Tenax Aerospace and Air Industries Merger Expected to Generate $210M Revenue

Tenax Aerospace Acquisition and Air Industries jointly announced that they have entered into an agreement and plan of merger to combine Tenax's special mission aviation business with Air's precision aerospace manufacturing business. After the merger, the combined company expects to remain listed on the NYSE American under the symbol (AIRI). Based on preliminary and unaudited results for the fiscal year ended December 31, 2025, the combined company would have reported approximately $183.3M of revenue with adjusted EBITDA of approximately $65M. The combined company would have net debt of approximately $380M. Net debt at the anticipated closing of the merger is expected to be up to $30M lower than currently as a result of expected cash flow from operations and the expected sale of Tenax aircraft currently held for sale. Based primarily on Tenax's current contract run rate and excluding the impact of expenses related to Tenax's January refinancing and the merger, the combined company is expected to generate pro-forma 2026 revenues in excess of $210M and adjusted EBITDA in excess of $75M. After the merger, it is expected that the combined company will employ approximately 430 employees. Tom Foley, current chairman of Tenax, is expected to become chairman of the combined companies. At the time of the merger, Air will issue shares of its common stock to holders of Tenax membership units. After the closing, Tenax shareholders are expected to own approximately 95% of Air's outstanding shares while existing Air shareholders are expected to own approximately 5%. In accordance with the merger agreement and concurrent with the merger, two directors of Air will be selected jointly by the current Air board of directors and Tenax. Tenax will select six or more additional directors. The transaction is not conditioned upon the receipt of financing by Tenax. Air's existing indebtedness is expected to be refinanced at closing. The exact number of shares to be issued to Tenax members will be determined based on a calculation of "AIR Net Indebtedness" which will establish the "Debt Adjusted AIR Share Price". Based on Air's preliminary balance sheet as of December 31, 2025, this calculation results in a debt adjusted Air share price of approximately $3.44 per Air share which would result in the issuance of approximately 112.5M shares of Air common stock to Tenax members. The final merger price and resulting ownership percentages will be determined based on AIR Net Indebtedness calculated as of the end of the month-end most recently completed more than 15 days prior to closing. If the average volume weighted price of Air's common stock during the twenty trading days prior to the closing is less than the debt adjusted Air share price, the merger agreement calls for Air to commence a tender offer to acquire up to one million shares of Air's current shareholders' common stock. In addition, on the first anniversary of the merger, shareholders of Air as of the business day immediately prior to the closing of the merger will have a contingent right, subject to specified conditions, to require Air to redeem their remaining shares if the twenty-day volume weighted average price for Air shares preceding such anniversary is less than 107.3% of the debt adjusted Air share price. This redemption right will not be transferable. The transaction remains subject to approval by Air shareholders, customary regulatory filings and U.S. government approvals, and other closing conditions typical for transactions of this size and type. Air's directors and all of its named executive officers have agreed to vote any shares they hold in favor of the merger. The companies currently expect the merger to close before June 30, subject to satisfaction of these closing conditions.