Air T Inc. Enters Material Definitive Agreement

Ticker: AIRTP · Form: 8-K · Filed: May 31, 2024 · CIK: 353184

Sentiment: neutral

Topics: material-agreement, financial-obligation

TL;DR

AIRT just signed a big deal, could be good or bad for cash.

AI Summary

Air T Inc. entered into a material definitive agreement on May 30, 2024, related to a direct financial obligation. The company, previously known as Air Transportation Holding Co Inc and Atlanta Express Airline Corp, is based in Charlotte, NC, and operates in the air courier services industry.

Why It Matters

This filing indicates a significant new financial commitment or obligation for Air T Inc., which could impact its financial health and future operations.

Risk Assessment

Risk Level: medium — Entering into material definitive agreements can introduce new financial obligations or risks that may not be immediately apparent.

Key Players & Entities

FAQ

What type of material definitive agreement did Air T Inc. enter into?

The filing states that Air T Inc. entered into a material definitive agreement on May 30, 2024, which constitutes the creation of a direct financial obligation or an obligation under an off-balance sheet arrangement.

What was Air T Inc. previously known as?

Air T Inc. was formerly known as Air Transportation Holding Co Inc and Atlanta Express Airline Corp.

When was the company's name last changed?

The company's name was last changed from Air Transportation Holding Co Inc on July 3, 1992.

What is Air T Inc.'s primary business?

Air T Inc. operates in the 'AIR COURIER SERVICES' industry, with the Standard Industrial Classification code 4513.

Where is Air T Inc. located?

Air T Inc.'s business and mailing address is 11020 DAVID TAYLOR DRIVE, SUITE 305, CHARLOTTE, NC 28262.

Filing Stats: 1,377 words · 6 min read · ~5 pages · Grade level 11.3 · Accepted 2024-05-31 17:24:41

Key Financial Figures

Filing Documents

01 Entry into a Material Definitive Agreement

Item 1.01 Entry into a Material Definitive Agreement On May 30, 2024, Contrail Aviation Support, LLC ("CAS"), a majority-owned subsidiary Air T, Inc. (the "Company"), entered into a Membership Interest Redemption and Earnout Agreement (the "Redemption Agreement") with OCAS, Inc., a corporation owned by the Chief Executive Officer of CAS, Joe Kuhn (the "Seller"). Pursuant to the Redemption Agreement, CAS agreed to purchase and redeem from the Seller, 16% of its 21% interest in CAS, effective as of April 1, 2024. The purchase price for the redeemed interest is $4,570,000, plus an earnout amount. Interest accrues on the principal amount at an annual rate equal to the 10 year Treasury bond yield plus 375 basis points, compounded monthly. The rate adjusts on each anniversary date of the note. The cash purchase price is payable pursuant to a secured, subordinated promissory note, payable beginning on May 1, 2024 and monthly thereafter for a 12 month period of interest payments only with the outstanding balance amortized and paid over the following three (3) years. The payment obligation under the note may be deferred if CAS' forecast indicates that any payment following the first 12 month period would cause a loan default or a loan default exists. Initially, the payment obligation would revert back to interest only, unless a default exists, in which case no payment would be required. If CAS is unable to make a payment for 12 months, then interest shall cease to accrue. The note is expressly subordinated to the payment in full of all indebtedness of CAS on or prior to the date of the note or thereafter created. Under the Redemption Agreement, the Seller is also entitled to an annual earnout payment in each fiscal year through March 31, 2029 where CAS's Adjusted EBITDA exceeds $7,000,000. The annual payment amount equals 9.14% of CAS' Adjusted EBITDA (as defined in the Redemption Agreement) above $7,000,000 in Adjusted EBITDA. Pursuant to the Redemption Agreement, CAS i

01 Financial Statements and Exhibits

Item 9.01 Financial Statements and Exhibits (d) Exhibits 10.1 Form of Membership Interest Redemption and Earnout Agreement by and between Contrail Aviation Support, LLC and OCAS, Inc. executed May 30, 2024, without schedules. 10.2 Form of Secured Subordinated Promissory Note between Contrail Aviation Support, LLC and OCAS, Inc., executed May 30, 2024. 10.3 Form of Subordinated Security Agreement between Contrail Aviation Support, LLC and OCAS, Inc. executed May 30, 2024. 10.4 Form of Second Amendment to First Amended and Restated Operating Agreement of Contrail Aviation Support, LLC executed May 30, 2024. 10.5 Form of Put and Call Option Agreement by and between Contrail Aviation Support, LLC, OCAS, Inc. and Air T, Inc. executed May 30, 2024, without schedules. 10.6 E xhibit A to Put Option Agreement (Secured Subordinated Prom issory Note) 10.7 Exhibit B to Put Option Agreement (Secured Subordinated Security Agreement) 104 Inline XBRL for the cover page of this Current Report on Form 8-K.

SIGNATURES

SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Date: May 31, 2024 AIR T, INC. By: /s/ Brian Ochocki Brian Ochocki, Chief Financial Officer

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