Air T, Inc. (NASDAQ:AIRT) Files An 8-K Entry into a Material Definitive Agreement

Item1.01

On May2, 2017, Air T, Inc. (the Company) and certain of its
subsidiaries entered into Fourth Amendment dated May2, 2017 (the
Fourth Amendment) with Branch Banking and Trust Company (BBT).
The Fourth Amendment amends the Credit Agreement dated April1,
2015, between the Company, such subsidiaries and BBT (as amended,
the Credit Agreement) to establish a separate $2.4million term
loan facility under the Credit Agreement (the Term Loan). Each of
the Company and such subsidiaries are obligors with respect to
the Term Loan, which matures on May1, 2018, with equal $200,000
installments of principal due monthly, commencing June1, 2017.
Interest on the Term Loan is payable monthly at a per annum rate
equal to 25 basis points above the interest rate applicable to
the $25.0million revolving credit facility governed by the Credit
Agreement, with an initial annual interest rate equal to
One-Month LIBOR
(as such term is defined in the Fourth Amendment) plus 2.25%. The
proceeds of the Term Loan were used to fund the acquisition of
assets described in Item 2.01 hereof. The Term Loan is secured by
the existing collateral securing borrowings under the Credit
Agreement, including such acquired assets.

The Fourth
Amendment also amended the Credit Agreement to provide that the
Consolidated Asset Coverage Ratio covenant set forth in Credit
Agreement will not be measured for the fiscal quarters ending
June30, 2017, September30, 2017 and December31, 2017 and
memorialized the consent of BBT to the acquisition of assets
described in Item 2.01 hereof.

The foregoing
summary of the terms of the Fourth Amendment does not purport to
be complete and is qualified in its entirety by reference to the
Fourth Amendment, which is filed as Exhibit 10.1 hereto and is
incorporated by reference herein.

The information
set forth in Item 2.01 hereof is incorporated herein by
reference.

On May2, 2017, to
an Inventory Purchase Agreement dated May2, 2017 (the Inventory
Purchase Agreement) between AirCo, LLC (the Acquisition
Subsidiary), a North Carolina limited liability company and a
subsidiary of the Company, and Aircraft Instrument and Radio
Company, Incorporated, a Kansas corporation (Airco), Aircraft
Instrument and Radio Services, Inc., a Kansas corporation
(together with Airco, the Sellers), and Martin Potash, the
shareholder of the Sellers (the Shareholder), the Acquisition
Subsidiary completed the purchase of all of the inventory,
accounts receivable and proceeds from the sale of inventory since
April1, 2017 of the Sellers and assumed certain accounts payable,
including costs arising in the ordinary course of business since
April1, 2017, of the Sellers. Prior to such sale transaction, the
Sellers, based in Wichita, Kansas, engaged in the business of
operating, distributing and selling airplane and aviation parts
(the Business).

The consideration
paid by the Acquisition Subsidiary for the acquired assets was
$2,400,000 in cash. In addition, to the Inventory Purchase
Agreement, the Sellers and the Shareholder have agreed to provide
consultation services to the Acquisition Subsidiary with respect
to general background information, business history, or otherwise
respond to questions with respect to the acquired inventory until
May31, 2019 in return for a monthly payment by the Acquisition
Subsidiary.

2

In connection with
the forgoing transaction, on May2, 2017, the Acquisition
Subsidiary entered into an Asset Purchase Agreement dated May2,
2017 (the Asset Purchase Agreement) with the Sellers and the
Shareholder. The Asset Purchase Agreement provides for the
purchase by the Acquisition Subsidiary and the sale by the
Sellers of all of the Sellers other assets related to the
Business as a going concern, other than certain excluded assets
and the assumption by the Acquisition Subsidiary of certain
listed liabilities arising in the ordinary course of the Business
after the closing date. The consideration to be paid by the
Acquisition Subsidiary to the Sellers under the Asset Purchase
Agreement is $1.00. The Asset Purchase Agreement provides that
the closing of the purchase and sale transactions contemplated
under that agreement is to occur on May31, 2017, though the
Acquisition Subsidiary may terminate the Asset Purchase Agreement
if, among other things, its due diligence reveals any reason for
termination prior to closing.

The Inventory
Acquisition Agreement and the Asset Purchase Agreement are filed
as Exhibits 2.1 and 2.2 hereto, respectively, and are
incorporated by reference herein. The Company has not yet
completed its analysis whether the acquisition of assets to the
Inventory Purchase Agreement and the Asset Purchase Agreement
constitutes the acquisition of a significant amount of assets
within the meaning of Item 2.01 of Form 8-K. Accordingly, the
filing of this report shall not be deemed to be an admission that
the acquisition of assets to such agreements constitutes the
acquisition of a significant amount of assets within the meaning
of Item 2.01 of Form 8-K.

Information
included in Item 1.01 is hereby incorporated by reference.

3

About Air T, Inc. (NASDAQ:AIRT)

Air T, Inc. is a holding company. The Company operates through five segments: overnight air cargo, ground equipment sales, ground support services, printing equipment and maintenance, and leasing. The company’s overnight air cargo segment operates in the air express delivery services industry. The ground equipment sales segment manufactures and provides mobile deicers and other specialized equipment products to passenger and cargo airlines, airports, the United States military and industrial customers. The ground support services segment provides ground support equipment maintenance and facilities maintenance services to domestic airlines and aviation service providers. The printing equipment and maintenance segment designs, manufactures and sells advanced digital print production equipment, maintenance contracts, spare parts, supplies and consumable items for these systems. The Company’s leasing segment provides funding for equipment leasing transactions.

Air T, Inc. (NASDAQ:AIRT) Recent Trading Information

Air T, Inc. (NASDAQ:AIRT) closed its last trading session up +0.50 at 20.00 with 0 shares trading hands.