{"url_path":"/sec/airi/10-k/2026/item-13","section_key":"item-13","section_title":"Item 13 CERTAIN RELATIONSHIPS AND RELATED","topic":"sec","document":{"doc_type":"10-K","doc_date":"2026-03-27","source_url":"https://www.sec.gov/Archives/edgar/data/1009891/0001213900-26-035731-index.html","accession_number":"0001213900-26-035731","cik":"0001009891","ticker":"AIRI","issuer_name":"AIR INDUSTRIES GROUP","edgar_url":"https://www.sec.gov/Archives/edgar/data/1009891/0001213900-26-035731-index.html","primary_entity_key":"0001009891","primary_entity_name":"AIR INDUSTRIES GROUP"},"word_count":509,"has_tables":true,"body_markdown":"**ITEM 13. CERTAIN RELATIONSHIPS AND RELATED\nTRANSACTIONS AND DIRECTOR INDEPENDENCE**\n\n \n\n**Our Policy Concerning Transactions with Related Persons**\n\n \n\nUnder Item 404 of SEC Regulation\nS-K, a related person transaction is any actual or proposed transaction, arrangement or relationship or series of similar transactions,\narrangements or relationships, including those involving indebtedness not in the ordinary course of business, to which we or our subsidiaries\nwere or are a party, or in which we or our subsidiaries were or are a participant, in which the amount involved exceeded or exceeds the\nlesser of $120,000 or one percent of the average of our total assets at year-end for the last two completed fiscal years and in which\nany of our directors, nominees for director, executive officers, beneficial owners of more than 5% of any class of our voting securities\n(a “significant shareholder”), or any member of the immediate family of any of the foregoing persons, had or will have a direct\nor indirect material interest.\n\n \n\nWe recognize that transactions\nbetween us and any of our Directors or Executives or with a third party in which one of our officers, directors or significant shareholders\nhas an interest can present potential or actual conflicts of interest and create the appearance that our decisions are based on considerations\nother than the best interests of our Company and stockholders.\n\n \n\n \n\n44\n\n \n\n \n\nThe Audit Committee of the\nBoard of Directors is charged with responsibility for reviewing, approving and overseeing any transaction between the Company and any\nrelated person (as defined in Item 404 of Regulation S-K), including the propriety and ethical implications of any such transactions,\nas reported or disclosed to the Committee by the independent auditors, employees, officers, members of the Board of Directors or otherwise,\nand to determine whether the terms of the transaction are not less favorable to us than could be obtained from an unaffiliated party.\n\n \n\nThere were no transactions\ncompleted by us since January 1, 2025, in which the amount involved exceeded $120,000 and in which any related person has a direct\nor indirect material interest except that during 2025, we repaid $1,041,000 of subordinate notes and we incurred interest expense of\n$356,000 in respect of the subordinated notes held by Michael Taglich, Robert Taglich and certain of their affiliates. As of\nDecember 31, 2025, Michael Taglich and Robert Taglich held subordinated notes in the aggregate\nprincipal amount of $4,871,000 as a result of transactions entered into prior to January 2025. Of the $4,871,000, approximately\n$2,519,000 bears an annual rate of interest of 6%, $1,802,000 bears an annual rate of 7% and $550,000 bears an annual interest rate\nof 12%. Of the $4,871,000, approximately $2,519,000 can be converted at the option of the holder into our common stock at $15.00 per\nshare and $1,802,000 can be converted at the option of the holder into our common stock at $9.30 per share. The remaining $550,000\nis not convertible.\n\n \n\nThere are no transactions\ncurrently proposed by us in which a related party has a direct or indirect financial interest in which the amount involved exceeds $120,000."}