901,000)	(4,117,000)	(5,998,000)	(7,338,000)
Gain on Change to Plan to Assets Held for Sale	1,563,000		1,563,000
Income (loss) from Operations	973,000	(1,198,000)	267,000	(1,717,000)
Interest and Financing Costs	(861,000)	(875,000)	(1,638,000)	(1,768,000)
Gain (loss) on Sale of Subsidiary		(163,000)		288,000
Other Income (Expense), Net	73,000	65,000	90,000	(128,000)
Income (loss) before Income Taxes	185,000	(2,171,000)	(1,281,000)	(3,325,000)
(Benefit from) Provision for Income Taxes		(199,000)	2,000	(199,000)
Net Income (loss)	185,000	(1,972,000)	(1,283,000)	(3,126,000)
Less: Cumulative preferred stock dividends		(764,000)		(764,000)
Net Income (loss) attributable to common stockholders	$ 185,000	$ (2,736,000)	$ (1,283,000)	$ (3,890,000)
Net Income (loss) per Share - Basic	$ 0.01	$ (0.36)	$ (0.05)	$ (0.51)
Net Income (loss) per Share	$ 0.01	$ (0.36)	$ (0.05)	$ (0.51)
Weighted average shares outstanding - Basic	26,013,426	7,650,165	26,057,062	7,650,165
Weighted average shares outstanding- Diluted	26,079,377	7,650,165	26,057,062	7,650,165

Condensed Consolidated Stateme5

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss	$ (1,283,000)	$ (3,126,000)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation of property and equipment	1,444,000	1,442,000
Amortization of intangible assets		581,000
Amortization of capitalized engineering costs	312,000	168,000
Bad debt expense (recovery)	137,000	(10,000)
Non-cash employee compensation expense/(forfeiture of unamortized stock compensation)	225,000	(73,000)
Amortization of deferred financing costs	69,000	114,000
Deferred gain on sale of real estate	(19,000)	(19,000)
Gain on sale of subsidiary		(288,000)
Gain on change to plan of assets held for sale	(1,563,000)
Amortization of debt discount on convertible notes payable	588,000	603,000
Changes in Assets and Liabilities (Increase) Decrease in Operating Assets:
Accounts receivable	(2,319,000)	(1,846,000)
Inventory	160,000	262,000
Prepaid expenses and other current assets	(82,000)	126,000
Prepaid taxes		360,000
Deposits and other assets	(202,000)	(323,000)
Increase (Decrease) in Operating Liabilities:
Accounts payable and accrued expense	(21,000)	(1,141,000)
Deferred rent	3,000	17,000
Deferred revenue	(523,000)	(243,000)
NET CASH USED IN OPERATING ACTIVITIES	(3,074,000)	(3,396,000)
CASH FLOWS FROM INVESTING ACTIVITIES
Capitalized engineering costs	(317,000)	(483,000)
Purchase of property and equipment	(512,000)	(298,000)
Proceeds from sale of subsidiary		4,260,000
NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES	(829,000)	3,479,000
CASH FLOWS FROM FINANCING ACTIVITIES
Note payable - revolver - net	2,798,000	(4,589,000)
Payments of note payable - term notes	(739,000)	(2,439,000)
Proceeds from issuance of common stock	1,425,000
Payments of capital lease obligations	(646,000)	(620,000)
Proceeds from notes payable issuances- related party	770,000	2,553,000
Deferred financing costs		(50,000)
Proceeds from notes payable issuances - third party	70,000	4,184,000
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES	3,678,000	(961,000)
NET DECREASE IN CASH AND CASH EQUIVALENTS	(225,000)	(878,000)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR	630,000	1,304,000
CASH AND CASH EQUIVALENTS AT END OF PERIOD	405,000	426,000
Supplemental cash flow information
Cash paid during the period for interest	840,000	992,000
Cash paid during the period for income taxes	2,000
Supplemental schedule of non-cash investing and financing activities
Issuance of notes payable - related party	34,000
Issuance of Convertible notes payable - related party		$ 1,885,000

Formation and Basis of Presenta

Formation and Basis of Presentation	6 Months Ended
	Jun. 30, 2018
Formation and Basis of Presentation [Abstract]
FORMATION AND BASIS OF PRESENTATION	Note 1. FORMATION AND BASIS OF PRESENTATION Organization On August 30, 2013, Air Industries Group, Inc. (“Air Industries Delaware”) changed its state of incorporation from Delaware to Nevada as a result of a merger with and into its newly formed wholly-owned subsidiary, Air Industries Group, a Nevada corporation (“Air Industries Nevada” or “AIRI”) and the surviving entity, pursuant to an Agreement and Plan of Merger. The reincorporation was approved by the stockholders of Air Industries Delaware at its 2013 Annual Meeting of Stockholders. Air Industries Nevada is deemed to be the successor. The accompanying consolidated financial statements presented are those of AIRI, and its wholly-owned subsidiaries; (collectively, “the Company”) Air Industries Machining Corp. (“AIM”), Welding Metallurgy, Inc. ("WMI" or “Welding”), Miller Stuart, Inc. (“Miller Stuart”), Nassau Tool Works, Inc. (“NTW”), Woodbine Products, Inc. (“Woodbine” or “WPI”), Decimal Industries, Inc. ("Decimal"), Eur-Pac Corporation (“Eur-Pac” or “EPC”), Electronic Connection Corporation (“ECC”), AMK Welding, Inc. (“AMK”), Air Realty Group, LLC ("Air Realty") The Sterling Engineering Corporation ("Sterling"), and Compac Development Corporation (“Compac”). Going Concern The Company incurred income (loss) from operations of $1,274,000 and ($12,758,000) and net (losses) of ($276,000) and ($22,551,000) for the six months ended June 30, 2018 and the year ended December 31, 2017, respectively. The Company also had negative cash flows from operations for the six months ended June 30, 2018 and for the years ended December 31, 2017 and 2016. In 2016, the Company disposed of the real estate on which an operating subsidiary was located through a sale leaseback transaction. Since January 1, 2016, the Company has sold in excess of $31,000,000 in debt and equity securities to fund its operations. In January 2017, the Company sold one of its operating subsidiaries, AMK Welding Inc. Furthermore, at December 31, 2017, the Company was not in compliance with financial covenants under its Amended and Restated Revolving Credit, Term Loan and Security Agreement with PNC Bank (the “Loan Facility”). On May 30, 2018 the Company entered into a Sixteenth Amendment of its Loan Agreement with PNC Bank which provided for an extension of the Loan Facility to December 31, 2018 and that, among other things, waived the covenant violation at December 31, 2017 and March 31, 2018 and instituted new Covenants. The Company is in compliance with these covenants at March 31, 2018 and June 30, 2018. The continuation of the Company’s business is dependent upon its ability to achieve profitability and positive cash flow and, pending such achievement, future issuances of equity or other financing to fund ongoing operations. The consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. Basis of Presentation The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles for interim financial information and with Rule 8-03 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the six months ended June 30, 2018 are not necessarily indicative of the results that may be expected for the year ending December 31, 2018. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017, as filed with the Securities and Exchange Commission. Reclassifications Certain account balances in 2017 have been reclassified to conform to the current period presentation. Sale of AMK On January 27, 2017, the Company sold all of the outstanding shares of AMK to Meyer Tool, Inc., pursuant to a Stock Purchase Agreement dated January 27, 2017 for a purchase price of $4,500,000, net of a working capital adjustment of ($163,000), plus additional quarterly payments, not to exceed $ 1,500,000, equal to five percent (5%) of Net Revenues of AMK commencing April 1, 2017. The Company recorded a $200,000 gain on the sale of AMK. The gain on sale was the difference between the non-contingent payments and the carrying value of the disposed business. The Company has made an accounting policy decision to record the contingent consideration as it is determined to be realizable. The proceeds of the sale of AMK were applied as follows: $1,700,000 to the payment of the Term Loan (as defined in the PNC Loan Agreement), $1,800,000 to the payment of outstanding Revolving Advances (as defined in the PNC Loan Agreement), and $500,000 to the payment of existing accounts payable. The remaining $500,000 was applied to outstanding accounts payable and reduced the amount of the Revolving Advance. Terminated Sale of Welding Metallurgy Inc. In June 2018, the Company terminated its previously announced sale of WMI and its wholly owned subsidiaries Miller Stuart, Woodbine, Decimal and Compac Development Corp (“WMI Group”) to CPI Aerostructures Inc (“CPI”). The Company has also determined that WMI Group will not be held for sale, but rather held as a continuing operation. The Company has reclassified WMI Group operations from discontinued operations to continuing operations for the three and six months ended June 30, 2018. Subsequent Events Management has evaluated subsequent events through the date of this filing.

Summary of Significant Accounti

Summary of Significant Accounting Policies	6 Months Ended
	Jun. 30, 2018
Accounting Policies [Abstract]
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	Note 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principal Business Activity The Company through its AIM subsidiary is primarily engaged in manufacturing aircraft structural parts, and assemblies for prime defense contractors in the aerospace industry in the United States. NTW is a manufacturer of aerospace components, principally landing gear for F-16 and F-18 fighter aircraft. Welding Metallurgy is a specialty welding and products provider whose significant customers include the world's largest aircraft manufacturers, subcontractors, and original equipment manufacturers. Miller Stuart is a manufacturer of aerospace components whose customers include major aircraft manufacturers and the US Military. Miller Stuart specializes in electromechanical systems, harness and cable assemblies, electronic equipment and printed circuit boards. Woodbine is a manufacturer of aerospace components whose customers include major aircraft component suppliers. Eur-Pac specializes in military packaging and supplies. Eur-Pac’s primary business is “kitting” of supplies for all branches of the United States Defense Department including ordnance parts, hose assemblies, hydraulic, mechanical and electrical assemblies. Compac specializes in the manufacture of RFI/EMI (Radio Frequency Interference Electro-Magnetic Interference) shielded enclosures for electronic components. The Company’s customers consist mainly of publicly traded companies in the aerospace industry. Assets Held for Sale The Company classifies assets as held for sale and suspends depreciation and amortization when approval at the appropriate level has been provided, the assets can be immediately removed from operations, an active program has begun to locate a buyer, the assets are being actively marketed for sale at or near their current fair value, significant changes to the plan of sale are not likely and the sale is probable within one year. Upon classification as held for sale, long-lived assets are no longer depreciated, and an assessment of impairment is performed to identify and expense any excess of carrying value over fair value less costs to sell. Subsequent changes to the estimated fair value less costs to sell will impact the measurement of assets held for sale. To the extent fair value increases, any impairment previously recorded is reversed. If the carrying value of the assets held for sale exceeds the fair value less costs to sell, the Company will record a loss for the amount of the excess. If the Company decides not to sell previously classified assets held for sale, the asset is reclassified back to their original asset group in the period that it’s determined to no longer be held for sale. The assets are recorded at the lower of the carrying value before being classified as held for sale adjusted for depreciation that would have been recognized during the time they were classified as held for sale or fair value at the date the Company decided not to sell. As of December 31, 2017 the Company held for sale WMI Group. In June 2018, upon the termination of its agreement to sell the WMI Group to CPI Aerostructures, Inc., management of the Company decided not to hold for sale the WMI Group. Upon the change in plan of sale, the Company reclassified the assets held for sale at the lower of the carrying value before being classified as held for sale adjusted for depreciation that would have been recognized during the time they were classified as held for sale or fair value at the date the Company decided not to sell and liabilities held for sale were also reclassified to their liability group. For presentation purposes, the assets and liabilities previously held for sale as of December 31, 2017 were reclassified in the December 31, 2017 balance sheet in the accompanying financial statements back to their original asset and liability groups at their previous carrying values. In connection with this reclassification, the Company recorded a gain of $1,563,000 during the quarter ended June 30, 2018 and for the six months then ended, relating to the reversal of the reserve that was recorded as of December 31, 2017 for the excess of the carrying value of assets held for sale over the disposal group’s fair value, less costs to sell. For presentation purposes in the December 31, 2017 balance sheet in the accompanying financial statements, the $1,563,000 reserve has been included in Accounts Payable and Accrued Expenses. Based on the Company's change in plan to sell WMI Group, the Company's December 31, 2017 balance sheet was adjusted to reflect a reduction in assets held for sale of $10,082,000 and a reduction of liabilities directly associated to assets held for sale of $2,795,000, with an increase in the following asset groups: Accounts Receivable, net of allowance for doubtful accounts $ $2,217,000; Inventory, net of reserves $8,065,000; Prepaid and other assets $485,000; Property and equipment, net of accumulated depreciation $878,000; and an increase in the following liability groups: Accounts payable and accrued expenses $3,701,000; Deferred Revenue $521,000; Notes Payable & Capital lease obligations $11,000; Deferred rent $125,000. Inventory Valuation For annual periods, the Company values inventory at the lower of cost on a first-in-first out basis or net realizable value. The Company does not take physical inventories at interim quarterly reporting periods. As such, approximately 50% of the inventory value at June 30, 2018 has been estimated using a gross profit percentage based on sales of previous periods to the net sales of the current period, as management believes that the gross profit percentage on these items are materially consistent from period to period. The remainder of the inventory value at June 30, 2018 is estimated based on the Company's standard cost perpetual inventory system, as management believes the perpetual system computed value for these items provides a better estimate of value for that inventory. Adjustments to reconcile the annual physical inventory to the Company’s books are treated as changes in accounting estimates and are recorded in the fourth quarter. Inventories consist of the following at: June 30, December 31, 2018 2017 (unaudited) Raw Materials $ 14,383,000 $ 13,936,000 Work In Progress 19,715,000 20,504,000 Finished Goods 10,963,000 10,636,000 Inventory Reserve (6,016,000 ) (5,871,000 ) Total Inventory $ 39,045,000 $ 39,205,000 Credit and Concentration Risks There were two customers that represented 45.7% and three customers represented 57.2% of total net sales for the three months ended June 30, 2018 and 2017, respectively. This is set forth in the table below. Customer Percentage of Sales June 2018 June 2017 (Unaudited) (Unaudited) 1 26.1 16.7 2 19.6 23.5 3 * 17.0 * Customer was less than 10% of sales at June 30, 2018. There were two customers that represented 49.2% of total sales, and three customers that represented 53.5% of total sales for the six months ended June 30, 2018 and 2017, respectively. This is set forth in the table below. Customer Percentage of Sales June 2018 June 2017 (Unaudited) (Unaudited) 1 26.6 19.4 2 22.6 16.7 3 * 17.4 * Customer was less than 10% of sales at June 30, 2018. There were two customers that represented 49.8% of gross accounts receivable and three customers that represented 55.5% of gross accounts receivable at June 30, 2018 and December 31, 2017, respectively. This is set forth in the table below. Customer Percentage of Receivables June 2018 December 2017 (Unaudited) 1 38.5 30.3 2 11.3 10.5 3 * 14.7 * Customer was less than 10% of gross accounts receivable at June 30, 2018. 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. 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. Earnings per share Basic earnings per share 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. Potentially dilutive shares, using the treasury stock method, are included in the diluted per-share calculations for all periods when the effect of their inclusion is dilutive. The following is a reconciliation of the denominators of basic and diluted earnings per share computations: Three Months Ended Six Months Ended June 30, June 30, June 30, June 30, (Unaudited) (Unaudited) (Unaudited) (Unaudited) Weighted average shares outstanding used to compute basic earnings per share 26,013,426 7,650,165 26,057,062 7,650,165 Effect of dilutive stock options and warrants 65,951 - — — Weighted average shares outstanding and dilutive securities used to compute dilutive earnings per share 26,079,377 7,650,165 26,057,062 7,650,165 The following securities have been excluded from the calculation as the exercise price was greater than the average market price of the common shares: Six Months Ended June 30, June 30, (Unaudited) (Unaudited) Stock Options 695,000 - Warrants 480,000 85,000 1,175,000 85,000 The following securities have been excluded from the calculation even though the exercise price was less than the average market price of the common shares because the effect of including these potential shares was anti-dilutive due to the net loss incurred during that period: June 30, June 30, (Unaudited) (Unaudited) Convertible Preferred Stock — 2,631,000 Stock Options 349,000 516,000 Warrants 1,480,000 979,000 1,829,000 4,126,000 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. Stock based compensation amounted to $225,000 and ($73,000) for the six months ended June 30, 2018 and 2017, respectively, and was included in operating expenses on the accompanying Condensed Consolidated Statements of Operations. 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 $272,000 at June 30, 2018 and December 31, 2017 relates to the acquisitions of NTW $163,000 and ECC $109,000. Goodwill is not amortized, but is tested at least annually for impairment, or if circumstances occur that more likely than not reduce the fair value of the reporting unit below its carrying amount. The Company has determined that there has been no impairment of goodwill at June 30, 2018. Recently Issued Accounting Pronouncements On May 28, 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers. ASU 2014-09 supersedes existing revenue recognition guidance, including ASC 605-35, Revenue Recognition - Construction-Type and Production-Type Contracts, and outlines a single set of comprehensive principles for recognizing revenue under U.S. GAAP. Among other things, it requires companies to identify contractual performance obligations and determine whether revenue should be recognized at a point in time or over time. On July 9, 2015, the FASB approved a one year deferral of the effective date of ASU 2014-09 to annual reporting periods beginning after December 15, 2017. The Company will adopt the New Revenue Standard effective January 1, 2019, as allowed under the Company’s Emerging Growth Status designation. The new guidance allows for two transition methods in application - (i) retrospective to each prior reporting period presented, or (ii) prospective with the cumulative effect of adoption recognized on January 1, 2019 (also known as the modified retrospective approach). The Company is still assessing which transition method to adopt. This guidance requires additional disclosures of the amount by which each financial statement line item affected in the current reporting period during 2019 as compared to the guidance that was in effect before the change, and an explanation of the reasons for the significant changes. The Company currently recognizes the majority of its revenues based on shipment of products (at a point in time). Currently, some contracts the Company enters into with customers are accounted for on a percentage of completion or milestone basis. For contracts with a significant amount of development and/or requiring the delivery of a minimal number of units, revenue and profit are recognized using the percentage-of-completion cost-to-cost method or a milestone to measure progress. For contracts that require the Company to produce a substantial number of similar items without a significant level of development, the Company currently records revenue and profit using the units-of-delivery method as the basis for measuring progress on the contract. Under ASC 606, revenue will be recognized as the customer obtains control of the goods and services promised in the contract (i.e., performance obligations). The Company may also have more performance obligations in our contracts under ASC 606, which may impact the timing of recording sales and operating profit, including those where sales recognition is deferred pending the incurrence of costs. The Company has not completed its assessment of the effects of the New Revenue Standard, and has not determined whether adopting ASU 2014-09 will have a material effect on its consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842).” Among other things, in the amendments in ASU 2016-02, lessees will be required to recognize the following for all leases (with the exception of short-term leases) at the commencement date: (1) A lease liability, which is a lessee‘s obligation to make lease payments arising from a lease, measured on a discounted basis; and (2) A right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. Under the new guidance, lessor accounting is largely unchanged. Certain targeted improvements were made to align, where necessary, lessor accounting with the lessee accounting model and Topic 606, Revenue from Contracts with Customers. The amendments in this ASU are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early application is permitted upon issuance. Lessees (for capital and operating leases) and lessors (for sales-type, direct financing, and operating leases) must apply a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The modified retrospective approach would not require any transition accounting for leases that expired before the earliest comparative period presented. Lessees and lessors may not apply a full retrospective transition approach. The Company is currently assessing the impact that ASU 2016-02 will have on its consolidated financial statements. The Company has been gathering the lease agreement data and has begun to analyze the financial impact to the consolidated financial statements. In July 2018, the FASB issued ASU 2018-10, Codification Improvements to Topic 842, Leases and ASU 2018-11 “Leases (Topic 842): Targeted Improvements” (ASU 2018-11). ASU 2018-10 clarifies certain areas within ASU 2016-02. Prior to ASU 2018-11, a modified retrospective transition was required for financing or operating leases existing at or entered into after the beginning of the earliest comparative period presented in the financial statements. ASU 2018-11 allows entities an additional transition method to the existing requirements whereby an entity could adopt the provisions of ASU 2016-02 by recognizing a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption without adjustment to the financial statements for periods prior to adoption. ASU 2018-11 also allows a practical expedient that permits lessors to not separate non-lease components from the associated lease component if certain conditions are present. An entity that elects to use the practical expedients will, in effect, continue to account for leases that commenced before the effective date in accordance with previous GAAP unless the lease is modified, except that lessees are required to recognize a right-of-use asset and a lease liability for all operating leases at each reporting date based on the present value of the remaining minimum rental payments that were tracked and disclosed under previous GAAP. ASU 2016-02, ASU 2018-10 and ASU 2018-11 will be effective for the Company’s fiscal year beginning April 1, 2019 and subsequent interim periods. The Company's current lease arrangements expire through 2021 and the Company is currently evaluating the impact the adoption of these ASUs will have on the Company’s condensed consolidated financial statements. In April 2016, the FASB issued ASU 2016-10 Revenue from Contracts with Customers (Topic 606) (“ASU 2016-10”). The core principle of the guidance in Topic 606 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The amendments in ASU 2016-10 affect the guidance in ASU 2014-09, Revenue from Contracts with Customers, which is not yet effective. The effective date and transition requirements of ASU 2016-10 are the same as the effective date and transition requirements of ASU 2014-09. They are effective prospectively for reporting periods beginning after December 15, 2017 and early adoption is not permitted. The Company is currently assessing the impact of the adoption of these amendments on its consolidated financial statements. In May 2016, the FASB issued Accounting Standards Update No. 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow -Scope Improvements and Practical Expedients. The amendments do not change the core revenue recognition principle in Topic 606. The amendments provide clarifying guidance in certain narrow areas and add some practical expedients. These amendments are effective at the same date that Topic 606 is effective. Topic 606 is effective for public entities for annual reporting periods beginning after December 15, 2017, including interim reporting periods therein (i.e., January 1, 2018, for a calendar year entity). Topic 606 is effective for nonpublic entities one year later. The Company is currently assessing the impact of the adoption of the amendments to Topic 606 and these amendments on its consolidated financial statements. In September 2017, the FASB issued ASU 2017-13, “Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840), and Leases (Topic 842),” which provides additional implementation guidance on the previously issued ASU 2016-02 Leases (Topic 842). The revenue standard is effective for annual periods beginning after December 15, 2017. ASU 2016-02 requires a lessee to recognize assets and liabilities on the balance sheet for leases with lease terms greater than 12 months. ASU 2016-02 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018, and early adoption is permitted. The Company is currently assessing the impact of the adoption of this guidance on its consolidated financial statements. In February 2018, the FASB issued Accounting Standards Update No. 2018-02, Income Statement – Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. This update will be effective for all interim and annual reporting periods beginning after December 15, 2018. The Company is currently assessing the impact of the adoption of these amendments on its consolidated financial statements. In March 2018, the FASB issued Accounting Standards Update No. 2018-05, Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118 (“ASU 2018-05”). ASU 2018-05 adds various SEC paragraphs pursuant to the issuance of the December 2017 SEC Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (“SAB No. 118”), which was effective immediately. SAB No.118 provides for a provisional one year measurement period for entities to finalize their accounting for certain income tax effects related to the Tax Cuts and Jobs Act. The adoption of ASU 2018-05 had no material impact on the Company’s consolidated financial statements as of and for the six months ended June 30, 2018. See Note 8, Income Taxes, for disclosures related to this amended guidance. In June 2018, the FASB issued ASU No. 2018-07, Compensation Stock Compensation (Topic 718), Improvements to Nonemployee Share-Based Payment Accounting. This ASU is intended to simplify aspects of share-based compensation issued to non-employees by making the guidance consistent with the accounting for employee share based compensation. The guidance is effective for the Company for the fiscal year beginning January 1, 2020. While the exact impact of this standard is not known, the guidance is not expected to have a material impact on the Company’s consolidated financial statements, as non-employee stock compensation is nominal relative to the Company's total expenses as of June 30, 2018. 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.

Property and Equipment

Property and Equipment	6 Months Ended
	Jun. 30, 2018
Property, Plant and Equipment [Abstract]
PROPERTY AND EQUIPMENT	Note 3. PROPERTY AND EQUIPMENT The components of property and equipment at June 30, 2018 and December 31, 2017 consisted of the following: June 30, December 31, 2018 2017 (unaudited) Land $ 300,000 $ 300,000 Buildings and Improvements 1,650,000 1,650,000 31.5 years Machinery and Equipment 13,430,000 13,414,000 5 - 8 years Capital Lease Machinery and Equipment 6,534,000 6,534,000 5 - 8 years Tools and Instruments 9,029,000 8,538,000 1.5 - 7 years Automotive Equipment 172,000 172,000 5 years Furniture and Fixtures 443,000 438,000 5 - 8 years Leasehold Improvements 997,000 997,000 Term of Lease Computers and Software 519,000 519,000 4 - 6 years Total Property and Equipment 33,074,000 32,562,000 Less: Accumulated Depreciation (23,078,000 ) (21,634,000 ) Property and Equipment, net $ 9,996,000 $ 10,928,000 Depreciation expense for the three months ended June 30, 2018 and 2017 was $722,000 and $714,000, respectively. Depreciation expense for the six months ended June 30, 2018 and 2017 was $1,444,000 and $1,442,000, respectively. Assets held under capitalized lease obligations are depreciated over the shorter of their related lease terms or their estimated productive lives. Depreciation of assets under capital leases is included in depreciation expense for 2018 and 2017. Accumulated depreciation on these assets was approximately $4,246,000 and $3,595,000 as of June 30, 2018 and December 31, 2017, respectively.

Intangible Assets

Intangible Assets	6 Months Ended
	Jun. 30, 2018
Goodwill and Intangible Assets Disclosure [Abstract]
INTANGIBLE ASSETS	Note 4. INTANGIBLE ASSETS The components of intangible assets consisted of the following: June 30, December 31, 2018 2017 (unaudited) Customer Relationships $ 4,925,000 $ 4,925,000 5 to 14 years Non-Compete 50,000 50,000 5 years Total Intangible Assets 4,975,000 4,975,000 Less: Accumulated Amortization (4,975,000 ) (4,975,000 ) Intangible Assets, net $ - $ - The expense for amortization of the intangibles for the six months ended June 30, 2018 and 2017 was approximately $457,000 and $581,000, respectively.

Notes Payable and Capital Lease

Notes Payable and Capital Lease Obligations	6 Months Ended
	Jun. 30, 2018
Notes and Loans Payable [Abstract]
NOTES PAYABLE AND CAPITAL LEASE OBLIGATIONS	Note 5. NOTES PAYABLE AND CAPITAL LEASE OBLIGATIONS Notes payable and capital lease obligations consist of the following: June 30, December 31, 2018 2017 (unaudited) Revolving credit note payable to PNC Bank N.A. ("PNC") $ 19,253,000 $ 16,455,000 Term loans, PNC 2,733,000 3,471,000 Capital lease obligations 2,439,000 3,085,000 Related party notes payable, net of debt discount 3,025,000 1,912,000 Convertible notes payable-third parties, net of debt discount 2,244,000 1,930,000 Subtotal 29,694,000 26,853,000 Less: Current portion of notes and capital obligations (26,674,000 ) (23,405,000 ) Notes payable and capital lease obligations, net of current portion $ 3,020,000 $ 3,448,000 PNC Bank N.A. ("PNC") The Company has a Loan Facility with PNC secured by substantially all of its assets which has been amended many times since 2013. The Loan Facility was amended on May 30, 2018 (the “Sixteenth Amendment”) In connection with the Sixteenth Amendment; the Company paid PNC a fee of $125,000 in two instalments and reimbursed it for the fees and expenses of its counsel. The Sixteenth Amendment provides for a $20,000,000 revolving loan and a Term Loan with a balance at May 31, 2018 of $2,856,000. Under the terms of the Loan Facility, as amended, the revolving loan and the term loan now bear interest at (a) the sum of the Alternate Base Rate plus three percent (3%) with respect to Domestic Rate Loans, and (b) the sum of the Eurodollar rate plus four and one-half percent (4.5%) with respect to Eurodollar Rate Loans. Both the revolving loan and the term loan mature on December 31, 2018 and are classified with the current portion of notes and capital lease obligations. The Sixteenth Amendment waived the Fixed Charge Coverage Ratio covenant violations for the periods ending September 30, 2017, December 31, 2017 and March 31, 2018. The Sixteenth Amendment imposes minimum EBITDA (as defined in the Loan Agreement) covenants of not less than (i) $75,000 for the three-month period ending March 31, 2018, (ii) $485,000 for the six month period ending June 30, 2018, and (iii) $1,200,000 for the nine-month period ending September 30, 2018. The Company complied with these new covenants for the three-months ended March 31, 2018 and six-month period ending June 30, 2018. In addition, the Company is prohibited from paying dividends to its shareholders and limits capital expenditures. On June 19, 2017, we entered into the Fifteenth Amendment to the Loan Facility, which waived the failure to comply with the minimum EBITDA covenant for the periods ended December 31, 2016 and March 31, 2017 and the Capital Expenditures covenant for the period ended December 31, 2016. The amendment also requires that we maintain at all times a Fixed Charge Coverage Ratio, tested quarterly on a consolidated basis beginning September 30, 2017, as follows: (i) 1.00 to 1.00 for the quarter ending September 30, 2017, tested based upon the prior three (3) months, (ii) 1.05 to 1.00 for the quarter ending December 31, 2017, tested based upon the prior six (6) months and (iii) 1.05 to 1.00 for the quarter ending March 31, 2018, tested based upon the prior nine months and that we maintain EBITDA of not less than $345,000 for the period ending September 30, 2017. The amendment also provided that we were not required to maintain a Fixed Charge Coverage Ratio and that no testing was required to the Fixed Charge Coverage Ratio for the periods ending December 31, 2016 and June 30, 2017 and that we are not required to maintain a Fixed Charge Coverage Ratio and that no testing will be required of the Fixed Charge Coverage Ratio for the period ending June 30, 2017. In addition, the Fifteenth Amendment reduced the weekly payments we are required to make to reduce our $2,244,071 over-advance under the revolving credit facility as of June 19, 2017 from $100,000 to $25,000 per week during the period commencing May 22, 2017 through and including July 10, 2017. At December 31, 2017, the over-advance had been paid in full. We paid $50,000 to PNC in connection with the amendment and reimbursed PNC’s counsel fees. As of June 30, 2018, our debt to PNC in the amount of $21,986,000 consisted of the revolving credit loan in the amount of $19,253,000 and the term loan in the amount of $2,733,000. As of December 31, 2017, our debt to PNC in the amount of $19,926,000 consisted of the revolving credit note due to PNC in the amount of $16,455,000 and the term loan due to PNC in the amount of $3,471,000. Each day, the Company’s cash collections are swept directly by the bank to reduce the revolving loans and the Company then borrows according to a borrowing base formula. The Company's receivables are payable directly into a lockbox controlled by PNC (subject to the terms of the Loan Facility). PNC may use some elements of subjective business judgment in determining whether a material adverse change has occurred in the Company's condition, results of operations, assets, business, properties or prospects allowing it to demand repayment of the Loan Facility. As of June 30, 2018 the future minimum principal payments for the term loans are as follows: For the twelve months ending Amount June 30, 2019 $ 1,478,000 June 30, 2020 1,255,000 PNC Term Loans payable 2,733,000 Less: Current portion (2,733,000 ) Long-term portion $ — Interest expense related to these credit facilities amounted to $693,000 and $986,000 for the six months ended June 30, 2018 and 2017, respectively. Capital Leases Payable – Equipment The Company is committed under several capital leases for manufacturing and computer equipment. All leases have bargain purchase options exercisable at the termination of each lease. Capital lease obligations totaled $2,439,000 and $3,073,000 as of June 30, 2018 and December 31, 2017, respectively, with various interest rates ranging from approximately 4% to 14%. As of June 30, 2018, the aggregate future minimum lease payments, including imputed interest, with remaining terms of greater than one year are as follows: For the twelve months ending Amount June 30, 2019 $ 1,344,000 June 30, 2020 1,050,000 June 30, 2021 151,000 June 30, 2022 39,000 June 30, 2023 — Thereafter — Total future minimum lease payments 2,584,000 Less: imputed interest (145,000 ) Less: current portion (1,244,000 ) Total Long Term Portion $ 1,195,000 Related Party Notes Payable Taglich Brothers, Inc. is a corporation co-founded by two directors of the Company, Michael and Robert Taglich. In addition, a third director of the Company is a vice president of Taglich Brothers, Inc. 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. In addition, Michael and Robert Taglich have also invested as individuals in the Company a total of $ 8,860,000 through various debt and equity financings. From November 23, 2016 through March 21, 2017, the Company received gross proceeds of $1,950,000 from Robert and Michael Taglich, from the sale of an equal principal amount of our 8% Subordinated Convertible Notes (the “8% Notes”). See “Private Placements of 8% Subordinated Convertible Notes” below. In November 2017, Michael Taglich and Robert Taglich purchased 144,927 shares and 72,463 shares, respectively, of common stock, together with warrants to purchase an additional 48,000 shares and 24,000 shares, respectively, of common stock, for a purchase price of $200,000 and $100,000, respectively, in a private placement of the Company’s equity securities completed in January 2018 from which the Company received gross proceeds of $2,000,000. Taglich Brothers, Inc., which as placement agent for the sale of the shares and warrants, received a placement agent fee equal to $160,000 (8% of the amounts invested), payable at the Company’s option, in cash or additional shares of common stock and warrants having the same terms and conditions as the shares and warrants issued in the offering. See Note 6 below. Private Placement of Subordinated Notes due May 31, 2018, together with Shares of Common Stock On March 29, 2018 and April 4, 2018, Michael Taglich and Robert Taglich advanced $1,000,000 and $100,000, respectively, to the Company for use as working capital. The Company subsequently issued its Subordinated Notes due May 31, 2019 to Michael Taglich and Robert Taglich, together with shares of common stock, in the financing described below, to evidence its obligation to repay the foregoing advances. In May 2018, the Company issued $1,200,000 of Subordinated Notes due May 31, 2019 (the “2019 Notes”), together with a total of 215,062 shares of common stock (the “Shares”), to Michael Taglich, Robert Taglich and another accredited investor. As part of the financing, the Company issued to Michael Taglich $1,000,000 principal amount of 2019 Notes and 178,571 shares of common stock for a purchase price of $1,000,000 and the Company issued to Robert Taglich $100,000 principal amount of 2019 Notes and 17,857 shares of common stock. The Company issued and sold a 2019 Note in the principal amount of $100,000, plus 18,634 shares of common stock, to the other accredited investor for a purchase price of $100,000. Seventy percent (70%) of the total purchase price for the 2019 Notes and Shares purchased by each investor has been allocated to the 2019 Notes with the remaining thirty percent (30%) allocated to the Shares purchased with the 2019 Notes. The number of Shares purchased by Michael Taglich and Robert Taglich was calculated based upon $1.68, the closing price of the common stock on May 20, 2018, the trading day immediately preceding the date they purchased the 2019 Notes and shares of common stock. Interest on the 2019 Notes is payable on the outstanding principal amount thereof at the rate of one percent (1%) per month, payable monthly commencing June 30, 2018. Upon the occurrence and continuation of a failure to pay accrued interest, interest shall accrue and be payable on such amount at the rate of 1.25% per month; provided that upon the occurrence and continuation of a failure to timely pay the principal amount of the 2019 Note, interest shall accrue and be payable on such principal amount at the rate of 1.25% per month and shall no longer be payable on interest accrued but unpaid. The 2019 Notes are subordinate to the Company’s obligations to PNC. Taglich Brothers acted as placement agent for the offering and received a commission in the aggregate amount of 4% of the amount invested which was paid in kind. Related party advances and notes payable, net of debt discounts to Michael and Robert Taglich, and their affiliated entities, totaled $3,025,000 and $1,912,000, as of June 30, 2018 and December 31, 2017, respectively. The gross proceeds of $1,200,000 was completed in the following closings: Date Gross Proceeds Promissory Note $ Common Stock Price Shares 3/29/2108 1,000,000 700,000 300,000 1.68 178,571 4/4/2018 100,000 70,000 30,000 1.68 17,857 5/21/2018 100,000 70,000 30,000 1.64 18,334 5/21/2018 48,000 48,000 14,400 1.68 8,571 Total 1,248,000 888,000 374,400 223,333 Private Placements of 8% Subordinated Convertible Notes From November 23, 2016 through March 21, 2017, the Company received gross proceeds of $4,775,000, of which $1,950,000 were received from Robert and Michael Taglich, from the sale of an equal principal amount of our 8% Subordinated Convertible Notes (the “8% Notes”), together with warrants to purchase a total of 383,080 shares of our common stock, in private placement transactions with accredited investors (the “8% Note Offerings”). In connection with the offering of the 8% Notes, the Company issued 8% Notes in the aggregate principal amount of $382,000 to Taglich Brothers, Inc., placement agent for the 8% Note Offerings, in lieu of payment of cash compensation for sales commissions, together with warrants to purchase a total of 180,977 shares of our common stock. Payment of the principal and accrued interest on the 8% Notes are junior and subordinate in right of payment to our indebtedness under the Loan Facility. Interest on the 2018 Notes is payable on the outstanding principal amount thereof at the annual rate of 8%, payable quarterly commencing February 28, 2017, in cash, or at our option, in additional 2018 Notes, provided that if accrued interest payable on $1,269,000 principal amount of the 2018 Notes issued in December 2016 is paid in additional 2018 Notes, interest for that quarterly interest payment shall be calculated at the rate of 12% per annum. Upon the occurrence and continuation of an event of default, interest shall accrue at the rate of 12% per annum. During the six months ended June 30, 2018, we issued $196,940 principal amount of 8% Notes in lieu of cash payment of accrued interest. As of June 30, 2018, we had outstanding $4,775,000 principal amount of 8% Notes, of which $2,575,000 principal amount is due on November 30, 2018 and $2,200,000 principal amount is due on February 28, 2019. The outstanding principal amount plus accrued interest on the 8% Notes is convertible at the option of the holder into shares of common stock conversion prices ranging from $2.25 to $4.45 per share, subject to certain anti-dilution and other adjustments, including stock splits, and in the event of certain fundamental transactions such as mergers and other business combinations. An event of default under the 8% Notes will occur (i) if the Company fails to make any payment under the 8% Notes within ten days after the date first due, or (ii) if the Company files a petition in bankruptcy or under any similar insolvency law, makes an assignment for the benefit of its creditors, or if any voluntary petition in bankruptcy or under any similar insolvency law is filed against the Company and such petition is not dismissed within sixty (60) days after the filing thereof. Upon the occurrence and continuation of an event of default, holders of a majority of the outstanding principal amount of the 8% Notes then outstanding, upon notice to the Company and the holders of the Senior Indebtedness (as defined in the 8% Notes), may demand immediate payment of the unpaid principal amount of the 8% Notes, together with accrued interest thereon and all other amounts payable under the 8% Notes, subject to the subordination provisions of the 8% Notes. The exercise price of the warrants issued in connection with the 8% Note Offerings ranges from $3.00 to $4.53 per share, subject to certain anti-dilution and other adjustments, including stock splits, distributions in respect of the common stock and in the event of certain fundamental transactions such as mergers and other business combinations, and may be exercised on a cashless basis for a lesser number of shares depending upon prevailing market prices at the time of exercise. Of these warrants, 320,702 warrants may be exercised until November 30, 2021 and 243,307 warrants may be exercised until January 31, 2022.

Stockholders' Equity

Stockholders' Equity	6 Months Ended
	Jun. 30, 2018
Equity [Abstract]
STOCKHOLDERS' EQUITY	Note 6. STOCKHOLDERS' EQUITY Common Stock -- Sale of Unregistered Equity Securities On November 29, 2017, Air Industries Group (the “Company”) entered into a Placement Agency Agreement with Taglich Brothers, Inc. as placement agent (the “Placement Agent”), pursuant to which the Placement Agent agreed to offer on behalf of the Company, on a best efforts basis, up to 1,600,000 shares of the Company’s common stock (the “Shares”) to accredited investors (the “Offering”), together with five-year warrants to purchase 24,000 shares of common stock (the “Warrants”) for each $100,000 of shares purchased, in a private placement exempt from the registration requirements of the Securities Act. On January 9, 2018 the Company issued and sold to 35 accredited investors an aggregate of 852,000 Shares and Warrants to purchase an additional 255,600 shares of common stock, for gross proceeds of $1,065,000 pursuant to the Offering. The purchase price for the Shares and Warrants was $1.25 per Share. The Company had previously sold a total of 725,390 Shares and Warrants to purchase an additional 224,400 shares of common stock for gross proceeds of $935,000 on November 29, 2017, December 5, 2017 and December 29, 2017 pursuant to the Offering. The Warrants have an exercise price of $1.50 per share, subject to certain anti-dilution and other adjustments, including stock splits, and in the event of certain fundamental transactions such as mergers and other business combinations, and may be exercised on a cashless basis for a lesser number of shares depending upon prevailing market prices at the time of exercise. The Warrants may be exercised until November 30, 2022. In connection with the Offering, Taglich Brothers, Inc., a related party, which acted as placement agent for the sale of the Shares and Warrants, is entitled to a placement agent fee equal to $104,000 (8% of the amounts invested), payable at the Company’s option, in cash or additional shares of common stock and warrants having the same terms and conditions as the Shares and Warrants. Michael Taglich and Robert Taglich, directors of the Company, are principals of Taglich Brothers, Inc. The placement agent fee was $85,200 and $0 for the three months ended March 31, 2018 and 2017, respectively. The Offering commenced November 29, 2017 and was completed in four closings for gross proceeds of $2,000,000 as follows: Shares Warrants Date Total Investment # of shares Price # of warrants Ex Price 11/29/2017 $ 300,000 217,390 $ 1.38 72,000 $ 1.50 12/5/2017 400,000 320,000 $ 1.25 96,000 $ 1.50 12/29/2017 235,000 188,000 $ 1.25 56,400 $ 1.50 Subtotal- 2017 935,000 725,390 224,400 1/9/2018 1,065,000 852,000 $ 1.25 255,600 $ 1.50 Total Offering $ 2,000,000 1,577,390 480,000 During the six months ended June 30, 2018, the Company issued 123,456 shares of common stock in lieu of cash payment for various services provided to the Company. On July 19, 2018, the Company issued and sold a total of 322,000 shares of common stock for gross proceeds of $460,460, or a $1.43 per share, to four accredited investors pursuant to subscription agreements. For acting as placement agent of the offering, Taglich Brothers, Inc. is entitled to a placement agent fee equal to $27,627.60 (6% of the gross proceeds of the offering), payable at the Company’s option, in cash or shares of Common Stock on the terms sold to the purchasers.

Commitments and Contingencies

Commitments and Contingencies	6 Months Ended
	Jun. 30, 2018
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS AND CONTINGENCIES	Note 7. COMMITMENTS AND CONTINGENCIES Loss Contingencies On July 5, 2018, CPI Aerostructures, Inc. (the “CPI”) filed a complaint in the Supreme Court of the State of New York, County of New York, against the Company relating to the previously announced Stock Purchase Agreement dated as of March 21, 2018 (the “Agreement”) between the Company and CPI, pursuant to which the Company agreed to sell to CPI all of the shares of capital stock of its subsidiary, WMI. On July 2, 2018, the Company notified CPI that it was terminating the Agreement due to CPI’s failure to close on a timely basis. The complaint alleges that the Company willfully breached its contractual obligation to provide financial information required to fulfill key conditions for closing under the Agreement. CPI is seeking, among other things, an order of specific performance requiring the Company to comply with its obligations under the Agreement, monetary damages, and attorneys’ fees and costs. On July 30, 2018, the Company filed its answer and asserted counterclaims against CPI. The Company denied the allegations made by CPI in the complaint and alleged that CPI breached the Agreement and the covenant of good faith and fair dealing. The Company is seeking a declaration that the Agreement has terminated, along with monetary damages, attorneys’ fees, and costs. On July 31, 2018, CPI filed a motion for a preliminary injunction against the Company. The motion argued that the Company’s failure to provide financial data and other information necessary to close the transaction contemplated by the Agreement will cause irreparable injury to CPI. CPI is seeking an order directing the Company to furnish CPI with all previously requested financial, operating, and other data and information relating to WMI. The Company disputes the validity and applicability of the claims asserted by CPI and believes that it has meritorious defenses to those claims and intends to contest the action vigorously. 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. Westbury Park Associates, LLC commenced an action on or about January 11, 2017 against Air Industries Group in the NYS Supreme Court, County of Suffolk, seeking the recovery of approximately $31,000 for past rent arrears, and for an unidentified sum representing all additional rent due under an alleged commercial lease through the end of its term, plus attorney’s fees. The Company believes that it has a meritorious defense, and there was no lease on the property and that its subsidiary Compac Development Corp was a hold-over tenant occupying the space on month-to-month tenancy. An employee of the Company commenced an action against, among others, Rechler Equity B-2, LLC and Air Industries Group, in the Supreme Court State of New York, Suffolk County, seeking compensation in an undetermined amount for injuries suffered while leaving the premises occupied by Welding Metallurgy, Inc. Rechler Equity B-2, LLC, has served a Third Party Complaint in this action against Air Industries Group, Inc. and Welding Metallurgy, Inc. The action remains in the early pleading stage. The Company believes it is not liable to the employee and any amount it might have to pay would be covered by insurance. An employee of the Company commenced an action against, among others, Sterling Engineering and Air Industries Group, in Connecticut Commission on Human Rights and Opportunities, seeking lost wages in an undetermined amount for the employee’s termination. The action remains in the early pleading stage. The Company believes it is not liable to the employee and any amount it might have to pay would be covered by insurance.

Income Taxes

Income Taxes	6 Months Ended
	Jun. 30, 2018
Income Tax Disclosure [Abstract]
INCOME TAXES	Note 8. INCOME TAXES The Tax Cuts and Jobs Act (the “Tax Act”) was enacted on December 22, 2017, and permanently reduces the U.S. federal corporate rate from 35% to 21%, effective January 1, 2018. SAB No. 118 allows a company to record a provisional amount when it does not have the necessary information available, prepared, or analyzed in reasonable detail to complete its accounting for the change in the tax law during the measurement period. As of June 30, 2018, the Company has not completed it accounting for the tax effects of the enactment of the Tax Act; however, the Company has made a reasonable estimate of the effects on its existing deferred tax balances. The Company is still analyzing the Tax Act and refining its calculations, which could potentially impact the measurement of its tax balances. The Company expects to complete its analysis within the measurement period. The Company recorded no Federal income tax benefit for the six months ended June 30, 2018. A tax benefit of approximately $690,000 would have been recorded for the six months ended June 30, 2018, had there not been a full valuation allowance recorded against incremental deferred tax assets created during the period. In determining the estimated annual effective income tax rate, the Company analyzes various factors, including projections of our annual earnings and taxing jurisdictions in which the earnings will be generated, the impact of state and local income taxes, their ability to use tax credits and net operating loss carry forwards, and available tax planning alternatives. As of June 30, 2018 and December 31, 2017, the Company provided a valuation allowance against its net deferred tax assets since the Company believes it is more likely than not that its deferred tax assets will not be realized. The provision for (benefit from) income taxes as of June 30, is set forth below: 2018 2017 (unaudited) (unaudited) Current Federal $ — $ — State 2,000 (21,000 ) Prior Year Under accrual Federal — (178,000 ) State — — Total Current Expense 2,000 (199,000 ) Deferred Tax Benefit — --- Valuation Allowance — — Net Provision for (Benefit from) Income Taxes $ 2,000 $ (199,000 )

Segment Reporting

Segment Reporting	6 Months Ended
	Jun. 30, 2018
Segment Reporting [Abstract]
SEGMENT REPORTING	Note 9. 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. The Company currently divides its operations into three operating segments: Complex Machining, which consists of AIM and NTW; Aerostructures and Electronics which consists of WMI (including WPI, MSI and Compac), Eur-Pac, with ECC; and Turbine Engine Components which consists of Sterling and AMK, for the period January 1, 2017 until it was disposed of on January 27, 2017. Along with our operating subsidiaries, we report the results of our corporate division as an independent segment. The accounting policies of each of the segments are the same as those described in the Summary of Significant Accounting Policies. The Company evaluates performance based on revenue, gross profit contribution and assets employed. Corporate level operating costs are allocated to segments. These costs include corporate costs such as legal, audit, tax and other professional fees including those related to being a public company. Financial information about the Company’s operating segments for the three and six months ended June 30, 2018 and 2017 are as follows: Three Months Ended Six Months Ended 2018 2017 2018 2017 (Unaudited) (Unaudited) (Unaudited) (Unaudited) COMPLEX MACHINING Net Sales $ 9,705,000 $ 10,473,000 $ 20,332,000 $ 20,364,000 Gross Profit 1,469,000 939,000 3,492,000 3,840,000 Pre Tax Income (Loss) 657,000 (1,378,000 ) 773,000 (293,000 ) Assets 44,077,000 44,222,000 44,077,000 44,222,000 AEROSTRUCTURES & ELECTRONICS Net Sales 4,844,000 4,733,000 7,720,000 9,053,000 Gross Profit 787,000 1,934,000 1,203,000 1,960,000 Pre Tax Income (Loss) 417,000 348,000 (147,000 ) (931,000 ) Assets 13,276,000 19,458,000 13,276,000 19,458,000 TURBINE ENGINE COMPONENTS Net Sales 1,268,000 1,878,000 2,550,000 3,820,000 Gross Profit 55,000 46,000 7,000 (179,000 ) Pre Tax Loss (115,000 ) (669,000 ) (572,000 ) (1,496,000 ) Assets 5,761,000 11,541,000 5,761,000 11,541,000 CORPORATE Net Sales — — — — Gross Profit — — — — Pre Tax Loss (2,337,000 ) (472,000 ) (2,898,000 ) (605,000 ) Assets 288,000 645,000 288,000 645,000 CONSOLIDATED Net Sales 15,817,000 17,084,000 30,602,000 33,237,000 Gross Profit 2,311,000 2,919,000 4,702,000 5,621,000 Gain on Change to Plan of Assets Held for Sale 1,563,000 - 1,563,000 - Pre Tax Income (Loss) 185,000 (2,171,000 ) (1,281,000 ) (3,325,000 ) Provision for (Benefit from) Income Taxes - (199,000 ) 2,000 (199,000 ) Net Income (Loss) 185,000 (1,972,000 ) (1,283,000 ) (3,126,000 ) Assets $ 63,402,000 $ 75,866,000 $ 63,402,000 $ 75,866,000

Summary of Significant Accoun15

Summary of Significant Accounting Policies (Policies)	6 Months Ended
	Jun. 30, 2018
Accounting Policies [Abstract]
Principal Business Activity	Principal Business Activity The Company through its AIM subsidiary is primarily engaged in manufacturing aircraft structural parts, and assemblies for prime defense contractors in the aerospace industry in the United States. NTW is a manufacturer of aerospace components, principally landing gear for F-16 and F-18 fighter aircraft. Welding Metallurgy is a specialty welding and products provider whose significant customers include the world's largest aircraft manufacturers, subcontractors, and original equipment manufacturers. Miller Stuart is a manufacturer of aerospace components whose customers include major aircraft manufacturers and the US Military. Miller Stuart specializes in electromechanical systems, harness and cable assemblies, electronic equipment and printed circuit boards. Woodbine is a manufacturer of aerospace components whose customers include major aircraft component suppliers. Eur-Pac specializes in military packaging and supplies. Eur-Pac’s primary business is “kitting” of supplies for all branches of the United States Defense Department including ordnance parts, hose assemblies, hydraulic, mechanical and electrical assemblies. Compac specializes in the manufacture of RFI/EMI (Radio Frequency Interference Electro-Magnetic Interference) shielded enclosures for electronic components. The Company’s customers consist mainly of publicly traded companies in the aerospace industry.
Assets Held for Sale	Assets Held for Sale The Company classifies assets as held for sale and suspends depreciation and amortization when approval at the appropriate level has been provided, the assets can be immediately removed from operations, an active program has begun to locate a buyer, the assets are being actively marketed for sale at or near their current fair value, significant changes to the plan of sale are not likely and the sale is probable within one year. Upon classification as held for sale, long-lived assets are no longer depreciated, and an assessment of impairment is performed to identify and expense any excess of carrying value over fair value less costs to sell. Subsequent changes to the estimated fair value less costs to sell will impact the measurement of assets held for sale. To the extent fair value increases, any impairment previously recorded is reversed. If the carrying value of the assets held for sale exceeds the fair value less costs to sell, the Company will record a loss for the amount of the excess. If the Company decides not to sell previously classified assets held for sale, the asset is reclassified back to their original asset group in the period that it’s determined to no longer be held for sale. The assets are recorded at the lower of the carrying value before being classified as held for sale adjusted for depreciation that would have been recognized during the time they were classified as held for sale or fair value at the date the Company decided not to sell. As of December 31, 2017 the Company held for sale WMI Group. In June 2018, upon the termination of its agreement to sell the WMI Group to CPI Aerostructures, Inc., management of the Company decided not to hold for sale the WMI Group. Upon the change in plan of sale, the Company reclassified the assets held for sale at the lower of the carrying value before being classified as held for sale adjusted for depreciation that would have been recognized during the time they were classified as held for sale or fair value at the date the Company decided not to sell and liabilities held for sale were also reclassified to their liability group. For presentation purposes, the assets and liabilities previously held for sale as of December 31, 2017 were reclassified in the December 31, 2017 balance sheet in the accompanying financial statements back to their original asset and liability groups at their previous carrying values. In connection with this reclassification, the Company recorded a gain of $1,563,000 during the quarter ended June 30, 2018 and for the six months then ended, relating to the reversal of the reserve that was recorded as of December 31, 2017 for the excess of the carrying value of assets held for sale over the disposal group’s fair value, less costs to sell. For presentation purposes in the December 31, 2017 balance sheet in the accompanying financial statements, the $1,563,000 reserve has been included in Accounts Payable and Accrued Expenses. Based on the Company's change in plan to sell WMI Group, the Company's December 31, 2017 balance sheet was adjusted to reflect a reduction in assets held for sale of $10,082,000 and a reduction of liabilities directly associated to assets held for sale of $2,795,000, with an increase in the following asset groups: Accounts Receivable, net of allowance for doubtful accounts $ $2,217,000; Inventory, net of reserves $8,065,000; Prepaid and other assets $485,000; Property and equipment, net of accumulated depreciation $878,000; and an increase in the following liability groups: Accounts payable and accrued expenses $3,701,000; Deferred Revenue $521,000; Notes Payable & Capital lease obligations $11,000; Deferred rent $125,000.
Inventory Valuation	Inventory Valuation For annual periods, the Company values inventory at the lower of cost on a first-in-first out basis or net realizable value. The Company does not take physical inventories at interim quarterly reporting periods. As such, approximately 50% of the inventory value at June 30, 2018 has been estimated using a gross profit percentage based on sales of previous periods to the net sales of the current period, as management believes that the gross profit percentage on these items are materially consistent from period to period. The remainder of the inventory value at June 30, 2018 is estimated based on the Company's standard cost perpetual inventory system, as management believes the perpetual system computed value for these items provides a better estimate of value for that inventory. Adjustments to reconcile the annual physical inventory to the Company’s books are treated as changes in accounting estimates and are recorded in the fourth quarter. Inventories consist of the following at: June 30, December 31, 2018 2017 (unaudited) Raw Materials $ 14,383,000 $ 13,936,000 Work In Progress 19,715,000 20,504,000 Finished Goods 10,963,000 10,636,000 Inventory Reserve (6,016,000 ) (5,871,000 ) Total Inventory $ 39,045,000 $ 39,205,000
Credit and Concentration Risks	Credit and Concentration Risks There were two customers that represented 45.7% and three customers represented 57.2% of total net sales for the three months ended June 30, 2018 and 2017, respectively. This is set forth in the table below. Customer Percentage of Sales June 2018 June 2017 (Unaudited) (Unaudited) 1 26.1 16.7 2 19.6 23.5 3 * 17.0 * Customer was less than 10% of sales at June 30, 2018. There were two customers that represented 49.2% of total sales, and three customers that represented 53.5% of total sales for the six months ended June 30, 2018 and 2017, respectively. This is set forth in the table below. Customer Percentage of Sales June 2018 June 2017 (Unaudited) (Unaudited) 1 26.6 19.4 2 22.6 16.7 3 * 17.4 * Customer was less than 10% of sales at June 30, 2018. There were two customers that represented 49.8% of gross accounts receivable and three customers that represented 55.5% of gross accounts receivable at June 30, 2018 and December 31, 2017, respectively. This is set forth in the table below. Customer Percentage of Receivables June 2018 December 2017 (Unaudited) 1 38.5 30.3 2 11.3 10.5 3 * 14.7 * Customer was less than 10% of gross accounts receivable at June 30, 2018. 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. 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.
Earnings per share	Earnings per share Basic earnings per share 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. Potentially dilutive shares, using the treasury stock method, are included in the diluted per-share calculations for all periods when the effect of their inclusion is dilutive. The following is a reconciliation of the denominators of basic and diluted earnings per share computations: Three Months Ended Six Months Ended June 30, June 30, June 30, June 30, (Unaudited) (Unaudited) (Unaudited) (Unaudited) Weighted average shares outstanding used to compute basic earnings per share 26,013,426 7,650,165 26,057,062 7,650,165 Effect of dilutive stock options and warrants 65,951 - — — Weighted average shares outstanding and dilutive securities used to compute dilutive earnings per share 26,079,377 7,650,165 26,057,062 7,650,165 The following securities have been excluded from the calculation as the exercise price was greater than the average market price of the common shares: Six Months Ended June 30, June 30, (Unaudited) (Unaudited) Stock Options 695,000 - Warrants 480,000 85,000 1,175,000 85,000 The following securities have been excluded from the calculation even though the exercise price was less than the average market price of the common shares because the effect of including these potential shares was anti-dilutive due to the net loss incurred during that period: June 30, June 30, (Unaudited) (Unaudited) Convertible Preferred Stock — 2,631,000 Stock Options 349,000 516,000 Warrants 1,480,000 979,000 1,829,000 4,126,000
Stock-Based Compensation	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. Stock based compensation amounted to $225,000 and ($73,000) for the six months ended June 30, 2018 and 2017, respectively, and was included in operating expenses on the accompanying Condensed Consolidated Statements of Operations.
Goodwill	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 $272,000 at June 30, 2018 and December 31, 2017 relates to the acquisitions of NTW $163,000 and ECC $109,000. Goodwill is not amortized, but is tested at least annually for impairment, or if circumstances occur that more likely than not reduce the fair value of the reporting unit below its carrying amount. The Company has determined that there has been no impairment of goodwill at June 30, 2018.
Recently Issued Accounting Pronouncements	Recently Issued Accounting Pronouncements On May 28, 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers. ASU 2014-09 supersedes existing revenue recognition guidance, including ASC 605-35, Revenue Recognition - Construction-Type and Production-Type Contracts, and outlines a single set of comprehensive principles for recognizing revenue under U.S. GAAP. Among other things, it requires companies to identify contractual performance obligations and determine whether revenue should be recognized at a point in time or over time. On July 9, 2015, the FASB approved a one year deferral of the effective date of ASU 2014-09 to annual reporting periods beginning after December 15, 2017. The Company will adopt the New Revenue Standard effective January 1, 2019, as allowed under the Company’s Emerging Growth Status designation. The new guidance allows for two transition methods in application - (i) retrospective to each prior reporting period presented, or (ii) prospective with the cumulative effect of adoption recognized on January 1, 2019 (also known as the modified retrospective approach). The Company is still assessing which transition method to adopt. This guidance requires additional disclosures of the amount by which each financial statement line item affected in the current reporting period during 2019 as compared to the guidance that was in effect before the change, and an explanation of the reasons for the significant changes. The Company currently recognizes the majority of its revenues based on shipment of products (at a point in time). Currently, some contracts the Company enters into with customers are accounted for on a percentage of completion or milestone basis. For contracts with a significant amount of development and/or requiring the delivery of a minimal number of units, revenue and profit are recognized using the percentage-of-completion cost-to-cost method or a milestone to measure progress. For contracts that require the Company to produce a substantial number of similar items without a significant level of development, the Company currently records revenue and profit using the units-of-delivery method as the basis for measuring progress on the contract. Under ASC 606, revenue will be recognized as the customer obtains control of the goods and services promised in the contract (i.e., performance obligations). The Company may also have more performance obligations in our contracts under ASC 606, which may impact the timing of recording sales and operating profit, including those where sales recognition is deferred pending the incurrence of costs. The Company has not completed its assessment of the effects of the New Revenue Standard, and has not determined whether adopting ASU 2014-09 will have a material effect on its consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842).” Among other things, in the amendments in ASU 2016-02, lessees will be required to recognize the following for all leases (with the exception of short-term leases) at the commencement date: (1) A lease liability, which is a lessee‘s obligation to make lease payments arising from a lease, measured on a discounted basis; and (2) A right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. Under the new guidance, lessor accounting is largely unchanged. Certain targeted improvements were made to align, where necessary, lessor accounting with the lessee accounting model and Topic 606, Revenue from Contracts with Customers. The amendments in this ASU are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early application is permitted upon issuance. Lessees (for capital and operating leases) and lessors (for sales-type, direct financing, and operating leases) must apply a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The modified retrospective approach would not require any transition accounting for leases that expired before the earliest comparative period presented. Lessees and lessors may not apply a full retrospective transition approach. The Company is currently assessing the impact that ASU 2016-02 will have on its consolidated financial statements. The Company has been gathering the lease agreement data and has begun to analyze the financial impact to the consolidated financial statements. In July 2018, the FASB issued ASU 2018-10, Codification Improvements to Topic 842, Leases and ASU 2018-11 “Leases (Topic 842): Targeted Improvements” (ASU 2018-11). ASU 2018-10 clarifies certain areas within ASU 2016-02. Prior to ASU 2018-11, a modified retrospective transition was required for financing or operating leases existing at or entered into after the beginning of the earliest comparative period presented in the financial statements. ASU 2018-11 allows entities an additional transition method to the existing requirements whereby an entity could adopt the provisions of ASU 2016-02 by recognizing a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption without adjustment to the financial statements for periods prior to adoption. ASU 2018-11 also allows a practical expedient that permits lessors to not separate non-lease components from the associated lease component if certain conditions are present. An entity that elects to use the practical expedients will, in effect, continue to account for leases that commenced before the effective date in accordance with previous GAAP unless the lease is modified, except that lessees are required to recognize a right-of-use asset and a lease liability for all operating leases at each reporting date based on the present value of the remaining minimum rental payments that were tracked and disclosed under previous GAAP. ASU 2016-02, ASU 2018-10 and ASU 2018-11 will be effective for the Company’s fiscal year beginning April 1, 2019 and subsequent interim periods. The Company's current lease arrangements expire through 2021 and the Company is currently evaluating the impact the adoption of these ASUs will have on the Company’s condensed consolidated financial statements. In April 2016, the FASB issued ASU 2016-10 Revenue from Contracts with Customers (Topic 606) (“ASU 2016-10”). The core principle of the guidance in Topic 606 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The amendments in ASU 2016-10 affect the guidance in ASU 2014-09, Revenue from Contracts with Customers, which is not yet effective. The effective date and transition requirements of ASU 2016-10 are the same as the effective date and transition requirements of ASU 2014-09. They are effective prospectively for reporting periods beginning after December 15, 2017 and early adoption is not permitted. The Company is currently assessing the impact of the adoption of these amendments on its consolidated financial statements. In May 2016, the FASB issued Accounting Standards Update No. 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow -Scope Improvements and Practical Expedients. The amendments do not change the core revenue recognition principle in Topic 606. The amendments provide clarifying guidance in certain narrow areas and add some practical expedients. These amendments are effective at the same date that Topic 606 is effective. Topic 606 is effective for public entities for annual reporting periods beginning after December 15, 2017, including interim reporting periods therein (i.e., January 1, 2018, for a calendar year entity). Topic 606 is effective for nonpublic entities one year later. The Company is currently assessing the impact of the adoption of the amendments to Topic 606 and these amendments on its consolidated financial statements. In September 2017, the FASB issued ASU 2017-13, “Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840), and Leases (Topic 842),” which provides additional implementation guidance on the previously issued ASU 2016-02 Leases (Topic 842). The revenue standard is effective for annual periods beginning after December 15, 2017. ASU 2016-02 requires a lessee to recognize assets and liabilities on the balance sheet for leases with lease terms greater than 12 months. ASU 2016-02 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018, and early adoption is permitted. The Company is currently assessing the impact of the adoption of this guidance on its consolidated financial statements. In February 2018, the FASB issued Accounting Standards Update No. 2018-02, Income Statement – Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. This update will be effective for all interim and annual reporting periods beginning after December 15, 2018. The Company is currently assessing the impact of the adoption of these amendments on its consolidated financial statements. In March 2018, the FASB issued Accounting Standards Update No. 2018-05, Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118 (“ASU 2018-05”). ASU 2018-05 adds various SEC paragraphs pursuant to the issuance of the December 2017 SEC Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (“SAB No. 118”), which was effective immediately. SAB No.118 provides for a provisional one year measurement period for entities to finalize their accounting for certain income tax effects related to the Tax Cuts and Jobs Act. The adoption of ASU 2018-05 had no material impact on the Company’s consolidated financial statements as of and for the six months ended June 30, 2018. See Note 8, Income Taxes, for disclosures related to this amended guidance. In June 2018, the FASB issued ASU No. 2018-07, Compensation Stock Compensation (Topic 718), Improvements to Nonemployee Share-Based Payment Accounting. This ASU is intended to simplify aspects of share-based compensation issued to non-employees by making the guidance consistent with the accounting for employee share based compensation. The guidance is effective for the Company for the fiscal year beginning January 1, 2020. While the exact impact of this standard is not known, the guidance is not expected to have a material impact on the Company’s consolidated financial statements, as non-employee stock compensation is nominal relative to the Company's total expenses as of June 30, 2018. 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.

Summary of Significant Accoun16

Summary of Significant Accounting Policies (Tables)	6 Months Ended
	Jun. 30, 2018
Accounting Policies [Abstract]
Schedule of inventory valuation	June 30, December 31, 2018 2017 (unaudited) Raw Materials $ 14,383,000 $ 13,936,000 Work In Progress 19,715,000 20,504,000 Finished Goods 10,963,000 10,636,000 Inventory Reserve (6,016,000 ) (5,871,000 ) Total Inventory $ 39,045,000 $ 39,205,000
Schedule of credit and concentration risks	There were two customers that represented 45.7% and three customers represented 57.2% of total net sales for the three months ended June 30, 2018 and 2017, respectively. This is set forth in the table below. Customer Percentage of Sales June 2018 June 2017 (Unaudited) (Unaudited) 1 26.1 16.7 2 19.6 23.5 3 * 17.0 * Customer was less than 10% of sales at June 30, 2018. There were two customers that represented 49.2% of total sales, and three customers that represented 53.5% of total sales for the six months ended June 30, 2018 and 2017, respectively. This is set forth in the table below. Customer Percentage of Sales June 2018 June 2017 (Unaudited) (Unaudited) 1 26.6 19.4 2 22.6 16.7 3 * 17.4 * Customer was less than 10% of sales at June 30, 2018. There were two customers that represented 49.8% of gross accounts receivable and three customers that represented 55.5% of gross accounts receivable at June 30, 2018 and December 31, 2017, respectively. This is set forth in the table below. Customer Percentage of Receivables June 2018 December 2017 (Unaudited) 1 38.5 30.3 2 11.3 10.5 3 * 14.7 * Customer was less than 10% of gross accounts receivable at June 30, 2018.
Schedule of earnings per share	Three Months Ended Six Months Ended June 30, June 30, June 30, June 30, (Unaudited) (Unaudited) (Unaudited) (Unaudited) Weighted average shares outstanding used to compute basic earnings per share 26,013,426 7,650,165 26,057,062 7,650,165 Effect of dilutive stock options and warrants 65,951 - — — Weighted average shares outstanding and dilutive securities used to compute dilutive earnings per share 26,079,377 7,650,165 26,057,062 7,650,165
Schedule of anti-dilutive securities	Six Months Ended June 30, June 30, (Unaudited) (Unaudited) Stock Options 695,000 - Warrants 480,000 85,000 1,175,000 85,000 June 30, June 30, (Unaudited) (Unaudited) Convertible Preferred Stock — 2,631,000 Stock Options 349,000 516,000 Warrants 1,480,000 979,000 1,829,000 4,126,000

Property and Equipment (Tables)

Property and Equipment (Tables)	6 Months Ended
	Jun. 30, 2018
Property, Plant and Equipment [Abstract]
Schedule of property and equipment	June 30, December 31, 2018 2017 (unaudited) Land $ 300,000 $ 300,000 Buildings and Improvements 1,650,000 1,650,000 31.5 years Machinery and Equipment 13,430,000 13,414,000 5 - 8 years Capital Lease Machinery and Equipment 6,534,000 6,534,000 5 - 8 years Tools and Instruments 9,029,000 8,538,000 1.5 - 7 years Automotive Equipment 172,000 172,000 5 years Furniture and Fixtures 443,000 438,000 5 - 8 years Leasehold Improvements 997,000 997,000 Term of Lease Computers and Software 519,000 519,000 4 - 6 years Total Property and Equipment 33,074,000 32,562,000 Less: Accumulated Depreciation (23,078,000 ) (21,634,000 ) Property and Equipment, net $ 9,996,000 $ 10,928,000

Intangible Assets (Tables)

Intangible Assets (Tables)	6 Months Ended
	Jun. 30, 2018
Goodwill and Intangible Assets Disclosure [Abstract]
Schedule of intangible assets	June 30, December 31, 2018 2017 (unaudited) Customer Relationships $ 4,925,000 $ 4,925,000 5 to 14 years Non-Compete 50,000 50,000 5 years Total Intangible Assets 4,975,000 4,975,000 Less: Accumulated Amortization (4,975,000 ) (4,975,000 ) Intangible Assets, net $ - $ -

Notes Payable and Capital Lea19

Notes Payable and Capital Lease Obligations (Tables)	6 Months Ended
	Jun. 30, 2018
Notes and Loans Payable [Abstract]
Schedule of notes payable and capital lease obligations	June 30, December 31, 2018 2017 (unaudited) Revolving credit note payable to PNC Bank N.A. ("PNC") $ 19,253,000 $ 16,455,000 Term loans, PNC 2,733,000 3,471,000 Capital lease obligations 2,439,000 3,085,000 Related party notes payable, net of debt discount 3,025,000 1,912,000 Convertible notes payable-third parties, net of debt discount 2,244,000 1,930,000 Subtotal 29,694,000 26,853,000 Less: Current portion of notes and capital obligations (26,674,000 ) (23,405,000 ) Notes payable and capital lease obligations, net of current portion $ 3,020,000 $ 3,448,000
Schedule of future minimum principal payments for term loans	For the twelve months ending Amount June 30, 2019 $ 1,478,000 June 30, 2020 1,255,000 PNC Term Loans payable 2,733,000 Less: Current portion (2,733,000 ) Long-term portion $ —
Schedule of future minimum lease payments, including imputed interest	For the twelve months ending Amount June 30, 2019 $ 1,344,000 June 30, 2020 1,050,000 June 30, 2021 151,000 June 30, 2022 39,000 June 30, 2023 — Thereafter — Total future minimum lease payments 2,584,000 Less: imputed interest (145,000 ) Less: current portion (1,244,000 ) Total Long Term Portion $ 1,195,000
Schedule of related party advances and notes payable	Date Gross Proceeds Promissory Note $ Common Stock Price Shares 3/29/2108 1,000,000 700,000 300,000 1.68 178,571 4/4/2018 100,000 70,000 30,000 1.68 17,857 5/21/2018 100,000 70,000 30,000 1.64 18,334 5/21/2018 48,000 48,000 14,400 1.68 8,571 Total 1,248,000 888,000 374,400 223,333

Stockholders' Equity (Tables)

Stockholders' Equity (Tables)	6 Months Ended
	Jun. 30, 2018
Equity [Abstract]
Schedule of stockholders equity	Shares Warrants Date Total Investment # of shares Price # of warrants Ex Price 11/29/2017 $ 300,000 217,390 $ 1.38 72,000 $ 1.50 12/5/2017 400,000 320,000 $ 1.25 96,000 $ 1.50 12/29/2017 235,000 188,000 $ 1.25 56,400 $ 1.50 Subtotal- 2017 935,000 725,390 224,400 1/9/2018 1,065,000 852,000 $ 1.25 255,600 $ 1.50 Total Offering $ 2,000,000 1,577,390 480,000

Income Taxes (Tables)

Income Taxes (Tables)	6 Months Ended
	Jun. 30, 2018
Income Tax Disclosure [Abstract]
Schedule of provision for (benefit from) income taxes	2018 2017 (unaudited) (unaudited) Current Federal $ — $ — State 2,000 (21,000 ) Prior Year Under accrual Federal — (178,000 ) State — — Total Current Expense 2,000 (199,000 ) Deferred Tax Benefit — --- Valuation Allowance — — Net Provision for (Benefit from) Income Taxes $ 2,000 $ (199,000 )

Segment Reporting (Tables)

Segment Reporting (Tables)	6 Months Ended
	Jun. 30, 2018
Segment Reporting [Abstract]
Schedule of operating segments	Three Months Ended Six Months Ended 2018 2017 2018 2017 (Unaudited) (Unaudited) (Unaudited) (Unaudited) COMPLEX MACHINING Net Sales $ 9,705,000 $ 10,473,000 $ 20,332,000 $ 20,364,000 Gross Profit 1,469,000 939,000 3,492,000 3,840,000 Pre Tax Income (Loss) 657,000 (1,378,000 ) 773,000 (293,000 ) Assets 44,077,000 44,222,000 44,077,000 44,222,000 AEROSTRUCTURES & ELECTRONICS Net Sales 4,844,000 4,733,000 7,720,000 9,053,000 Gross Profit 787,000 1,934,000 1,203,000 1,960,000 Pre Tax Income (Loss) 417,000 348,000 (147,000 ) (931,000 ) Assets 13,276,000 19,458,000 13,276,000 19,458,000 TURBINE ENGINE COMPONENTS Net Sales 1,268,000 1,878,000 2,550,000 3,820,000 Gross Profit 55,000 46,000 7,000 (179,000 ) Pre Tax Loss (115,000 ) (669,000 ) (572,000 ) (1,496,000 ) Assets 5,761,000 11,541,000 5,761,000 11,541,000 CORPORATE Net Sales — — — — Gross Profit — — — — Pre Tax Loss (2,337,000 ) (472,000 ) (2,898,000 ) (605,000 ) Assets 288,000 645,000 288,000 645,000 CONSOLIDATED Net Sales 15,817,000 17,084,000 30,602,000 33,237,000 Gross Profit 2,311,000 2,919,000 4,702,000 5,621,000 Gain on Change to Plan of Assets Held for Sale 1,563,000 - 1,563,000 - Pre Tax Income (Loss) 185,000 (2,171,000 ) (1,281,000 ) (3,325,000 ) Provision for (Benefit from) Income Taxes - (199,000 ) 2,000 (199,000 ) Net Income (Loss) 185,000 (1,972,000 ) (1,283,000 ) (3,126,000 ) Assets $ 63,402,000 $ 75,866,000 $ 63,402,000 $ 75,866,000

Formation and Basis of Presen23

Formation and Basis of Presentation (Details) - USD ($)	Jan. 27, 2017	Jan. 01, 2016	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Formation and Basis of Presentation (Textual)
Income (loss) from operations			$ 973,000	$ (1,198,000)	$ 267,000	$ (1,717,000)	$ (12,758,000)
Net (losses)			$ 185,000	$ (1,972,000)	(1,283,000)	$ (3,126,000)	$ (22,551,000)
Purchase price	$ 4,500,000
Net of a working capital adjustment	$ 163,000
Equity payments, description	Additional quarterly payments, not to exceed $ 1,500,000, equal to five percent (5%) of Net Revenues of AMK commencing April 1, 2017.
Gain on the sale of AMK					200,000
The proceeds of the sale of AMK					1,700,000
Outstanding revolving advances					1,800,000
Outstanding accounts payable					500,000
Sold in excess of debt and equity securities		$ 31,000,000			$ 8,860,000

Summary of Significant Accoun24

Summary of Significant Accounting Policies (Details) - USD ($)	Jun. 30, 2018	Dec. 31, 2017
Accounting Policies [Abstract]
Raw Materials	$ 14,383,000	$ 13,936,000
Work In Progress	19,715,000	20,504,000
Finished Goods	10,963,000	10,636,000
Inventory Reserve	(6,016,000)	(5,871,000)
Total Inventory	$ 39,045,000	$ 39,205,000

Summary of Significant Accoun25

Summary of Significant Accounting Policies (Details 1)	3 Months Ended			6 Months Ended
	Jun. 30, 2018		Jun. 30, 2017	Jun. 30, 2018		Jun. 30, 2017
Accounting Policies [Abstract]
Customer 1 percentage of sales	26.10%		16.70%	26.60%		19.40%
Customer 2 percentage of sales	19.60%		23.50%	22.60%		16.70%
Customer 3 percentage of sales		[1]	17.00%		[1]	17.40%
[1]	Customer was less than 10% of sales at June 30, 2018.

Summary of Significant Accoun26

Summary of Significant Accounting Policies (Details 2)	Jun. 30, 2018		Dec. 31, 2017
Accounting Policies [Abstract]
Customer 1 percentage of receivables	38.50%		30.30%
Customer 2 percentage of receivables	11.30%		10.50%
Customer 3 percentage of receivables		[1]	14.70%
[1]	Customer was less than 10% of gross accounts receivable at June 30, 2018.

Summary of Significant Accoun27

Summary of Significant Accounting Policies (Details 3) - shares	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Accounting Policies [Abstract]
Weighted average shares outstanding used to compute basic earnings per share	26,013,426	7,650,165	26,057,062	7,650,165
Effect of dilutive stock options and warrants	65,951
Weighted average shares outstanding and dilutive securities used to compute dilutive earnings per share	26,079,377	7,650,165	26,057,062	7,650,165

Summary of Significant Accoun28

Summary of Significant Accounting Policies (Details 4) - shares	Jun. 30, 2018	Jun. 30, 2017
Stock Options	695,000
Warrants	480,000	85,000
Anti dilutive Securities	1,175,000	85,000
Anti-dilutive [Member]
Convertible Preferred Stock		2,631,000
Stock Options	349,000	516,000
Warrants	1,480,000	979,000
Anti dilutive Securities	1,829,000	4,126,000

Summary of Significant Accoun29

Summary of Significant Accounting Policies (Details Textual)	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2018USD ($)Customer / Customers	Jun. 30, 2017USD ($)Customer / Customers	Jun. 30, 2018USD ($)Customer / Customers	Jun. 30, 2017USD ($)Customer / Customers	Dec. 31, 2017USD ($)
Summary of Significant Accounting Policies (Textual)
Percentage of inventory valuation	50.00%		50.00%
Goodwill	$ 272,000		$ 272,000		$ 272,000
Stock based compensation			225,000	$ (73,000)
Assets held for sale
Gain on assets held for sale	1,563,000		1,563,000		1,563,000
Accounts receivable, net of allowance for doubtful accounts	9,863,000		9,863,000		7,681,000
Inventory, net of reserves	39,045,000		39,045,000		39,205,000
Prepaid and other assets	414,000		414,000		332,000
Property and equipment, net of accumulated depreciation	9,996,000		9,996,000		10,928,000
Accounts payable and accrued expenses	12,858,000		12,858,000		14,571,000
Deferred revenue	929,000		929,000		1,452,000
Notes payable & capital lease obligations	25,432,000		25,432,000		23,143,000
Deferred rent	1,325,000		1,325,000		1,322,000
Wmi Group [Member]
Summary of Significant Accounting Policies (Textual)
Assets held for sale					10,082,000
Liabilities directly associated to assets held for sale					2,795,000
Accounts receivable, net of allowance for doubtful accounts					2,217,000
Inventory, net of reserves					8,065,000
Prepaid and other assets					485,000
Property and equipment, net of accumulated depreciation					878,000
Accounts payable and accrued expenses					3,701,000
Deferred revenue					521,000
Notes payable & capital lease obligations					11,000
Deferred rent					125,000
ECC [Member]
Summary of Significant Accounting Policies (Textual)
Goodwill	109,000		109,000		109,000
NTW [Member]
Summary of Significant Accounting Policies (Textual)
Goodwill	$ 163,000		$ 163,000		$ 163,000
Total net sales [Member]
Summary of Significant Accounting Policies (Textual)
Concentration Risks	45.70%	57.20%	49.20%	53.50%
Number of Customers | Customer / Customers	2	3	2	3
Accounts receivable [Member]
Summary of Significant Accounting Policies (Textual)
Concentration Risks			49.80%	55.50%
Number of Customers | Customer / Customers			2	3

Property and Equipment (Details

Property and Equipment (Details) - USD ($)	6 Months Ended
	Jun. 30, 2018	Dec. 31, 2017
Total Property and Equipment	$ 33,074,000	$ 32,562,000
Less: Accumulated Depreciation	(23,078,000)	(21,634,000)
Property and Equipment, net	9,996,000	10,928,000
Leasehold Improvements [Member]
Total Property and Equipment	$ 997,000	997,000
Property Plant And Equipment Useful Life	Term of Lease
Machinery and Equipment [Member]
Total Property and Equipment	$ 13,430,000	13,414,000
Machinery and Equipment [Member] | Minimum
Property Plant And Equipment Useful Life	5 years
Machinery and Equipment [Member] | Maximum [Member]
Property Plant And Equipment Useful Life	8 years
Capital Lease Machinery and Equipment [Member]
Total Property and Equipment	$ 6,534,000	6,534,000
Capital Lease Machinery and Equipment [Member] | Minimum
Property Plant And Equipment Useful Life	5 years
Capital Lease Machinery and Equipment [Member] | Maximum [Member]
Property Plant And Equipment Useful Life	8 years
Tools and Instruments [Member]
Total Property and Equipment	$ 9,029,000	8,538,000
Tools and Instruments [Member] | Minimum
Property Plant And Equipment Useful Life	1 year 6 months
Tools and Instruments [Member] | Maximum [Member]
Property Plant And Equipment Useful Life	7 years
Furniture and Fixtures [Member]
Total Property and Equipment	$ 443,000	438,000
Furniture and Fixtures [Member] | Minimum
Property Plant And Equipment Useful Life	5 years
Furniture and Fixtures [Member] | Maximum [Member]
Property Plant And Equipment Useful Life	8 years
Computers and Software [Member]
Total Property and Equipment	$ 519,000	519,000
Computers and Software [Member] | Minimum
Property Plant And Equipment Useful Life	4 years
Computers and Software [Member] | Maximum [Member]
Property Plant And Equipment Useful Life	6 years
Automotive Equipment [Member]
Total Property and Equipment	$ 172,000	172,000
Property Plant And Equipment Useful Life	5 years
Buildings and Improvements [Member]
Total Property and Equipment	$ 1,650,000	1,650,000
Property Plant And Equipment Useful Life	31 years 6 months
Land [Member]
Total Property and Equipment	$ 300,000	$ 300,000

Property and Equipment (Detai31

Property and Equipment (Details Textual) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Property and Equipment (Textual)
Depreciation expense	$ 722,000	$ 714,000	$ 1,444,000	$ 1,442,000
Accumulated depreciation	$ 4,246,000		$ 4,246,000		$ 3,595,000

Intangible Assets (Details)

Intangible Assets (Details) - USD ($)	6 Months Ended
	Jun. 30, 2018	Dec. 31, 2017
Total Intangible Assets	$ 4,975,000	$ 4,975,000
Less: Accumulated Amortization	(4,975,000)	(4,975,000)
Intangible Assets, net
Customer Relationships [Member]
Total Intangible Assets	$ 4,925,000	4,925,000
Customer Relationships [Member] | Minimum [Member]
Intangible asset useful life	5 years
Customer Relationships [Member] | Maximum [Member]
Intangible asset useful life	14 years
Non-Compete [Member]
Total Intangible Assets	$ 50,000	$ 50,000
Intangible asset useful life	5 years

Intangible Assets (Details Text

Intangible Assets (Details Textual) - USD ($)	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
Goodwill and Intangible Assets Disclosure [Abstract]
Expense for amortization of the intangibles	$ 457,000	$ 581,000

Notes Payable and Capital Lea34

Notes Payable and Capital Lease Obligations (Details) - USD ($)	Jun. 30, 2018	Dec. 31, 2017
Notes and Loans Payable [Abstract]
Revolving credit note payable to PNC Bank N.A. ("PNC")	$ 19,253,000	$ 16,455,000
Term loans, PNC	2,733,000	3,471,000
Capital lease obligations	2,439,000	3,085,000
Related party notes payable, net of debt discount	3,025,000	1,912,000
Convertible notes payable-third parties, net of debt discount	2,244,000	1,930,000
Subtotal	29,694,000	26,853,000
Less: Current portion of notes and capital obligations	(26,674,000)	(23,405,000)
Notes payable and capital lease obligations, net of current portion	$ 3,020,000	$ 3,448,000

Notes Payable and Capital Lea35

Notes Payable and Capital Lease Obligations (Details 1)	Jun. 30, 2018USD ($)
For the twelve months ending
June 30, 2019	$ 1,478,000
June 30, 2020	1,255,000
PNC Term Loans payable	2,733,000
Less: Current portion	(2,733,000)
Long-term portion

Notes Payable and Capital Lea36

Notes Payable and Capital Lease Obligations (Details 2)	Jun. 30, 2018USD ($)
For the twelve months ending
June 30, 2019	$ 1,344,000
June 30, 2020	1,050,000
June 30, 2021	151,000
June 30, 2022	39,000
June 30, 2023
Thereafter
Total future minimum lease payments	2,584,000
Less: imputed interest	(145,000)
Less: current portion	(1,244,000)
Total Long Term Portion	$ 1,195,000

Notes Payable and Capital Lea37

Notes Payable and Capital Lease Obligations (Details 3)	6 Months Ended
	Jun. 30, 2018USD ($)$ / sharesshares
Gross Proceeds	$ 1,248,000
Promissory Note	888,000
Related party advances and notes payable	$ 374,400
Related party advances and notes payable, shares | shares	223,333
3/29/2018 [Member]
Gross Proceeds	$ 1,000,000
Promissory Note	700,000
Related party advances and notes payable	$ 300,000
Common Stock Price | $ / shares	$ 1.68
Related party advances and notes payable, shares | shares	178,571
4/4/2018 [Member]
Gross Proceeds	$ 100,000
Promissory Note	70,000
Related party advances and notes payable	$ 30,000
Common Stock Price | $ / shares	$ 1.68
Related party advances and notes payable, shares | shares	17,857
5/21/2018 [Member]
Gross Proceeds	$ 100,000
Promissory Note	70,000
Related party advances and notes payable	$ 30,000
Common Stock Price | $ / shares	$ 1.64
Related party advances and notes payable, shares | shares	18,334
5/21/2018 [Member]
Gross Proceeds	$ 48,000
Promissory Note	48,000
Related party advances and notes payable	$ 14,400
Common Stock Price | $ / shares	$ 1.68
Related party advances and notes payable, shares | shares	8,571

Notes Payable and Capital Lea38

Notes Payable and Capital Lease Obligations (Details Textual) - USD ($)

Jan. 01, 2016

May 31, 2018

May 18, 2018

Jan. 31, 2018

Nov. 30, 2017

Jun. 19, 2017

Jun. 19, 2017

Mar. 21, 2017

Jun. 30, 2018

Jun. 30, 2017

Dec. 31, 2017

May 30, 2018

Apr. 04, 2018

Mar. 29, 2018

Feb. 28, 2017

Jun. 30, 2016

Notes Payable and Capital Lease Obligations (Textual)

Balance due under revolving loan

$ 16,455,000

Interest expense related to credit facilities

$ 693,000

$ 986,000

Capital lease obligations

2,439,000

3,073,000

Debt and equity financings

$ 31,000,000

8,860,000

Initial principal amount

196,940

Term loan

$ 2,856,000

Revolving loan

20,000,000

Fee amount

$ 125,000

Outstanding amount under the revolving loan, inclusive of excess advance

$ 19,253,000

16,455,000

Loan facility, description

The Fifteenth Amendment to the Loan Facility, which waived the failure to comply with the minimum EBITDA covenant for the periods ended December 31, 2016 and March 31, 2017 and the Capital Expenditures covenant for the period ended December 31, 2016. The amendment also requires that we maintain at all times a Fixed Charge Coverage Ratio, tested quarterly on a consolidated basis beginning September 30, 2017, as follows: (i) 1.00 to 1.00 for the quarter ending September 30, 2017, tested based upon the prior three (3) months, (ii) 1.05 to 1.00 for the quarter ending December 31, 2017, tested based upon the prior six (6) months and (iii) 1.05 to 1.00 for the quarter ending March 31, 2018, tested based upon the prior nine months and that we maintain EBITDA of not less than $345,000 for the period ending September 30, 2017

T he revolving loan and the term loan now bear interest at (a) the sum of the Alternate Base Rate plus three percent (3%) with respect to Domestic Rate Loans, and (b) the sum of the Eurodollar rate plus four and one-half percent (4.5%) with respect to Eurodollar Rate Loans. Both the revolving loan and the term loan mature on December 31, 2018 and are classified with the current portion of notes and capital lease obligations.

Coverage ratio, description

As of June 30, 2018, we had outstanding $4,775,000 principal amount of 8% Notes, of which $2,575,000 principal amount is due on November 30, 2018 and $2,200,000 principal amount is due on February 28, 2019.

Line of credit facility payment

$ 2,244,071

Line of credit PNC's counsel fees

50,000

Revolving credit loan debt to PNC

21,986,000

19,926,000

Revolving credit loan term amount

2,733,000

3,471,000

Placement agent fee equal amount

$ 160,000

Placement invested percentage

8.00%

Related party advances and notes payable, net of debt discounts

$ 3,025,000

$ 1,912,000

Common Stock issued

374,400

Notes payable percentage

8.00%

8.00%

Additional investors

$ 100,000

$ 150,000

Sixteenth Amendment [Member]

Notes Payable and Capital Lease Obligations (Textual)

Coverage ratio, description

The Sixteenth Amendment imposes minimum EBITDA (as defined in the Loan Agreement) covenants of not less than (i) $75,000 for the three-month period ending March 31, 2018, (ii) $485,000 for the six month period ending June 30, 2018, and (iii) $1,200,000 for the nine-month period ending September 30, 2018.

Subordinated Convertible Notes [Member]

Notes Payable and Capital Lease Obligations (Textual)

Sale of principle convertible note interest rate

8.00%

Private Placement [Member]

Notes Payable and Capital Lease Obligations (Textual)

Received gross proceeds

$ 2,000,000

Michael Taglich [Member]

Notes Payable and Capital Lease Obligations (Textual)

Received gross proceeds

$ 1,950,000

Common stock purchased, shares

144,927

Common stock warrants to purchase

48,000

Common stock purchase price

$ 200,000

Advanced from related parties

$ 1,000,000

Robert [Member]

Notes Payable and Capital Lease Obligations (Textual)

Received gross proceeds

1,950,000

Common stock purchased, shares

72,463

Common stock warrants to purchase

24,000

Common stock purchase price

$ 100,000

Advanced from related parties

$ 100,000

Taglich Brothers, Inc., [Member]

Notes Payable and Capital Lease Obligations (Textual)

Initial principal amount

$ 382,000

2019 Notes [Member]

Notes Payable and Capital Lease Obligations (Textual)

Aggregate principal amount

$ 1,200,000

Subordinated Notes Maturity Date

May 31, 2019

Common Stock issued

$ 215,062

Related party notes payable allocated percentage, description

Seventy percent (70%) of the total purchase price for the 2019 Notes and Shares purchased by each investor has been allocated to the 2019 Notes with the remaining thirty percent (30%) allocated to the Shares purchased with the 2019 Notes.

Notes payable percentage

1.00%

Accrued interest on notes payable

1.25%

Placement agent fee

4.00%

2019 Notes [Member] | Michael Taglich [Member]

Notes Payable and Capital Lease Obligations (Textual)

Aggregate principal amount

$ 1,000,000

Common Stock issued

178,571

Total purchase price

1,000,000

2019 Notes [Member] | Robert [Member]

Notes Payable and Capital Lease Obligations (Textual)

Aggregate principal amount

100,000

Common Stock issued

17,857

Total purchase price

1,000,000

Other accredited investor [Member] | Michael Taglich [Member]

Notes Payable and Capital Lease Obligations (Textual)

Aggregate principal amount

100,000

Common Stock issued

18,634

Total purchase price

$ 100,000

Minimum

Notes Payable and Capital Lease Obligations (Textual)

Line of credit facility payment

$ 25,000

Capital lease obligations interest rates

4.00%

4.00%

Maximum [Member]

Notes Payable and Capital Lease Obligations (Textual)

Line of credit facility payment

$ 100,000

Capital lease obligations interest rates

14.00%

14.00%

Notes Payable and Capital Lea39

Notes Payable and Capital Lease Obligations (Details Textual 1) - USD ($)	4 Months Ended	6 Months Ended
	Mar. 21, 2017	Jun. 30, 2018	Feb. 28, 2017	Jun. 30, 2016
Notes Payable and Capital Lease Obligations (Textual)
Debt instrument aggregate principal value		$ 196,940
Outstanding interest, percentage			8.00%	8.00%
Accrued interest payable		$ 1,269,000
Debr instrument interest rate, description		Interest for that quarterly interest payment shall be calculated at the rate of 12% per annum. Upon the occurrence and continuation of an event of default, interest shall accrue at the rate of 12% per annum.
Outstanding face value		$ 5,254,000
Debt instrument principal, description		As of June 30, 2018, we had outstanding $4,775,000 principal amount of 8% Notes, of which $2,575,000 principal amount is due on November 30, 2018 and $2,200,000 principal amount is due on February 28, 2019.
Common stock conversion prices decrease		$ 2.25
Common stock conversion prices increase		$ 4.45
Warrants issued, percentage		8.00%
Warrant, description		Of these warrants, 320,702 warrants may be exercised until November 30, 2021 and 243,307 warrants may be exercised until January 31, 2022.
Taglich Brothers, Inc., [Member]
Notes Payable and Capital Lease Obligations (Textual)
Warrants to purchase common stock, shares	180,977
Debt instrument aggregate principal value	$ 382,000
Private Placements of 8% Subordinated Convertible Notes [Member]
Notes Payable and Capital Lease Obligations (Textual)
Proceeds from receiving of gross	$ 4,775,000
Warrants to purchase common stock, shares	383,080
Private Placements of 8% Subordinated Convertible Notes [Member] | Robert and Michael Taglich [Member]
Notes Payable and Capital Lease Obligations (Textual)
Proceeds from receiving of gross	$ 1,950,000
Percentage of subordinated convertible notes	8.00%
Private Placement [Member]
Notes Payable and Capital Lease Obligations (Textual)
Gross proceeds amount		$ 1,200,000
Minimum [Member]
Notes Payable and Capital Lease Obligations (Textual)
Offerings per share		$ 3
Maximum [Member]
Notes Payable and Capital Lease Obligations (Textual)
Offerings per share		$ 4.53

Stockholders' Equity (Details)

Stockholders' Equity (Details)	6 Months Ended
	Jun. 30, 2018USD ($)$ / sharesshares
Total Investment | $	$ 2,000,000
Number of shares	1,577,390
Number of warrants	480,000
11/29/2017 [Member]
Total Investment | $	$ 300,000
Number of shares	217,390
Price | $ / shares	$ 1.38
Number of warrants	72,000
Ex Price | $ / shares	$ 1.50
12/5/2017 [Member]
Total Investment | $	$ 400,000
Number of shares	320,000
Price | $ / shares	$ 1.25
Number of warrants	96,000
Ex Price | $ / shares	$ 1.50
12/29/2017 [Member]
Total Investment | $	$ 235,000
Number of shares	188,000
Price | $ / shares	$ 1.25
Number of warrants	56,400
Ex Price | $ / shares	$ 1.50
Subtotal- 2017 [Member]
Total Investment | $	$ 935,000
Number of shares	725,390
Price | $ / shares
Number of warrants	224,400
Ex Price | $ / shares
1/9/2018 [Member]
Total Investment | $	$ 1,065,000
Number of shares	852,000
Price | $ / shares	$ 1.25
Number of warrants	255,600
Ex Price | $ / shares	$ 1.50

Stockholders' Equity (Details T

Stockholders' Equity (Details Textual)	Jan. 09, 2018USD ($)Investors / Numbershares	Dec. 29, 2017USD ($)shares	Dec. 05, 2017USD ($)shares	Nov. 29, 2017USD ($)shares	Jul. 19, 2018USD ($)$ / sharesshares	Jun. 30, 2018USD ($)$ / sharesshares	Jun. 30, 2017USD ($)	Dec. 31, 2017USD ($)
Stockholders' Equity (Textual)
Common stock shares offered | shares		725,390	725,390	725,390
Purchase of common stock, shares | shares		224,400	224,400	224,400
Gross proceeds from offering | $		$ 935,000	$ 935,000	$ 935,000		$ 1,425,000
Warrants exercise price, per share | $ / shares						$ 1.50
Warrants exercisable date						Nov. 30, 2022
Common stock issued in lieu of cash payment | shares						123,456
Related party advances and notes payable, net of debt discounts | $						$ 3,025,000		$ 1,912,000
Common stock issued | $						$ 374,400
Description of placement agent fee						For acting as placement agent of the offering, Taglich Brothers, Inc. is entitled to a placement agent fee equal to $27,627.60 (6% of the gross proceeds of the offering), payable at the Company’s option, in cash or shares of Common Stock on the terms sold to the purchasers.
Subsequent Event [Member] | Four accredited investors[Member]
Stockholders' Equity (Textual)
Common stock purchase price per share | $ / shares					$ 1.43
Sale of common stock shares | shares					322,000
Sale of common stock value | $					$ 460,460
Placement Agency Agreement [Member]
Stockholders' Equity (Textual)
Common stock shares offered | shares	852,000			1,600,000
Warrants term				5 years
Purchase of common stock, shares | shares	255,600			24,000
Purchase of common stock, value | $				$ 100,000
Number of accredited investors issued and sold | Investors / Number	35
Gross proceeds from offering | $	$ 1,065,000			$ 2,000,000
Purchase price of shares and warrants	1.25%
Shares and warrants offering, description						In connection with the Offering, Taglich Brothers, Inc., a related party, which acted as placement agent for the sale of the Shares and Warrants, is entitled to a placement agent fee equal to $104,000 (8% of the amounts invested), payable at the Company's option, in cash or additional shares of common stock and warrants having the same terms and conditions as the Shares and Warrants.

Commitments and Contingencies (

Commitments and Contingencies (Details)	Jan. 11, 2017USD ($)
Commitments and Contingencies (Textual)
Past rent arrears received	$ 31,000

Income Taxes (Details)

Income Taxes (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Current
Federal
State			2,000	(21,000)
Prior Year Under accrual
Federal				(178,000)
State
Total Current Expense			2,000	(199,000)
Deferred Tax Benefit
Valuation Allowance
Net Provision for (Benefit from) Income Taxes		$ (199,000)	$ 2,000	$ (199,000)

Income Taxes (Details Textual)

Income Taxes (Details Textual) - USD ($)	1 Months Ended	6 Months Ended
	Jan. 31, 2018	Jun. 30, 2018
Income Taxes (Textual)
Federal income tax benefit		$ 690,000
Minimum
Income Taxes (Textual)
U.S. federal corporate rate	21.00%
Maximum [Member]
Income Taxes (Textual)
U.S. federal corporate rate	35.00%

Segment Reporting (Details)

Segment Reporting (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Net Sales	$ 15,817,000	$ 17,084,000	$ 30,602,000	$ 33,237,000
Gross Profit	2,311,000	2,919,000	4,702,000	5,621,000
Gain on Change to Plan of Assets Held for Sale		(163,000)		288,000
Pre Tax Income (Loss)	185,000	(2,171,000)	(1,281,000)	(3,325,000)
Provision for (Benefit from) Income Taxes		(199,000)	2,000	(199,000)
Net Income (Loss)		(1,972,000)	(276,000)	(3,126,000)
Assets	63,402,000		63,402,000		$ 62,317,000
COMPLEX MACHINING [Member]
Net Sales	9,705,000	10,473,000	20,332,000	20,364,000
Gross Profit	1,469,000	939,000	3,492,000	3,840,000
Pre Tax Income (Loss)	657,000	(1,378,000)	773,000	(293,000)
Assets	44,077,000	44,222,000	44,077,000	44,222,000
AEROSTRUCTURES & ELECTRONICS [Member]
Net Sales	4,844,000	4,733,000	7,720,000	9,053,000
Gross Profit	787,000	1,934,000	1,203,000	1,960,000
Pre Tax Income (Loss)	417,000	348,000	(147,000)	(931,000)
Assets	13,276,000	19,458,000	13,276,000	19,458,000
TURBINE ENGINE COMPONENTS [Member]
Net Sales	1,268,000	1,878,000	2,550,000	3,820,000
Gross Profit	55,000	46,000	7,000	(179,000)
Pre Tax Income (Loss)	(115,000)	(669,000)	(572,000)	(1,496,000)
Assets	5,761,000	11,541,000	5,761,000	11,541,000
CORPORATE [Member]
Net Sales
Gross Profit
Pre Tax Income (Loss)	(2,337,000)	(472,000)	(2,898,000)	(605,000)
Assets	288,000	645,000	288,000	645,000
CONSOLIDATED [Member]
Net Sales	15,817,000	17,084,000	30,602,000	33,237,000
Gross Profit	2,311,000	2,919,000	4,702,000	5,621,000
Gain on Change to Plan of Assets Held for Sale	1,563,000		1,563,000
Pre Tax Income (Loss)	185,000	(2,171,000)	(1,281,000)	(3,325,000)
Provision for (Benefit from) Income Taxes		(199,000)	2,000	(199,000)
Net Income (Loss)	185,000	(1,972,000)	(1,283,000)	(3,126,000)
Assets	$ 63,402,000	$ 75,866,000	$ 63,402,000	$ 75,866,000

Segment Reporting (Details Text

Segment Reporting (Details Textual)	6 Months Ended
	Jun. 30, 2018Segments
Segment Reporting (Textual)
Number of reportable segments	3