(1) In November 2016, the FASB issued ASU No. 2016-18, Restricted Cash, which requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. We adopted this new guidance as of April 1, 2018. The adoption of this new guidance did not have a material effect on our financial condition or results of operations.

~~Extension periods~~

~~So long as no Debenture Event of Default (as defined herein) has occurred and is continuing, the Company will have the right, at any time on or after, [•]~~

specified debt securities or to issue any securities other than the trust securities or to incur any other indebtedness. The Trust will not carry on any active business operations.

The Trust’s business and affairs are conducted by the trustees. The Trust has a Delaware Trustee (the “Delaware Trustee”), two administrative trustees (each, an “Administrative Trustee” and, collectively, the “Administrative Trustees”) and a Property Trustee (the “Property Trustee” and together with the Delaware Trustee and the Administrative Trustees, collectively, the “Trustees”). The Delaware Trustee and the Property Trustee are unaffiliated with us while the Administrative Trustees are employees, officers or affiliates of ours. The Delaware Trustee has its principal place of business in the State of Delaware. Air T, the holder of the Common Securities of the Trust, is entitled generally to appoint, remove or replace any of the trustees and to increase or decrease the number of trustees; provided that the number of trustees is at least three and that at least one trustee is a Property Trustee, one trustee is a Delaware Trustee and one trustee is an Administrative Trustee. If a Debenture Event of Default has occurred and is continuing, the Property Trustee and the Delaware Trustee may be removed at such time by the holders of a majority in Liquidation Amount of the outstanding Trust Preferred Securities. In no event, however, will the holders of the Trust Preferred Securities have the right to vote to appoint, remove or replace the Administrative Trustees, which voting rights are vested exclusively in the Company as the holder of the Common Securities.

The rights of holders of Trust Preferred Securities, including economic rights, rights to information and voting rights, are set forth in the Trust Agreement, as amended, Delaware law and the Trust Indenture Act. The Trust Agreement, as amended also incorporates by reference the Trust Indenture Act.

The Trust is not subject to reporting requirements under the Exchange Act.

As of the date of this prospectus, there are $100,000,000 authorized amount of Trust Preferred Securities, par value $25.00, of which 1,240,085 Trust Preferred Securities are outstanding (includes 200,000 shares held by affiliated entities).

The rights of the holders of Trust Preferred Securities are described in the applicable Trust Agreement, as amended and the Delaware Statutory Trust Act. The principal executive office of the Issuer Trust is located at the Delaware Trust Company, 251 Little Falls Drive, New Castle, DE 19808, and the telephone number of the trust is (828) 464-8741.

RISK FACTORS

An investment in our securities involves significant risks. Before making an investment decision, you should carefully read and consider the risk factors incorporated by reference in this prospectus including specifically the Risk Factors included in the Company’s Annual Report on Form 10-K filed with the Commission on June 27, 2023, as well as those contained in any applicable prospectus supplement, as the same may be updated from time to time by our future filings with the SEC under the Exchange Act. You should also refer to other information contained in or incorporated by reference in this prospectus and any applicable prospectus supplement, including our financial statements and the related notes incorporated by reference herein or therein. Additional risks and uncertainties not presently known to us at this time or that we currently deem immaterial may also materially and adversely affect our business and operations.

Risks Related to the Exchange Offer

Your tender of Shares in exchange for the issuance of the Trust Preferred Securities will not be accepted if you fail to follow the Exchange Offer procedures.

We will issue you Trust Preferred Securities pursuant to the Exchange Offer only after a timely receipt of your Shares, a properly completed and duly executed Letter of Transmittal and all other required documents. Therefore, if you want to tender your Shares in connection with the Exchange Offer, please allow sufficient time to ensure timely processing of your exchange. If we do not receive your Shares, Letter of Transmittal and other required documents by the Expiration Date, we will not accept your Shares in exchange for the issuance of the Trust Preferred Securities. We are generally under no duty to give notification of defects or irregularities with respect to the delivery of your Shares, Letter of Transmittal and other required documents pursuant to the terms of the Exchange Offer. If there are defects or irregularities with respect to your tender of Shares, we may not accept your tender of Shares pursuant to the terms of the Exchange Offer.

Due to the speculative nature of the Trust Preferred Securities, there is no guarantee that the Trust Preferred Securities will ever be profitable for holders of Trust Preferred Securities.

The Trust Preferred Securities offered as part of the Exchange Offer do not confer any rights of common stock ownership on their holders, such as voting rights, but rather merely represent an interest in the Trust. There can be no assurance that the market price of the Trust Preferred Securities will ever equal or exceed current market price of the Trust Preferred Securities, and, consequently, whether it will ever be profitable for holders of the Shares to exchange their Shares.

If holders of Shares have claims against us resulting from their acquisition or ownership of the Shares, they will give up those claims if they tender their Shares in the Exchange Offer.

By tendering the Shares in the Exchange Offer, upon closing of the Exchange Offer, holders of the Shares will be deemed to have released and waived any and all claims they, their successors and their assigns have or may have had against us, our affiliates and their stockholders, and our directors, officers, employees, attorneys, accountants, advisors, agents and representatives, in each case whether current or former, as well as the directors, officers, employees, attorneys, accountants, advisors, agents and representatives of our affiliates and our stockholders, arising from, related to, or in connection with their acquisition or ownership of the Shares, unless those claims arise under federal or state securities laws.

Because it is not possible to estimate the likelihood of their success in pursuing any legal claims or the magnitude of any recovery to which they ultimately might be entitled if such claims exist, it is possible that the consideration that the holders of Shares receive in the Exchange Offer will have a value less than what they own today. Moreover, holders who do not tender their Shares in the Exchange Offer will continue to have the right to prosecute any claims, if any, against us.

Your ability to sell Trust Preferred Securities may be limited.

We cannot assure you as to the liquidity of the market for the Trust Preferred Securities, your ability to sell your Trust Preferred Securities or the price at which you would be able to sell your Trust Preferred Securities.

As a holder of the Trust Preferred Securities, you will not be entitled to any rights with respect to our common stock.

If you hold only our Trust Preferred Securities, you will not be entitled to any rights with respect to our common stock (including, without limitation, voting rights and rights to receive any dividends or other distributions, if any, on our common stock).

Income tax consequences of participation in this Offer to Exchange.

We have not obtained and do not intend to obtain a ruling from the Internal Revenue Service, or IRS, regarding the U.S. federal income tax consequences of the tender of Shares pursuant to the Exchange Offer. You should consult with your own tax advisor with regard to the possibility of any federal, state, local or other tax consequences of this Exchange Offer. See “Exchange Offer – Section 13–Taxation”.

CAPITALIZATION

The following table sets forth (i) the capitalization of the Company as of March 31, 2023, and (ii) the unaudited capitalization of the Company as adjusted to reflect the consummation of the Exchange Offer assuming the exchange of 138,000 shares of Common Stock outstanding as of June 30, 2023 for the maximum number of 193,200 Trust Preferred Securities in the Exchange Offer. The actual number of Trust Preferred Securities issued in the Exchange Offer will vary depending on the number of shares of Common Stock validly tendered and not properly withdrawn.


	At March 31, 2023
	Actual (1) (unaudited)	As adjusted (1) (unaudited)
Long-term debt	$86,349	$90,545

Common stock	757	757
Treasury stock	(4,083)	(8,280)
Additional paid-in capital	728	728
Retained earnings	13,686	13,686
Accumulated other comprehensive loss	816	816
Total Air T, Inc. Stockholders’ Equity	11,904	7,707
(1) The “Actual” column reflects the Company’s Long-term debt and Stockholders’ Equity balances as of March 31, 2023. The “As Adjusted” column assumes the issuance of the maximum number of 193,200 Trust Preferred Securities at the July 21, 2023 closing price of $21.72.

USE OF PROCEEDS

Because this transaction is an offer to holders to exchange their existing Shares for Trust Preferred Securities, there is no source of funds or other cash consideration being paid to us to from those tendering Shares pursuant to the Exchange Offer. We estimate that the total amount of cash required to complete the transactions contemplated by the Exchange Offer, including payment for fractional shares, the payment of any fees, expenses and other related amounts incurred in connection with the transactions will be approximately $50,000. We expect to

have sufficient funds to complete the transactions contemplated by the Exchange Offer and to pay such costs, fees, expenses and other related amounts from our cash on hand.

EXCHANGE OFFER

Section 1 - Number of Shares; Proration.

General. Upon the terms and subject to the conditions of the Exchange Offer, we hereby offer to exchange up to 138,000 Shares of our common stock properly tendered and not properly withdrawn in accordance with Section 4 before the Expiration Date of the Exchange Offer for Trust Preferred Securities, at an exchange ratio of 1.40 Trust Preferred Securities for each validly tendered Share, less any applicable withholding taxes and without interest. See “Exchange Offer - Section 14” for a description of our right to extend, delay, terminate or amend the Exchange Offer. If less than 138,000 Shares (but more than 25,000 Shares) are tendered, we will exchange all of the Shares at the exchange ratio of 1.40 Trust Preferred Securities per Share tendered.

If the Exchange Offer is oversubscribed as described below, Shares tendered will be subject to proration. The proration period and withdrawal rights expire on the Expiration Date. If there is proration, Shares will be rounded up or down to the nearest whole Share.

If we:

(i)

•increase the exchange ratio to above 1.40 Trust Preferred Securities per Share or decrease the exchange ratio to below 1.40 Trust Preferred Securities per Share;

•increase the aggregate number Shares being sought in the Exchange Offer and such increase would result in the prospective exchange of an additional number of Shares exceeding 2% of our outstanding Shares; or

•decrease the aggregate number Shares being sought in the Exchange Offer; and

(ii)

•the Exchange Offer is scheduled to expire at any time earlier than the expiration of a period ending on the tenth business day (as defined below) from, and including, the date that announcement of any such change is first published, sent or given in the manner specified in Section 14,

the Exchange Offer will be extended until the expiration of such period of ten business days. A “business day” means any day other than a Saturday, Sunday or U.S. federal holiday and consists of the time period from 12:01 A.M. through 5:00 P.M., Eastern Time.

THE EXCHANGE OFFER IS CONDITIONED ON A MINIMUM NUMBER OF 25,000 SHARES BEING TENDERED. THE EXCHANGE OFFER IS ALSO SUBJECT TO OTHER CONDITIONS. SEE SECTION 7.

All Shares tendered and not exchanged pursuant to the Exchange Offer, because of proration or otherwise, will be returned to the tendering stockholders or, in the case of Shares delivered by book-entry transfer, credited to the account at the Book-Entry Transfer Facility from which the transfer had previously been made at our expense promptly following the Expiration Date.

Priority of Exchanges. If the terms and conditions of the Exchange Offer have been satisfied or waived and up to 138,000 Shares are properly tendered and not properly withdrawn prior to the Expiration Date, we will exchange up to 138,000 Shares properly tendered and not properly withdrawn.

If the conditions to the Exchange Offer have been satisfied or waived and more than 138,000 Shares have been properly tendered and not properly withdrawn prior to the Expiration Date, we will exchange up to 138,000 properly tendered Shares on the basis set forth below:

•first, subject to the conditional tender provisions described in Section 6, we will exchange all other Shares tendered at the exchange ratio on a pro rata basis with appropriate adjustments to avoid purchases of fractional Trust Preferred Securities, as described below; and

•second, if necessary to permit us to exchange up to 138,000 Shares, shares conditionally tendered (for which the condition was not initially satisfied), will, to the extent feasible, be selected for exchange by random lot. To be eligible for exchange by random lot, stockholders whose Shares are conditionally tendered must have tendered all of their Shares.

Therefore, all of the Shares that a stockholder tenders in the Exchange Offer may not be purchased. It is also possible that none of the Shares conditionally tendered will be exchanged.

Proration. If proration of tendered Shares is required, we will determine the proration factor promptly following the Expiration Date. Proration for each stockholder tendering Shares will be based on the ratio of the number of Shares properly tendered and not properly withdrawn by such stockholder to the total number of Shares properly tendered and not properly withdrawn by all stockholders. If there is proration, Shares will be rounded up or down to the nearest whole Share. The preliminary results of any proration will be announced by press release promptly after the Expiration Date, although we do not expect that we will be able to announce the final proration factor or commence exchange of any Shares pursuant to the Exchange Offer until three to five business days after the Expiration Date because of the difficulty in determining the number of Shares properly tendered and not properly withdrawn. Stockholders may obtain preliminary proration information from the Information Agent and may be able to obtain such information from their brokers.

As described in Section 14, the number of Shares that we will exchange from a stockholder pursuant to the Exchange Offer may affect the U.S. federal income tax consequences to that stockholder and, therefore, may be relevant to a stockholder’s decision whether or not to tender Shares.

This Exchange Offer and the related Letter of Transmittal will be mailed to record holders of Shares and will be furnished to brokers, dealers, commercial banks, trust companies and other nominees whose names, or the names of whose nominees, appear on our stockholder list or, if applicable, who are listed as participants in a clearing agency’s security position listing for subsequent transmittal to beneficial owners of Shares.

Section 2 - Purpose of the Exchange Offer; Certain Effects of the Exchange Offer.

Purpose of the Exchange Offer. Our Board determined that it is in the best interest of the Company to acquire Shares of its common stock and that at this time the Exchange Offer described in this Exchange Offer is a prudent and effective way to do so and to provide value to our stockholders. We believe an exchange offer on the terms provided herein will provide value to our stockholders. Conversely, the Exchange Offer also affords stockholders the option not to participate and, thereby, to increase their relative percentage interest in the Company and its future results. In addition, our Board believes the Exchange Offer provides stockholders with an opportunity to exchange their shares for a security that is traded on a national securities exchange that currently pays an 8.0% annual distribution with respect to all or a portion of their Shares, without potential disruption to the share price and the usual transaction costs inherent in open market purchases and sales. The Board may consider undertaking additional offer(s) based upon a variety of factors, including the performance of the market price for the Shares and the Trust Preferred Securities.

While our Board has authorized the Exchange Offer, it has not, nor has the Company, the Information Agent or the Depositary made, any recommendation to you as to whether you should tender or refrain from tendering your Shares. You must make your own decision as to whether to tender your Shares and, if so, how many Shares to tender. In doing so, you should read carefully all of the information in this Exchange Offer, in the related Letter of Transmittal and in the other exchange offer materials.

Certain Effects of the Exchange Offer. As of June 30, 2023, we had 2,817,754 shares of our common stock outstanding. Assuming that the conditions to the Exchange Offer are satisfied or waived and the Exchange Offer is fully subscribed, we would acquire 138,000 Shares, representing approximately 4.9% of our outstanding Shares as of the date of this Exchange Offer. Stockholders may be able to sell non-tendered Shares in the future on the Nasdaq or otherwise, at a net price higher or lower than the price equivalent to the Exchange Ratio offered in the Exchange Offer. We can give no assurance, however, as to the price at which a stockholder may be able to sell such Shares or Trust Preferred Securities in the future.

The Exchange Offer will reduce our “public float,” which is the number of Shares owned by non-affiliated stockholders and available for trading in the securities markets, and is likely to reduce the number of our

stockholders. These reductions may reduce the volume of trading in our Shares and may result in lower stock prices and reduced liquidity in the trading of our Shares following completion of the Exchange Offer. In addition, the Exchange Offer will increase the proportional ownership of those Company officers and directors who are not participating in the Exchange Offer and any other stockholders who do not participate or participate only in part in the Exchange Offer.

We currently intend to retire any Shares acquire pursuant to the Exchange Offer. Such Shares will be available for us to issue without further stockholder action for all purposes except as required by applicable law and regulation or the rules of the Nasdaq. We have no current plans for the issuance of Shares acquired in this Exchange Offer.

We may, in the future, decide to purchase Shares. Any such purchases may be on the same terms as, or on terms that are more or less favorable to stockholders than, the terms of the Exchange Offer. We and our affiliates will not purchase any Shares or Trust Preferred Securities, other than pursuant to the Exchange Offer, until at least ten business days after the Expiration Date.

Except as otherwise disclosed in this Exchange Offer, neither we nor Air T Funding currently has any plans, proposals or negotiations underway that relate to or would result in:

•any extraordinary transaction, such as a merger, reorganization or liquidation, involving us or any of our subsidiaries;

•any purchase, sale or transfer of a material amount of our or any of our subsidiaries’ assets, except that we continually look for attractive opportunities to monetize portfolio investments, particularly equity investments;

•any material change in our indebtedness or our capitalization, other than with respect to a potential debt offering that the Company may make in the future, subject to approval by the Board;

•any change in our present Board or management, including but not limited to any plans or proposals to change the number or the term of directors or to fill any existing vacancies on our Board or to change any material term of the employment contract of any executive officer;

•any other material change in our corporate structure or business;

•any class of our equity securities ceasing to be authorized to be quoted on the Nasdaq;

•the suspension of our obligation to file reports under Section 15(d) of the Exchange Act;

•the acquisition or disposition by any person of additional securities of the Company, or the disposition of our securities; or

•any changes in our charter, bylaws or other governing instruments or other actions that could impede the acquisition of control of us.

Notwithstanding the foregoing, we reserve the right to change our plans and intentions at any time, as we deem appropriate and we continue to evaluate the risk-reward relative to all options and various investment alternatives, including the Exchange Offer. Specifically we note that:

•We invest principally in niche businesses and businesses related to aviation. The results of these companies can be more volatile than larger more diversified companies, which may materially impact the value of our investment.

•Investors and potential acquirers of the Company may or may not agree with the valuation of our investments and this may impact the ultimate value received by stockholders.

We may also consider a variety of extraordinary transactions, such as a sale of assets or business of the Company, a restructuring, a recapitalization, a special dividend to stockholders, a liquidation or other transaction or series of transactions. Any such transaction could result in proceeds to stockholders at that time above the exchange offer price and/or above the book value of our investments, although there is no assurance (i) that we will engage in

any such transaction, (ii) that any such transaction will be successfully consummated or (iii) that the value of such transaction if consummated will be at or above the exchange offer price or book value.

Section 3 - Procedures for Tendering Shares.

Proper Tender of Shares. For Shares to be tendered properly pursuant to the Exchange Offer:

•the certificates for the Shares or confirmation of receipt of the Shares under the procedure for book-entry transfer set forth below, together with a properly completed and duly executed Letter of Transmittal, including any required signature guarantees, or an Agent’s Message (as defined below) in the case of a book-entry transfer, and any other documents required by the Letter of Transmittal, must be received prior to 5:00 p.m., Eastern Time, in each case by the Expiration Date by the Depositary at the following address:

By mail or courier:
Equiniti Trust Company, LLC
c/o Reorganization Department
6201 15th Avenue
Brooklyn, New York 11219

Notwithstanding any other provisions hereof, Shares tendered and accepted for exchange pursuant to the Exchange Offer will be made only after timely receipt by the Depositary of certificates for such Shares (or a timely confirmation of a book-entry transfer of such Shares into the Depositary’s account at the Book-Entry Transfer Facility), a properly completed and duly executed Letter of Transmittal (or facsimile thereof) with any required signature guarantees, or an Agent’s Message in connection with book-entry delivery, and any other documents required by the Letter of Transmittal.

In accordance with the instructions to the Letter of Transmittal, each stockholder wishing to tender Shares in the Exchange Offer must properly indicate in the Letter of Transmittal that they will accept the 1.40 Trust Preferred Securities per Share Exchange Ratio in accordance with the terms of the Exchange Offer.

STOCKHOLDERS WHO HOLD SHARES THROUGH BROKERS, DEALERS, COMMERCIAL BANKS, TRUST COMPANIES OR OTHER NOMINEES ARE URGED TO CONSULT THEIR BROKERS, DEALERS, COMMERCIAL BANKS, TRUST COMPANIES OR OTHER NOMINEES AS IT IS LIKELY THAT — FOR ADMINISTRATIVE REASONS — THEY HAVE AN EARLIER DEADLINE FOR YOU TO ACT TO INSTRUCT THEM TO PARTICIPATE IN THE EXCHANGE OFFER ON YOUR BEHALF SO THAT THEY CAN MEET THE ABOVE REQUIREMENTS ON A TIMELY BASIS. IN ADDITION, YOU MAY WISH TO DETERMINE WHETHER TRANSACTION COSTS ARE APPLICABLE IF YOU TENDER SHARES THROUGH A BROKER, DEALER, COMMERCIAL BANK, TRUST COMPANY OR OTHER NOMINEE.

Book-Entry Delivery. The Depositary has established an account with respect to the Shares at The Depository Trust Company (“DTC”) (referred to as the “Book-Entry Transfer Facility”) for purposes of the Exchange Offer, and any financial institution that is a participant in the system of the Book-Entry Transfer Facility may make delivery of Shares by causing the Book-Entry Transfer Facility to transfer such Shares into the Depositary’s account in accordance with the procedures of the Book-Entry Transfer Facility. However, although delivery of Shares may be effected through book-entry transfer, a properly completed and duly executed Letter of Transmittal together with any required signature guarantees or an Agent’s Message and any other required documents must, in any case, be received by the Depositary at its address by the Expiration Date. Delivery of the Letter of Transmittal and any other required documents to the Company or the Information Agent or Book-Entry Transfer Facility does not constitute delivery to the Depositary.

The term “Agent’s Message” means a message transmitted by the Book-Entry Transfer Facility to, and received by, the Depositary and forming a part of the book-entry confirmation, stating that the Book-Entry Transfer Facility has received an express acknowledgment from the participant tendering Shares through the Book-Entry Transfer Facility that the participant has received and agrees to be bound by the terms of the Letter of Transmittal and that we may enforce that agreement against that participant.

Method of Delivery. The method of delivery of all documents, including share certificates, is at the election and risk of the tendering stockholder. If delivery is by mail, registered mail with return receipt requested, properly insured, is recommended. Shares will be deemed delivered only when actually received by the Depositary (including in the case of a book-entry transfer, by book-entry confirmation). In all cases, sufficient time should be allowed to ensure timely delivery.

Signature Guarantees. Except as otherwise provided below, all signatures on a Letter of Transmittal must be guaranteed by a financial institution (including most banks, savings and loans associations and brokerage houses) which is a participant in the Securities Transfer Agents Medallion Program (an “Eligible Institution”). Signatures on a Letter of Transmittal need not be guaranteed if (a) the Letter of Transmittal is signed by the registered holder of the shares tendered therewith and such holder has not completed the box captioned “Special Delivery Instructions” or captioned “Special Payment Instructions” in the Letter of Transmittal or (b) such Shares are tendered for the account of an Eligible Institution. See Instructions 1 and 6 of the Letter of Transmittal. If a share certificate is registered in the name of a person other than the person executing a Letter of Transmittal, or if payment is to be made to a person other than the registered holder, then the share certificate must be endorsed or accompanied by an appropriate stock power, in either case signed exactly as the name of the registered holder appears on the certificate, with the signature guaranteed by an Eligible Institution.

U.S. Federal Backup Withholding Tax. To prevent the potential imposition of U.S. federal backup withholding tax on the gross proceeds payable to a tendering holder pursuant to the Exchange Offer, each tendering holder must submit to the Depositary a correct, completed and signed IRS Form W-9 (“Form W-9”) (for U.S. Holders, as defined in Section 14) or IRS Form W-8BEN (“Form W-8BEN”) or IRS Form W-8BEN-E (“Form W-8BEN-E”), IRS Form W-8IMY (“Form W-8IMY”), IRS Form W-8ECI (“Form W-8ECI”), or other applicable IRS Form W-8 (for Non-U.S. Holders, as defined in Section 14), or otherwise establish an exemption from backup withholding. See Section 14 below.

Withholding for Non-U.S. Holders. An applicable withholding agent may withhold U.S. federal income tax on the gross proceeds payable to a Non-U.S. Holder (as defined in Section 14) pursuant to the Exchange Offer at a rate of 30%, unless a reduced rate of withholding is applicable pursuant to an income tax treaty or an exemption from withholding is applicable because such gross proceeds are effectively connected with the Non-U.S. Holder’s conduct of a trade or business within the United States (and, if an income tax treaty applies, the gross proceeds are attributable to a United States permanent establishment maintained by such Non-U.S. Holder). In order to claim a reduction of or an exemption from such withholding tax, a Non-U.S. Holder must deliver to the withholding agent a validly completed and executed Form W-8BEN, W-8BEN-E, W-8IMY, or other applicable Form W-8 (with respect to income tax treaty benefits) or W-8ECI (with respect to amounts effectively connected with the conduct of a trade or business within the United States) claiming such reduction or exemption before the payment is made. A Non-U.S. Holder may be eligible to obtain a refund of all or a portion of any tax withheld (i) if such holder meets the “complete termination,” “substantially disproportionate” or “not essentially equivalent to a dividend” tests described in Section 14 or (ii) if such holder is otherwise able to establish that no or a reduced amount of tax is due. Non-U.S. Holders should consult their tax advisors regarding the particular tax consequences to them of exchanging Shares pursuant to the Exchange Offer, including the application of U.S. federal income tax withholding, their potential eligibility for a withholding tax reduction or exemption, and the refund procedures.

Tender Constitutes an Agreement. The tender of Shares pursuant to any one of the procedures described above will constitute the tendering stockholder’s acceptance of the terms and conditions of the Exchange Offer and an agreement between the tendering stockholder and us upon the terms and subject to the conditions of the Exchange Offer, which agreement will be governed by, and construed in accordance with the laws of the State of New York. In addition, the tender of Shares pursuant to any one of the procedures described above will constitute the tendering stockholder’s representation and warranty to us that: (1) the stockholder has a “net long position” in the Shares or equivalent securities at least equal to the Shares tendered within the meaning of Rule 14e-4 promulgated by the Commission under the Exchange Act; and (2) the tendered Shares are not currently subject to any contractual or other restriction.

It is a violation of Rule 14e-4 under the Exchange Act for a person, directly or indirectly, to tender Shares for his or her own account unless the person so tendering (i) has a net long position equal to or greater than the number of (x) Shares tendered or (y) other securities immediately convertible into, or exercisable or exchangeable for, the number of Shares tendered and will acquire such Shares for tender by conversion, exercise or exchange of such other securities and (ii) will cause such Shares to be delivered in accordance with the terms of the Exchange Offer. Rule 14e-4 under the Exchange Act provides a similar restriction applicable to the tender or guarantee of a tender on behalf of another person.

Determination of Validity; Rejection of Shares; Waiver of Defects; No Obligation to Give Notice of Defects. We will determine all questions as to the Exchange Offer, the form of documents and the validity, eligibility (including time of receipt) and acceptance for exchange of any tender of Shares. We reserve the right to reject any or all tenders of Shares determined by us not to be in proper form, or the acceptance of which or payment for which may, in the opinion of our counsel, be unlawful. We also reserve the right to waive any defect or irregularity in any tender of particular Shares (without waiving such defect or irregularity with respect to any other Shares). No tender of Shares will be deemed to be properly made until all defects and irregularities have been cured or waived. Unless waived, any defects or irregularities in connection with tenders must be cured within such time as

we shall determine. None of the Company, the Depositary, the Information Agent or any other person is or will be under any duty to give notification of any defect or irregularity in tenders or incur any liability for failure to give any such notification.

Return of Unexchanged Shares. If any properly tendered Shares are not exchanged pursuant to the Exchange Offer or are properly withdrawn before the Expiration Date, or if less than all Shares evidenced by a stockholder’s certificates are tendered, certificates for unexchanged Shares will be returned promptly after the expiration or termination of the Exchange Offer or the proper withdrawal of the Shares, as applicable, or, in the case of Shares properly tendered by book-entry transfer at the Book-Entry Transfer Facility, the Shares will be credited to the appropriate account maintained by the tendering stockholder at the Book-Entry Transfer Facility, in each case without expense to the stockholder.

Lost, Stolen, Destroyed or Mutilated Certificates. Stockholders whose certificate or certificates for part or all of their Shares have been lost, stolen, destroyed or mutilated may contact Equiniti Trust Company, LLC, as Transfer Agent for our Shares, at (800) 937-5449 or the address set forth on the back cover of this Exchange Offer for instructions as to obtaining a replacement. The replacement certificate will then be required to be submitted together with the Letter of Transmittal in order to receive Trust Preferred Securities for Shares that are tendered and accepted for exchange. A bond may be required to be posted by the stockholder to secure against the risk that the certificates may be subsequently recirculated. Stockholders are urged to contact the Transfer Agent immediately in order to permit timely processing of this documentation and to determine if the posting of a bond is required.

CERTIFICATES FOR SHARES, TOGETHER WITH A PROPERLY COMPLETED AND DULY EXECUTED LETTER OF TRANSMITTAL OR FACSIMILE THEREOF, OR AN AGENT’S MESSAGE, AND ANY OTHER DOCUMENTS REQUIRED BY THE LETTER OF TRANSMITTAL, MUST BE DELIVERED TO THE DEPOSITARY AND NOT TO US OR THE INFORMATION AGENT. ANY SUCH DOCUMENTS DELIVERED TO US OR THE INFORMATION AGENT WILL NOT BE DEEMED TO BE PROPERLY TENDERED.

Section 4 - Withdrawal Rights.

Tenders of Shares pursuant to the Exchange Offer may be withdrawn at any time prior to the Expiration Date. Thereafter, such tenders are irrevocable except that they may be withdrawn, unless theretofore accepted for exchange as provided in this Exchange Offer. If we extend the period of time during which the Exchange Offer is open, are delayed in accepting for exchanging Shares or are unable to accept for exchange Shares pursuant to the Exchange Offer for any reason, then, without prejudice to our rights under the Exchange Offer, the Depositary may, on our behalf, retain all Shares tendered, and such Shares may not be withdrawn except as otherwise provided in this Section 4, subject to the issuer making the Exchange Offer either paying the consideration offered, or returning the tendered securities, promptly after the termination or withdrawal of the Exchange Offer.

For a withdrawal to be effective, a written or facsimile transmission notice of withdrawal must:

•be timely received by the Depositary at one of its addresses set forth in this Exchange Offer; and

•specify the name of the person who tendered the Shares to be withdrawn, the number of Shares to be withdrawn and the name of the registered holder of the Shares, if different from that of the person who tendered such Shares.

If the Shares to be withdrawn have been delivered to the Depositary, a signed notice of withdrawal with signatures guaranteed by an Eligible Institution (except in the case of Shares tendered by an Eligible Institution) must be submitted prior to the release of such Shares. In addition, such notice must specify, in the case of Shares tendered by delivery of certificates, the name of the registered holder (if different from that of the tendering stockholder) and the serial numbers shown on the particular certificates evidencing the Shares to be withdrawn or, in the case of Shares tendered by book-entry transfer, the name and number of the account at the Book-Entry Transfer Facility to be credited with the withdrawn Shares.

Withdrawals may not be rescinded, and Shares withdrawn will thereafter be deemed not properly tendered for purposes of the Exchange Offer. However, withdrawn Shares may be retendered by following one of the procedures described in Section 3 at any time prior to the Expiration Date.

We will determine all questions as to the form and validity (including time of receipt) of any notice of withdrawal. We also reserve the right to waive any defect or irregularity in the withdrawal of Shares by any stockholder. None of the Company, the Depositary, the Information Agent or any other person will be under any

duty to give notification of any defect or irregularity in any notice of withdrawal or incur any liability for failure to give any such notification.

Section 5 - Exchange of Shares.

On the terms and subject to the conditions of the Exchange Offer, promptly following the Expiration Date, we will accept for exchange and exchange up to 138,000 Shares that are properly tendered at the 1.40 Trust Preferred Securities per Share Exchange Ratio and not properly withdrawn prior to the Expiration Time. For purposes of the Exchange Offer, we will be deemed to have accepted for exchange, subject to the, proration and conditional tender provisions of the Exchange Offer, Shares that are properly tendered at the Trust Preferred Securities per Share Exchange Ratio and not properly withdrawn, only when, as and if we give oral or written notice to the Depositary of our acceptance of the Shares for exchange pursuant to the Exchange Offer.

Upon the terms and subject to the conditions of the Exchange Offer, we will accept for exchange and cause the respective number of Trust Preferred Securities to be issued at the Exchange Ratio per share for all of the Shares accepted for exchange pursuant to the Exchange Offer promptly after the Expiration Date. In all cases, exchange of Shares tendered and accepted for payment pursuant to the Exchange Offer will be made promptly, taking into account any time necessary to determine any proration, but only after timely receipt by the Depositary of (1) certificates for Shares, or a timely book-entry confirmation of the deposit of Shares into the Depositary’s account at DTC, (2) a validly completed and duly executed Letter of Transmittal including any required signature guarantees, or, in the case of a book-entry transfer, an Agent’s Message, and (3) any other required documents.

We will cause Air T Funding to exchange Trust Preferred Securities for Shares exchanged under the Exchange Offer by depositing the number of Trust Preferred Securities necessary to complete the exchange as determined by the Trust Preferred Securities per Share Exchange Ratio with the Depositary, which will act as agent for tendering stockholders for the purpose of receiving Trust Preferred Securities and payment from us for any fractional shares and transmitting the Trust Preferred Securities and delivery and such payment to the tendering stockholders. UNDER NO CIRCUMSTANCES WILL INTEREST ON THE EXCHANGE BE PAID BY US REGARDLESS OF ANY DELAY IN MAKING THE EXCHANGE.

In the event of proration, we will determine the proration factor and exchange tendered Shares accepted for Trust Preferred Securities promptly after the Expiration Date. If there is proration, Shares will be rounded up or down to the nearest whole share. The preliminary results of any proration will be announced by press release promptly after the Expiration Date. Certificates for all Shares tendered and not exchanged, including all Shares not exchanged due to proration, will be returned to the tendering stockholder, or, in the case of Shares tendered by book-entry transfer, will be credited to the account maintained with the Book-Entry Transfer Facility by the participant therein who so delivered the Shares, at our expense, promptly after the Expiration Date or termination of the Exchange Offer. In addition, if certain events occur, we may not be obligated to exchange Shares under the Exchange Offer. See Section 7.

We will pay any stock transfer taxes, if any, payable on the transfer to us of Shares exchanged pursuant to the Exchange Offer. If, however, an exchange of shares is to be made to any person other than the registered holder, or if tendered certificates are registered in the name of any person other than the person signing the Letter of Transmittal, the amount of all stock transfer taxes, if any (whether imposed on the registered holder or the other person), payable on account of the transfer to the person will be deducted from the Exchange Ratio unless satisfactory evidence of the payment of the stock transfer taxes, or exemption therefrom, is submitted. See the Letter of Transmittal.

Section 6 - Conditional Tender of Shares.

In the event of an oversubscription of the Exchange Offer, Shares tendered prior to the Expiration Date will be subject to proration. See Section 1. As discussed in Section 14, the number of Shares to be exchanged from a particular stockholder may affect the U.S. federal income tax treatment of the exchange to the stockholder and the stockholder’s decision whether to tender. Accordingly, a stockholder may tender Shares subject to the condition that a specified minimum number of the stockholder’s Shares tendered pursuant to a Letter of Transmittal must be exchanged if any Shares tendered are exchanged. Any stockholder wishing to make a conditional tender must so indicate in the box entitled “Conditional Tender” in the Letter of Transmittal and indicate the minimum number of Shares that must be exchanged if any are to be exchanged. We urge each stockholder to consult with his, her or its own financial and tax advisors.

After the Expiration Date, if the number of Shares properly tendered and not properly withdrawn pursuant to the Exchange Offer would result in an aggregate total of more than 138,000 Shares, so that we must prorate our acceptance of and payment for tendered Shares, we will calculate a preliminary proration percentage based upon all

Shares properly tendered, conditionally or unconditionally, and not properly withdrawn. If the effect of this preliminary proration would be to reduce the number of Shares to be exchanged from any stockholder tendered pursuant to a Letter of Transmittal below the minimum number specified, the Shares conditionally tendered will automatically be regarded as withdrawn (except as provided in the next paragraph). If there is proration, Shares will be rounded up or down to the nearest whole Share. All Shares tendered by a stockholder subject to a conditional tender and that are withdrawn as a result of proration will be returned at our expense to the tendering stockholder.

After giving effect to these withdrawals, we will accept the remaining Shares properly tendered, conditionally or unconditionally, on a pro rata basis, if necessary. If the withdrawal of conditional tenders would cause the total number of Shares to be exchanged to fall below an aggregate of 138,000, then, to the extent feasible, we will select enough of the Shares conditionally tendered that would otherwise have been withdrawn to permit us to exchange such number of Shares. In selecting among the conditional tenders, we will select by random lot, treating all tenders by a particular stockholder as a single lot, and will limit our exchange in each case to the designated minimum number of Shares to be exchanged. To be eligible for exchange by random lot, stockholders whose Shares are conditionally tendered must have tendered all of their Shares.

Section 7 - Conditions of the Exchange Offer.

Notwithstanding any other provision of the Exchange Offer, we will not be required to accept for exchange or exchange any Shares tendered, and may terminate or amend the Exchange Offer or may postpone the acceptance for exchange of, and the exchange of, Shares tendered, subject to the requirements of the Exchange Act, if at any time on or after _______ ___, 2023 (or such earlier date as may be specified in the relevant condition) and before the Expiration Date any of the following events shall have occurred or are reasonably determined by us to have occurred, that, in the reasonable judgment of our Board and regardless of the circumstances giving rise to such event, makes it inadvisable to proceed with the Exchange Offer or with acceptance for exchange or exchange:

1)less than 25,000 Shares have been properly tendered for exchange;

2)there shall have been threatened, instituted or pending any action or proceeding by any government or governmental, regulatory or administrative agency, authority or tribunal or any other person, domestic or foreign, before any court, authority, agency or tribunal that directly or indirectly (i) challenges the making of the Exchange Offer or the acquisition of some or all of the Shares pursuant to the Exchange Offer or otherwise relates in any manner to the Exchange Offer or (ii) in our reasonable judgment, could materially and adversely affect our and our subsidiaries’ business, condition (financial or otherwise), assets, income, operations or prospects, taken as a whole, or otherwise materially impairs in any way the contemplated future conduct of the business of us and our subsidiaries, taken as a whole, or materially impairs our ability to acquire the Shares in the Exchange Offer;

3)there shall have been any action threatened, pending or taken, or approval withheld, or any statute, rule, regulation, judgment, order or injunction threatened, proposed, sought, promulgated, enacted, entered, amended, enforced or deemed to be applicable to the Exchange Offer or us or any of our subsidiaries, by any court or any authority, agency or tribunal that, in our reasonable judgment, would or is reasonably likely to directly or indirectly (i) make the acceptance for exchange of, or exchange of, some or all of the Shares illegal or otherwise restricts or prohibits completion of the Exchange Offer, (ii) delays or restricts our ability, or renders us unable, to accept for exchange or exchange of some or all of the Shares or (iii) materially and adversely affects our and our subsidiaries’ business, condition (financial or otherwise), assets, income, operations or prospects, taken as a whole, or otherwise materially impairs in any way the contemplated future conduct of the business of us and our subsidiaries;

4)there shall have occurred (i) any general suspension of trading in, or limitation on prices for, securities on any national securities exchange or in the over-the-counter market in the United States, (ii) the declaration of a banking moratorium or any suspension of payments in respect of banks in the United States, (iii) the commencement or escalation of a war, armed hostilities or other international or national calamity directly or indirectly involving the United States or any of its territories, including, but not limited to, an act of terrorism, (iv) any change in the general political, market, economic or financial conditions in the United States or abroad that could, in our reasonable judgment, have a material adverse effect on our and our subsidiaries’ business, condition (financial or otherwise), assets, income, operations or prospects, taken as a whole, or (v) in the case of any of the foregoing existing at the time of the commencement of the Exchange Offer, a material acceleration or worsening thereof;

5)there shall have been a decrease of more than 10% in the market price for the Shares, the Trust Preferred Securities or in the Dow Jones Industrial Average, the New York Stock Exchange Index, the

Nasdaq Composite Index or the Standard and Poor’s 500 Composite Index measured from the close of trading on _______ ___, 2023, the business day prior to the commencement of the Exchange Offer;

6)a tender or exchange offer for any or all of our Shares has been proposed, announced or made by any person or has been publicly disclosed, other than in the ordinary course of business (other than the Exchange Offer); or

7)the registration statement to be filed with the Commission covering the Trust Preferred Securities to be delivered in the Exchange Offer has not been declared effective.

The foregoing conditions are for our sole benefit and may be asserted by us regardless of the circumstances giving rise to any such condition, and may be waived by us, in whole or in part, at any time in our sole discretion before the Expiration Date. Our failure at any time to exercise any of the foregoing rights will not be deemed a waiver of any such right. Each such right is an ongoing right and may be asserted at any time and from time to time. However, once the Exchange Offer has expired, then all of the conditions to the Exchange Offer, other than those requiring necessary governmental approvals, must have been satisfied or waived. In certain circumstances, if we waive any of the conditions described above, we may be required to extend the Exchange Offer. See Section 15.

Section 8 - Price Range of Shares and Trust Preferred Securities; Dividends/Distributions.

The Shares are listed and traded on the Nasdaq under the trading symbol “AIRT.” The following table sets forth, for each of the fiscal periods indicated, the unadjusted daily closing high and low sales prices of the Shares as reported on the Nasdaq.


	Market Price
	High		Low
2021
January 1-March 31	$	34.4	$	20.25
April 1-June 30	$	25	$	21.4
July 1-September 30	$	40.5	$	23.94
October 1-December 31	$	30.41	$	23.24
2022
January 1-March 31	$	28	$	20.4
April 1-June 30	$	21.1	$	14.55
July 1-September 30	$	22.95	$	14.09
October 1-December 31	$	25.81	$	18.71
2023
January 1-March 31	$	27.21	$	19.22
April 1 through July 21, 2023	$	27.8	$	22.35

On July 21, 2023, the last reported sale price of the Shares on Nasdaq was $23.98 per Share.

The Trust Preferred Securities are listed and traded on the Nasdaq under the trading symbol “AIRTP.” The following table sets forth, for each of the fiscal periods indicated, the unadjusted daily closing high and low sales prices of the Shares as reported on the Nasdaq.


	Market Price
	High		Low
2021
January 1-March 31	$	26.75	$	24.31
April 1-June 30	$	26	$	24.35
July 1-September 30	$	25.46	$	24.53
October 1-December 31	$	25.4	$	23.87
2022
January 1-March 31	$	24.19	$	22.25
April 1-June 30	$	23.83	$	20.61
July 1-September 30	$	24.11	$	21.03
October 1-December 31	$	22.97	$	20.5
2023
January 1-March 31	$	24	$	21
April 1 through July 21, 2023	$	23.15	$	18.75

On July 21, 2023, the last reported sale price of the Trust Preferred Securities was $21.72 per Share.

We urge stockholders to obtain current market quotations for the Shares and the Trust Preferred Securities before deciding whether to tender their Shares.

We have never paid dividends on the Shares and we do not expect to pay dividends on the Shares in the foreseeable future.

The distributions payable on the Trust Preferred Securities are fixed at a rate per annum of 8% of the Liquidation Amount of $25.00 per Trust Preferred Securities share, are cumulative and will accrue from the date of issuance. Distributions are payable quarterly in arrears on the 15th day of February, May, August and November of each year (subject to possible deferral as described below). The amount of each distribution due with respect to the Trust Preferred Securities will include amounts accrued through the date the distribution payment is due. Additionally, from time to time the Board may in its sole discretion may declare distributions in addition to the distributions equal to the 8.0% per annum Liquidation Amount of the Trust Preferred Securities. See “Description of Capital Stock.”

So long as no debenture event of default has occurred and is continuing, Air T, Inc. will have the right, at any time on or after June 7, 2024, to defer payments of interest on the Junior Subordinated Debentures issued to Air T Funding by extending the interest payment period thereon for a period not exceeding 20 consecutive quarters with respect to each deferral period (each an “Extension Period”), provided that no Extension Period may extend beyond the Stated Maturity of the Junior Subordinated Debentures. If interest payments are so deferred, Distributions on the Capital Securities will also be deferred and the Company will not be permitted, subject to certain exceptions described herein, to declare or pay any cash distributions with respect to the Company’s capital stock or debt securities that rank ~~pari passu~~ ~~with or junior to the Junior Subordinated Debentures. During an Extension Period, Distributions will continue to accrue with income thereon compounded quarterly.~~

~~Maturity~~

~~The Junior Subordinated Debentures will mature on [•], 2048, which date may be shortened (such date, as it may be shortened, the “Stated Maturity”) to a date not earlier than [•], 2023.~~

~~Redemption~~

At any time on or after [•], 2023, the Capital Securities are subject to mandatory redemption upon repayment of the Junior Subordinated Debentures at maturity or their earlier redemption in an amount equal to the amount of Junior Subordinated Debentures maturing on or being redeemed at a redemption price equal to the aggregate Liquidation Amount of the Capital Securities plus accumulated and unpaid Distributions thereon to the date of redemption. The Junior Subordinated Debentures are redeemable prior to maturity at the option of the Company (i) on or after [•], 2023, in whole at any time or in part from time to time, or (ii) at any time, in whole (but not in part), upon the occurrence and during the continuance of a Tax Event or an Investment Company Event or Capital Treatment Event, in each case at a redemption price equal to 100% of the principal amount of the Junior Subordinated Debentures so redeemed, together with any accrued but unpaid interest to the date fixed for redemption. See “Description of the Capital Securities – Redemption” and “Description of Junior Subordinated Debentures -- Redemption.”

~~Distribution of Junior Subordinated Debentures~~

The Company has the right at any time to terminate Air T Funding and cause the Junior Subordinated Debentures to be distributed to holders of Capital Securities in liquidation of Air T Funding. See “Description of the Capital Securities – Distribution of Junior Subordinated Debentures.”

~~Guarantee~~	Taken together, the Company’s obligations under various documents described herein, including the Guarantee, provide a full guarantee of payments by Air T Funding of distributions and other amounts due on the Capital Securities. Under the Guarantee, the Company guarantees the payment of Distributions by Air T Funding and payments on liquidation of or redemption of the Capital Securities (subordinate to the right to payment of Senior and Subordinated Debt of the Company, as defined herein) to the extent of funds held by Air T Funding. If Air T Funding has insufficient funds to pay Distributions on the Capital Securities (i.e., if the Company has failed to make required payments under the Junior Subordinated Debentures), a holder of the Capital Securities would have the right to institute a legal proceeding directly against the Company to enforce payment of such Distributions to such holder. See “Description of Junior Subordinated Debentures --Securities,” “Description of Junior Subordinated Debentures -- Debenture Events of Default” and “Description of Guarantee.”

~~Ranking~~	~~The Capital Securities will rank~~ ~~pari passu~~, and payments thereon will be made pro rata, with the Common Securities of Air T Funding held by the Company, except as described under “Description of the Capital Securities -- Subordination of Common Securities of Air T Funding held by the Company.” The obligations of the Company under the Guarantee, the Junior Subordinated Debentures and other documents described herein are unsecured and rank subordinate and junior in right of payment to all current and future Senior and Subordinated Debt, the amount of which is unlimited. At September 30, 2018, the aggregate outstanding Senior and Subordinated Debt of the Company was approximately $59.8 million. In addition, because the Company is a holding company, all obligations of the Company relating to the securities described herein will be effectively subordinated to all existing and future liabilities of the Company’s subsidiaries. The Company may cause additional capital securities to be issued by trusts similar to Air T Funding in the future, and there is no limit on the amount of such securities that may be issued. In this event, the Company’s obligations under the junior subordinated debentures to be issued to such other trusts and the Company’s guarantees of the payments by such trusts will rank pari passu with the Company’s obligations under the Junior Subordinated Debentures and the Guarantee, respectively.

~~Voting Rights~~	The holders of the Capital Securities will generally have limited voting rights relating only to the modification of the Capital Securities, the dissolution, winding-up or termination of Air T Funding and certain other matters described herein. See “Description of the Capital Securities -- Voting Rights; Amendment of Trust Agreement.”

~~Proposed NASDAQ National Market Symbol for Capital Securities~~	~~“AIRA”~~

~~Proposed NASDAQ National Market Symbol for Warrants~~	~~“AIRW”~~

~~Use of Proceeds~~	The proceeds to Air T Funding from the sale of the Capital Securities offered hereby will be invested by Air T Funding in the Junior Subordinated Debentures of the Company. The Company intends to use the net proceeds from the issuance of the Junior Subordinated Debentures for general corporate purposes, which may include without limitation possible future acquisitions, funding investments in, or extension of credit to, the Company’s subsidiaries, repayment of maturing obligations and redemption of securities. See “Use of Proceeds.”

~~Risk Factors~~

~~Before investing in our securities, you should carefully read and consider the information set forth in “Risk Factors” beginning on page 12.~~

~~RISK FACTORS~~

An investment in our securities involves a high degree of risk. Before purchasing the securities offered by this prospectus, you should carefully consider the risks, uncertainties and additional information set forth below as well as (i) set forth in our most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Currents Reports on Form 8-K, and our definitive proxy statements, all which are filed with the SEC and incorporated by reference into this prospectus, and (ii) contained herein or in any supplement to this prospectus, including information in any documents subsequently incorporated by reference into this prospectus. The information incorporated by reference into this prospectus specifically includes the risk factors contained in our Annual Report on Form 10-K.

~~For a description of the above-described reports and documents, and information about where you can find them, see~~ “~~Where You Can Find More Information~~” ~~and~~ “~~Incorporation of Certain Documents By Reference.~~” The risks and uncertainties in this prospectus and in the documents presently incorporated by reference in this prospectus are those that we currently believe may materially impact the Company. Additional risks not presently known or are currently deemed immaterial could also materially and adversely affect our financial condition, results of operations, business and prospects.

~~Risks Related to Our Dependence on Significant Customers~~

We are significantly dependent on our contractual relationship with FedEx Corporation, the loss of which would have a material adverse effect on our business, results of operations and financial position.In the fiscal year ended March 31, 2018, 38% of our consolidated operating revenues, and 100% of the operating revenues for our overnight air cargo segment, arose from services we provided to FedEx. While FedEx has been our customer since 1980 under similar terms, our current agreements may be terminated by FedEx upon 90 days’ written notice and FedEx may at any time terminate the lease of any particular aircraft thereunder upon 10 days’ written notice. In addition, FedEx may terminate the dry-lease agreement with MAC or CSA upon written notice if 60% or more of MAC or CSA’s revenue (excluding revenues arising from reimbursement payments under the dry-lease agreement) is derived from the services performed by it pursuant to the respective dry-lease agreement, FedEx becomes its only customer, or it employs less than six employees. As of the date of this report, FedEx would be permitted to terminate each of the new dry-lease agreements under this provision.. The loss of these contracts with FedEx would have a material adverse effect on our business, results of operations and financial position.

~~Changes in our agreements with FedEx subject us to greater operating risks.~~ On June 1, 2015, MAC and CSA entered into new dry-lease agreements with FedEx with terms different from our prior dry-lease service contracts. The dry-lease agreements provide for the lease of specified aircraft by us in return for the payment of monthly rent with respect to each aircraft leased, which monthly rent was increased from the prior dry-lease service contracts to reflect an estimate of a fair market rental rate. The dry-lease agreements provide for the reimbursement by FedEx of our costs, without mark up, incurred in connection with the operation of the leased aircraft for the following: fuel, landing fees, third-party maintenance, parts and certain other direct operating costs. Unlike the prior dry-lease contracts, under the new dry-lease agreements, certain operational costs incurred by us in operating the aircraft are not reimbursed by FedEx at cost, and such operational costs are borne solely by us.

The dry-lease agreements with FedEx provide for the lease of specified aircraft in return for the payment of monthly rent with respect to each aircraft leased. The dry-lease agreements provide for the reimbursement by FedEx of our costs, without mark up, incurred in connection with the operation of the leased aircraft for the following: fuel, landing fees, third-party maintenance, parts and certain other direct operating costs. Certain operational costs incurred by us in operating the aircraft are not reimbursed by FedEx at cost, and such operational costs are borne solely by us. The current dry-lease agreements provide for the payment by FedEx to us of a monthly administrative fee based on the number and type of aircraft leased and routes operated. The amount of the monthly administrative fee under the current dry-lease agreements is greater than under the prior dry-lease service contracts with FedEx, in part to reflect the greater monthly lease payment per aircraft and that certain operational costs are to be borne by MAC and CSA and not reimbursed. Accordingly, as a result in the change in our arrangements with FedEx in 2015, we are subject to the risk of rising operational costs that are not reimbursed to us at cost and may be in excess of the allocable portion of the increased administrative fee, which could adversely affect results of operations. In addition, since MAC and CSA entered into the new dry-lease agreements in 2015, they have periodically entered into amendments to the agreements with FedEx that have adjusted the administrative fees payable under these agreements. These adjustments, which have generally been made on an annual basis, have resulted in annual period-to-period volatility in MAC and CSA’s profitability. Although MAC and CSA have entered into such an amendment effective as of June 1, 2017 which positively affected MAC and CSA’s profitability compared to results for the fiscal year ended March 31, 2017 as discussed within Management’s Discussion and Analysis, future amendments may reduce the administrative fees and accordingly negatively affect MAC and CSA’s profitability.

~~Because of our dependence on FedEx, we are subject to the risks that may affect FedEx~~’~~s operations.~~ Because of our dependence on FedEx, we are subject to the risks that may affect FedEx’s operations. These risks are discussed in “Management’s Discussion and Analysis of Results of Operations and Financial Condition—Risk Factors” in FedEx Corporation’s Annual Report on Form 10-K for the fiscal year ended May 31, 2017. These risks include but are not limited to the following:

●

~~Economic conditions in the global markets in which it operates;~~

	●	~~Dependence on its strong reputation and value of its brand;~~
	●	~~Potential disruption to the Internet and FedEx’s technology infrastructure, including customer websites, including cyberattacks;~~
	●	~~The price and availability of fuel;~~
	●	~~Its ability to manage its assets, including aircraft, to match shifting and future shipping volumes;~~
	●	~~Intense competition from other providers of transportation and business services;~~
	●	~~Changes in governmental regulations that may affect its business;~~
	●	~~Its ability to make prudent strategic acquisitions and realize the expected benefits;~~
	●	~~Its ability to maintain good relationships with its employees and prevent attempts by labor organizations to organize groups of its employees;~~
	●	~~The continued classification of owner-operators in its ground delivery business as independent contractors rather than as employees;~~
	●	~~The impact of the United Kingdom’s planned withdrawal from the European Union;~~
	●	~~The impact of terrorist activities including the imposition of stricter governmental security requirements;~~
	●	~~Regulatory actions affecting global aviation rights or a failure to obtain or maintain aviation rights in important international markets;~~
	●	~~Global climate change or legal, regulatory or market responses to such change;~~
	●	~~Localized natural or man-made disasters in key locations, including its Memphis, Tennessee super-hub;~~
	●	~~Disruptions or modifications in service by the United States Postal Service, a significant customer and vendor of FedEx; and~~
	●	~~Widespread outbreak of an illness or other communicable disease or any other public health crisis.~~

~~A material reduction in the aircraft we fly for FedEx could materially adversely affect our business and results of operations.~~ Under our agreements with FedEx, we are not guaranteed a number of aircraft or routes we are to fly and FedEx may reduce the number of aircraft we lease and operate upon 10 days’ written notice. Our compensation under these agreements, including our administrative fees, depends on the number of aircraft leased to us by FedEx. Any material permanent reduction in the aircraft we operate could materially adversely affect our business and results of operations. A temporary reduction in any period could materially adversely affect our results of operations for that period.

~~Our ground support services segment has been dependent upon the revenues from two significant customers, the loss of which could materially impact the segment~~’~~s results.~~ In the fiscal year ended March 31, 2018, approximately 47% of GAS’s revenues were derived from services under contracts with two customers. The loss of these customers, or a major decline in business activity with these customers, could materially adversely impact the results of the segment.

~~Other Business Risks~~

~~Our business, financial condition and results of operations are dependent upon those of our individual businesses, and our aggregate investment in particular industries.~~ We are a holding company with investments in businesses and assets in a number of industries. Our business, financial condition and results of operations are dependent upon our various businesses and investments. Any material adverse change in one of our businesses or investments, or in a particular industry in which we operate or invest, may cause material adverse changes to our business, financial condition and results of operations. The more capital we devote to a particular investment or industry may increase the risk that such investment could significantly impact our financial condition and results of operations, possibly in a material adverse way.

~~Sales of deicing equipment can be affected by weather conditions.~~ Our deicing equipment is used to deice commercial and military aircraft. The extent of deicing activity depends on the severity of winter weather. Mild winter weather conditions permit airports to use fewer deicing units, since less time is required to deice aircraft in mild weather conditions. As a result, airports may be able to extend the useful lives of their existing units, reducing the demand for new units.

~~Our results of operations may be affected by the value of securities we hold for investment and we may be unable to liquidate our investments in a timely manner at full value.~~ We invest a significant portion of our capital not needed for operations in marketable securities, including equity securities of publicly traded companies. At March 31, 2018, the fair value of these marketable securities was approximately $2.6 million. Our results of operations may be affected by gains or losses recognized upon the sale of these investments or by losses recognized upon the determination that any such investment has become impaired or suffered an “other-than-temporary” impairment. At March 31, 2018, we had gross unrealized gains associated with marketable securities aggregating $36,000 and gross unrealized losses aggregating $69,000.

Any investment with a fair value of less than its cost basis is assessed for possible “other-than-temporary” impairment regularly and at each reporting date. Other-than-temporary impairments of available-for-sale marketable equity securities are recognized in the consolidated statement of income (loss).

On the basis of its June 30, 2016, March 31, 2017 and June 30, 2017 assessments, the Company concluded that it had suffered an “other-than-temporary” impairment in its investment in the common stock of Insignia Systems, Inc. (NASDAQ: ISIG) (“Insignia”). Consistent with the applicable accounting guidance, the Company’s cost basis in the Insignia investment was lowered to $3,604,000 at June 30, 2016, to $2,643,000 at March 31, 2017 and to $1,724,000 at June 30, 2017 to reflect the impairment charges.

On the basis of its December 31, 2017 “other-than-temporary” impairment assessment, the Company concluded that it had suffered an other-than-temporary impairment in its investment in the common stock of Oxbridge Re Holdings Limited (NASDAQ: OXBR) (Oxbridge). The Company’s cost basis in its Oxbridge investment was lowered from $1,516,000 to $727,000 at December 31, 2017 which represents an other-than temporary impairment of $789,000.

~~In addition, from time to time we may hold positions in marketable securities that under then-current market conditions we may be unable to liquidate in a timely manner at full value.~~

~~Our business may be adversely affected by information technology disruptions.~~ Our business may be impacted by information technology disruptions, including information technology attacks. Cybersecurity attacks, in particular, are evolving and include, but are not limited to, malicious software, attempts to gain unauthorized access to data, and other electronic security breaches that could lead to disruptions in systems, unauthorized release of confidential or otherwise protected information and corruption of data (our own or that of third parties). Although we have adopted certain measures to mitigate potential risks to our systems from information technology-related disruptions, given the unpredictability of the timing, nature and scope of such disruptions, we could potentially be subject to production downtimes, operational delays, other detrimental impacts on our operations or ability to provide products and services to our customers, the compromising of confidential or otherwise protected information, misappropriation, destruction or corruption of data, security breaches, other manipulation or improper use of our systems or networks, financial losses from remedial actions, loss of business or potential liability, and/or damage to our reputation, any of which could have a material adverse effect on our business, financial condition, results of operations and cash flows.

~~Labor inflation could impact our profitability.~~ The Company operates in industries that are heavily impacted by the workforce’s labor rates. Significant examples include mechanics and pilots, both of which are exposed to the possibility of material increases in labor costs.

~~Legacy technology systems require a unique technical skillset which is becoming more scarce.~~ The Company deploys legacy technology systems in several significant business units. As technology continues to rapidly change, the available pool of experts technically trained in these legacy systems shrinks. As this scarcity increases, the Company’s ability to efficiently and quickly repair its legacy systems becomes increasingly difficult, which could have a significant impact on the Company’s day-to-day operations.

Future acquisitions and dispositions of our businesses and investments are possible, changing the components of our assets and liabilities, and if unsuccessful or unfavorable, could reduce the value of our securities. Any future acquisitions or dispositions may result in significant changes in the composition of our assets and liabilities, as well as our business mix and prospects. Consequently, our financial condition, results of operations and the trading price of our securities may be affected by factors different from those affecting our financial condition, results of operations and trading price at the present time.

~~We face numerous risks and uncertainties as we expand our business.~~ We expect the growth and development of our business to come primarily from internal expansion and through acquisitions, investments, and strategic partnering. As we expand our business, there can be no assurance that financial controls, the level and knowledge of personnel, operational abilities, legal and compliance controls and other corporate support systems will be adequate to manage our business and growth. The ineffectiveness of any of these controls or systems could adversely affect our business and prospects. In addition, if we acquire new businesses and introduce new products, we face numerous risks and uncertainties integrating their controls and systems, including financial controls, accounting and data processing systems, management controls and other operations. A failure to integrate these systems and controls, and even an inefficient integration of these systems and controls, could adversely affect our business and prospects.

Certain business initiatives, including expansions of existing businesses, may bring us into contact directly or indirectly, with individuals and entities that are not within our traditional client and counterparty base and may expose us to new asset classes and new markets.These business activities expose us to new and enhanced risks, greater regulatory scrutiny of these activities, increased credit-related, sovereign and operational risks, and reputational concerns regarding the manner in which these assets are being operated or held.

~~The failure of our information technology systems could adversely impact our reputation and financial performance.~~ We operate in businesses that are dependent on information systems and technology. Our information systems and technology may not continue to be able to accommodate our growth, and the cost of maintaining such systems may increase from its current level, either of which could have a material adverse effect on us. We rely on third-party service providers to manage certain aspects of our business, including for certain information systems and technology, data processing systems, and the secure processing, storage and transmission of information. Any interruption or deterioration in the performance of these third parties or failures of their information systems and technology could impair the quality of our operations and could adversely affect our business and reputation.

~~We may not be able to insure certain risks economically.~~ We cannot be certain that we will be able to insure all risks that we desire to insure economically or that all of our insurers or reinsurers will be financially viable if we make a claim. If an uninsured loss or a loss in excess of insured limits should occur, or if we are required to pay a deductible for an insured loss, results of operations could be adversely affected.

~~We could experience significant increases in operating costs and reduced profitability due to competition for skilled management and staff employees in our operating businesses.~~ We compete with many other entities for skilled management and staff employees, including entities that operate in different market sectors than us. Costs to recruit and retain adequate personnel could adversely affect results of operations.

~~Legal liability may harm our business.~~ Many aspects of our businesses involve substantial risks of liability, and in the normal course of business, we have been named as a defendant or codefendant in lawsuits involving primarily claims for damages. The risks associated with potential legal liabilities often may be difficult to assess or quantify and their existence and magnitude often remain unknown for substantial periods of time. The expansion of our businesses, including expansions into new products or markets, impose greater risks of liability. In addition, unauthorized or illegal acts of our employees could result in substantial liability. Substantial legal liability could have a material adverse financial effect or cause us significant reputational harm, which in turn could seriously harm our businesses and our prospects. Although our current assessment is that, other than as disclosed in this report, there is no pending litigation that could have a significant adverse impact, if our assessment proves to be in error, then the outcome of litigation could have a significant impact on our financial statements.

Future cash flows from operations or through financings may not be sufficient to enable the Company to meet its obligations, and this would likely have a material adverse effect on its businesses, financial condition and results of operations, and credit market volatility may affect our ability to refinance our existing debt, borrow funds under our existing lines of credit or incur additional debt. There can be no assurances that the Company or its subsidiaries will continue to have access to their lines of credit if their financial performance does not satisfy the financial covenants set forth in the applicable financing agreements. If the Company or its subsidiaries do not meet certain of its financial covenants, and if they are unable to secure necessary waivers or other amendments from the respective lenders on terms acceptable to management, their ability to access available lines of credit could be limited, their debt obligations could be accelerated by the respective lenders and liquidity could be adversely affected.

If the Company’s or its subsidiaries’ cash needs are significantly greater than anticipated or they do not materially meet their business plans, or there are unanticipated downturns in the markets for the Company’s and its subsidiaries’ products and services, the Company or its subsidiaries may be required to seek additional or alternative financing sources. Future disruption and volatility in credit market conditions could have a material adverse impact on the Company’s ability or that of its subsidiaries to refinance debt when it comes due on terms similar to our current credit facilities, or to draw upon existing lines of credit or incur additional debt if needed. There can be no assurance therefore that such financing will be available or available on acceptable terms. The inability to generate sufficient cash flows from operations or through financings could impair the Company’s or its subsidiaries’ liquidity and would likely have a material adverse effect on their businesses, financial condition and results of operations.

Our business strategy includes acquisitions, and acquisitions entail numerous risks, including the risk of management diversion and increased costs and expenses, all of which could negatively affect the Company’~~s profitability.~~ Our business strategy includes, among other things, strategic acquisitions, as well as potential opportunistic acquisitions. This element of our strategy entails several risks, including the diversion of management’s attention from other business concerns and the need to finance such acquisitions with additional equity and/or debt. In addition, once completed, acquisitions entail further risks, including: unanticipated costs and liabilities of the acquired businesses, including environmental liabilities, that could materially adversely affect our results of operations; difficulties in assimilating acquired businesses, preventing the expected benefits from the transaction from being realized or achieved within the anticipating time frame; negative effects on existing business relationships with suppliers and customers; and losing key employees of the acquired businesses. If our acquisition strategy is not successful or if acquisitions are not well integrated into our existing operations, the Company’s profitability could be negatively affected.

~~We may sustain losses in our investment portfolio, which could have an adverse effect on our results of operations, financial condition and liquidity.~~ A portion of our assets consists of investments in available-for-sale securities, which are adjusted to fair value each period, as well as other investments. An adverse change in economic conditions may result in a decline in the value of these investments. Such declines in value of available-for-sale securities will be recognized as losses upon the sale of such securities or if such declines are deemed to be other than temporary. Any adverse changes in the financial markets and resulting declines in value of our investments may result in additional impairment charges and could have an adverse effect on our results of operations, financial condition and liquidity.

~~Newly enacted U.S. government tax reform could have a negative impact on the results of future operations.~~ On December 22, 2017, the U.S. Tax Cuts and Jobs Act (“Tax Cuts and Jobs Act”) was enacted which contained substantial changes to the Code, some of which could have an adverse effect on our business. Among other things, the Tax Cuts and Jobs Act (i) reduces the U.S. corporate income tax rate from 35% to 21% beginning in 2018, (ii) generally will limit annual deductions for interest expense to no more than 30% of our “adjusted taxable income,” plus 100% of our business interest income for the year (iii) will permit a taxpayer to offset only 80% (rather than 100%) of its taxable income with any U.S. net operating losses (“NOLs”) generated after 2017, and (iv) imposes a transition tax on deemed repatriated earnings of our foreign subsidiaries. With the enactment of the Tax Cuts and Jobs Act, our financial results for 2017 included an income tax provision of approximately $58,717 resulting from the transition tax and the revaluation of our U.S. deferred tax assets and liabilities to reflect the recently enacted 21% federal corporate tax rate effective January 1, 2018. The U.S. Department of Treasury has broad authority to issue regulations and interpretative guidance that may significantly impact how we will apply the law and impact our results of operations in the period issued. As additional regulatory guidance is issued by the applicable taxing authorities, as accounting treatment is clarified, as we perform additional analysis on the application of the law, and as we refine estimates in calculating the effect, our final analysis, which will be recorded in the period completed, may be different from our current provisional amounts, which could materially affect our tax obligations and effective tax rate.

~~We are affected by the risks faced by commercial aircraft operators and maintenance, repair and overhaul companies (~~“~~MROs~~”~~) because they are our customers.~~ Commercial aircraft operators are engaged in economically sensitive, highly cyclical and competitive businesses. We are a supplier to commercial aircraft operators and MROs. As a result, we are indirectly affected by all the risks facing commercial aircraft operators and MROs, with such risks being largely beyond our control. Our results of operations depend, in part, on the financial strength of our customers and our customers’ ability to compete effectively in the marketplace and manage their risks.

~~Our engine values and lease rates, which are dependent on the status of the types of aircraft on which engines are installed, and other factors, could decline.~~ The value of a particular model of engine depends heavily on the types of aircraft on which it may be installed and the supply of available engines. We believe values of engines tend to be relatively stable so long as there is sufficient demand for the host aircraft. However, we believe the value of an engine begins to decline rapidly once the host aircraft begins to be retired from service and/or used for spare parts in significant numbers. Certain types of engines may be used in significant numbers by commercial aircraft operators that are currently experiencing financial difficulties. If such operators were to go into liquidation or similar proceedings, the resulting over-supply of engines from these operators could have an adverse effect on the demand for the affected engine types and the values of such engines.

~~Upon termination of a lease, we may be unable to enter into new leases or sell the~~ ~~airframe,~~ ~~engine or its parts on acceptable terms.~~ We directly or indirectly own the engines or aircraft that we lease to customers and bear the risk of not recovering our entire investment through leasing and selling the engines or aircraft. Upon termination of a lease, we seek to enter a new lease or to sell or part-out the engine or aircraft. We also selectively sell engines on an opportunistic basis. We cannot give assurance that we will be able to find, in a timely manner, a lessee or a buyer for our engines or aircraft coming off-lease or for their associated parts. If we do find a lessee, we may not be able to obtain satisfactory lease rates and terms (including maintenance and redelivery conditions) or rates and terms comparable to our current leases, and we can give no assurance that the creditworthiness of any future lessee will be equal to or better than that of the existing lessees of our engines. Because the terms of engine leases may be less than 12 months, we may frequently need to remarket engines. We face the risk that we may not be able to keep our engines on lease consistently.

Failures by lessees to meet their maintenance and recordkeeping obligations under our leases could adversely affect the value of our leased engines and aircraft and our ability to lease the engines and aircraft in a timely manner following termination of the leases. The value and income producing potential of an engine or aircraft depends heavily on it being maintained in accordance with an approved maintenance system and complying with all applicable governmental directives and manufacturer requirements. In addition, for an engine or aircraft to be available for service, all records, logs, licenses and documentation relating to maintenance and operations of the engine or aircraft must be maintained in accordance with governmental and manufacturer specifications.

Our leases make the lessees primarily responsible for maintaining the engines or aircraft, keeping related records and complying with governmental directives and manufacturer requirements. Over time, certain lessees have experienced, and may experience in the future, difficulties in meeting their maintenance and recordkeeping obligations as specified by the terms of our leases.

Our ability to determine the condition of the engines or aircraft and whether the lessees are properly maintaining our assets is generally limited to the lessees’ reporting of monthly usage and any maintenance performed, confirmed by periodic inspections performed by us and third-parties. A lessee’s failure to meet its maintenance or recordkeeping obligations under a lease could result in:

	●	~~a grounding of the related engine or aircraft;~~
	●	~~a repossession that would likely cause us to incur additional and potentially substantial expenditures in restoring the engine or aircraft to an acceptable maintenance condition;~~
	●	~~a need to incur additional costs and devote resources to recreate the records prior to the sale or lease of the engine or aircraft;~~
	●	~~loss of lease revenue while we perform refurbishments or repairs and recreate records; and~~
	●	~~a lower lease rate and/or shorter lease term under a new lease entered into by us following repossession of the engine or aircraft.~~

Any of these events may adversely affect the value of the engine, unless and until remedied, and reduce our revenues and increase our expenses. If an engine is damaged during a lease and we are unable to recover from the lessee or though insurance, we may incur a loss.

~~Our operating results vary and comparisons to results for preceding periods may not be meaningful.~~ ~~Due to a number of factors, including the risks described in this section, our operating results may fluctuate. These fluctuations may also be caused by:~~

	●	~~the timing and number of purchases and sales of engines or aircraft;~~
	●	~~the timing and amount of maintenance reserve revenues recorded resulting from the termination of long term leases, for which significant amounts of maintenance reserves may have accumulated;~~
	●	~~the termination or announced termination of production of particular aircraft and engine types;~~
	●	~~the retirement or announced retirement of particular aircraft models by aircraft operators;~~
	●	~~the operating history of any particular engine, aircraft or engine or aircraft model;~~
	●	~~the length of our operating leases; and~~
	●	~~the timing of necessary overhauls of engines and aircraft.~~

These risks may reduce our engine utilization rates, lease margins, maintenance reserve revenues and proceeds from engine sales, and result in higher legal, technical, maintenance, storage and insurance costs related to repossession and the cost of engines being off-lease. As a result of the foregoing and other factors, the availability of engines for lease or sale periodically experiences cycles of oversupply and undersupply of given engine models. The incidence of an oversupply of engines may produce substantial decreases in engine lease rates and the appraised and resale value of engines and may increase the time and costs incurred to lease or sell engines. We anticipate that fluctuations from period to period will continue in the future. As a result, we believe that comparisons to results for preceding periods may not be meaningful and that results of prior periods should not be relied upon as an indication of our future performance.

We may not be able to repossess an engine or aircraft when the lessee defaults, and even if we are able to repossess the engine or aircraft, we may have to expend significant funds in the repossession, remarketing and leasing of the asset. When a lessee defaults and such default is not cured in a timely manner we typically seek to terminate the lease and repossess the engine or aircraft. If a defaulting lessee contests the termination and repossession or is under court protection, enforcement of our rights under the lease may be difficult, expensive and time-consuming. We may not realize any practical benefits from our legal rights and we may need to obtain consents to export the engine or aircraft. As a result, the relevant asset may be off-lease or not producing revenue for a prolonged period. In addition, we will incur direct costs associated with repossessing our engine or aircraft. These costs may include legal and similar costs, the direct costs of transporting, storing and insuring the engine or aircraft, and costs associated with necessary maintenance and recordkeeping to make the asset available for lease or sale. During this time, we will realize no revenue from the leased engine or aircraft, and we will continue to be obligated to pay any debt financing applicable to the asset. If an engine is installed on an airframe, the airframe may be owned by an aircraft lessor or other third party. Our ability to recover engines installed on airframes may depend on the cooperation of the airframe owner.

~~We and our customers operate in a highly regulated industry and changes in laws or regulations may adversely affect our ability to lease or sell our engines or aircraft.~~

●

~~Licenses and consents.~~ We and our customers operate in a highly regulated industry. A number of our leases require specific governmental or regulatory licenses, consents or approvals. These include consents for certain payments under the leases and for the export, import or re-export of our engines or aircraft. Consents needed in connection with future leasing or sale of our engines or aircraft may not be received timely or have economically feasible terms. Any of these events could adversely affect our ability to lease or sell engines or aircraft. The U.S. Department of Commerce, or the “Commerce Department,” regulates exports. We are subject to the Commerce Department’s and the U.S. Department of State’s regulations with respect to the lease and sale of engines and aircraft to foreign entities and the export of related parts. These Departments may, in some cases, require us to obtain export licenses for engines exported to foreign countries. The U.S. Department of Homeland Security, through the U.S. Customs and Border Protection, enforces regulations related to the import of engines and aircraft into the United States for maintenance or lease and imports of parts for installation on our engines and aircraft. We are prohibited from doing business with persons designated by the U.S. Department of the Treasury’s Office of Foreign Assets Control, or “OFAC,” on its “Specially Designated Nationals List,” and must monitor our operations and existing and potential lessees and other counterparties for compliance with OFAC’s rules. Similarly, sanctions issued by the United Nations, the U.S. government, the European Union or other governments could prohibit or restrict us from doing business in certain countries or with certain persons, and we must monitor our operations and existing and potential lessees and other counterparties for compliance with such sanctions.

	●	~~Anti-corruption Laws~~. As a U.S. corporation with significant international operations, we are required to comply with a number of U.S. and international laws and regulations, including those combating corruption. For example, the U.S. Foreign Corrupt Practices Act (the “FCPA”) and similar world-wide anti-bribery laws generally prohibit improper payments to foreign officials for the purpose of influencing any official act or decision or securing any improper advantage. The scope and enforcement of anti-corruption laws and regulations may vary. Although our policies expressly mandate compliance with the FCPA and similarly applicable laws, there can be no assurance that none of our employees or agents will take any action in violation of our policies. Violations of such laws or regulations could result in substantial civil or criminal fines or penalties. Actual or alleged violations could also damage our reputation, be expensive to defend, and impair our ability to do business.
	●	~~Civil aviation regulation~~. Users of engines and aircraft are subject to general civil aviation authorities, including the FAA and the EASA, who regulate the maintenance of engines and issue airworthiness directives. Airworthiness directives typically set forth special maintenance actions or modifications to certain engine and aircraft types or series of specific engines that must be implemented for the engine or aircraft to remain in service. Also, airworthiness directives may require the lessee to make more frequent inspections of an engine, aircraft or particular engine parts. Each lessee of an engine or aircraft generally is responsible for complying with all airworthiness directives. However, if the engine or aircraft is off lease, we may be forced to bear the cost of compliance with such airworthiness directives, and if the engine or aircraft is leased, subject to the terms of the lease, if any, we may be forced to share the cost of compliance.

~~Our aircraft, engines or parts could cause bodily injury or property damage, exposing us to liability claims.~~ We are exposed to potential liability claims if the use of our aircraft, engines or parts is alleged to have caused bodily injury or property damage. Our leases require our lessees to indemnify us against these claims and to carry insurance customary in the air transportation industry, including liability, property damage and have all risks insurance on our engines and on our aircraft at agreed upon levels. We can give no assurance that one or more catastrophic events will not exceed insurance coverage limits or that lessees’ insurance will cover all claims that may be asserted against us. Any insurance coverage deficiency or default by lessees under their indemnification or insurance obligations may reduce our recovery of losses upon an event of loss.

~~An increase in interest rates or in our borrowing margin would increase the cost of servicing our debt and could reduce our profitability.~~ A portion of our outstanding debt bears interest at floating rates. As a result, to the extent we have not hedged against rising interest rates, an increase in the applicable benchmark interest rates would increase our cost of servicing our debt and could materially and adversely affect our results of operations, financial condition, liquidity and cash flows. In addition, we may refinance our indebtedness. If interest rates or our borrowing margins increase between the time an existing financing arrangement was consummated and the time such financing arrangement is refinanced, the cost of servicing our debt would increase and our results of operations, financial condition, liquidity and cash flows could be materially and adversely affected.

~~We have risks in managing our portfolio of engines to meet customer needs.~~ The relatively long life cycles of aircraft and jet engines can be shortened by world events, government regulation or customer preferences. We seek to manage these risks by trying to anticipate demand for particular engine and aircraft types, maintaining a portfolio mix of engines that we believe is diversified and that will have long-term value and will be sought by lessees in the global market for jet engines, and by selling engines and aircraft that we expect will not experience obsolescence or declining usefulness in the foreseeable future.

~~Our inability to maintain sufficient liquidity could limit our operational flexibility and also impact our ability to make payments on our obligations as they come due.~~ In addition to being capital intensive and highly leveraged, our business also requires that we maintain sufficient liquidity to enable us to contribute the non-financed portion of engine and aircraft purchases as well as to service our payment obligations to our creditors as they become due, despite the fact that the timing and amounts of our revenues do not match the timing under our debt service obligations. Our restricted cash is unavailable for general corporate purposes. Accordingly, our ability to successfully execute our business strategy and maintain our operations depends on our ability to continue to maintain sufficient liquidity, cash and available credit under our credit facilities. Our liquidity could be adversely impacted if we are subjected to one or more of the following: a significant decline in revenues, a material increase in interest expense that is not matched by a corresponding increase in revenues, a significant increase in operating expenses, or a reduction in our available credit under our credit facilities. If we do not maintain sufficient liquidity, our ability to meet our payment obligations to creditors or to borrow additional funds could become impaired.

~~Liens on our engines or aircraft could exceed the value of such assets, which could negatively affect our ability to repossess, lease or sell a particular engine or aircraft.~~ Liens that secure the payment of repairers’ charges or other liens may, depending on the jurisdiction, attach to engines and aircraft. Engines also may be installed on airframes to which liens unrelated to the engines have attached. These liens may secure substantial sums that may, in certain jurisdictions or for limited types of liens, exceed the value of the particular engine or aircraft to which the liens have attached. In some jurisdictions, a lien may give the holder the right to detain or, in limited cases, sell or cause the forfeiture of the engine or aircraft. Such liens may have priority over our interest as well as our creditors’ interest in the engines or aircraft, either because they have such priority under applicable local law or because our creditors’ security interests are not filed in jurisdictions outside the United States. These liens and lien holders could impair our ability to repossess and lease or sell the engines or aircraft. We cannot give assurance that our lessees will comply with their obligations to discharge third-party liens on our assets. If they do not, we may, in the future, find it necessary to pay the claims secured by such liens to repossess such assets.

~~In certain countries, an engine affixed to an aircraft may become an accession to the aircraft and we may not be able to exercise our ownership rights over the engine.~~ In some jurisdictions, an engine affixed to an aircraft may become an accession to the aircraft, so that the ownership rights of the owner of the aircraft supersede the ownership rights of the owner of the engine. If an aircraft is security for the owner’s obligations to a third-party, the security interest in the aircraft may supersede our rights as owner of the engine. This legal principle could limit our ability to repossess an engine in the event of a lessee bankruptcy or lease default while the aircraft with the engine installed remains in such a jurisdiction. We may suffer a loss if we are not able to repossess engines leased to lessees in these jurisdictions.

~~Compliance with the regulatory requirements imposed on us as a public company results in significant costs that may have an adverse effect on our results.~~ As a public company, we are subject to various regulatory requirements including, but not limited to, compliance with the Sarbanes-Oxley Act of 2002 and the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. Compliance with these regulations results in significant additional costs to us both directly, through increased audit and consulting fees, and indirectly, through the time required by our limited resources to address such regulations. We have complied with Section 404a of the Sarbanes-Oxley Act as of December 31, 2007, completing our annual assessment of internal controls over financial reporting.

We are subject to governmental regulation and our failure to comply with these regulations could cause the government to withdraw or revoke our authorizations and approvals to do business and could subject us to penalties and sanctions that could harm our business. Governmental agencies throughout the world, including the FAA, highly regulate the manufacture, repair and operation of all aircraft operated in the United States and equivalent regulatory agencies in other countries, such as the EASA in Europe, regulate aircraft operated in those countries. We include, with the aircraft, engines and related parts that we purchase, lease and sell to our customers, documentation certifying that each part complies with applicable regulatory requirements and meets applicable standards of airworthiness established by the FAA or the equivalent regulatory agencies in other countries. Specific regulations vary from country to country, although regulatory requirements in other countries are generally satisfied by compliance with FAA requirements. With respect to a particular engine or engine component, we utilize FAA and/or EASA certified repair stations to repair and certify engines and components to ensure marketability. The revocation or suspension of any of our material authorizations or approvals would have an adverse effect on our business, financial condition and results of operations. New and more stringent government regulations, if adopted and enacted, could have an adverse effect on our business, financial condition and results of operations. In addition, certain product sales to foreign countries require approval or licensing from the U.S. government. Denial of export licenses could reduce our sales to those countries and could have a material adverse effect on our business.

We have a concentrated shareholder base which has the power to contest the outcome of most matters submitted to the stockholders for approval and could affect our stock prices adversely if selling a substantial amount of stock. As of July 6, 2018, our three largest stock holders beneficially owned or had the ability to direct the voting of shares of our common stock representing approximately 61% of the outstanding shares. .As a result, these shareholders have the power to determine the outcome of substantially all matters submitted to our stock holders for approval, including the election of our board of directors. In addition, future sales by these shareholders of substantial amounts of our common stock, or the potential for such sales, could adversely affect the prevailing market price of our common stock.

~~Our business might suffer if we were to lose the services of certain key employees.~~ Our business operations depend upon our key employees, including our executive officers. Loss of any of these employees, particularly our Chief Executive Officer, could have a material adverse effect on our business as our key employees have knowledge of our industry and customers and would be difficult to replace.

~~To service our debt and meet our other cash needs, we will require a significant amount of cash, which may not be available.~~ Our ability to make payments on, or repay or refinance, our debt, will depend largely upon our future operating performance. Our future performance, to a certain extent, is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control. In addition, our ability to borrow funds in the future to make payments on our debt will depend on our maintaining specified financial ratios and satisfying financial condition tests and other covenants in the agreements governing our debt. Our business may not generate sufficient cash flow from operations and future borrowings may not be available in amounts sufficient to pay our debt and to satisfy our other liquidity needs.

If our cash flows and capital resources are insufficient to fund our debt service obligations, we may be forced to seek alternatives, such as to reduce or delay investments and aircraft or engine purchases, or to sell assets, seek additional capital or restructure or refinance our indebtedness. Our ability to restructure or refinance our debt will depend on the condition of the capital markets and our financial condition at such time. Any refinancing of our debt could be at higher interest rates and might require us to comply with more onerous covenants, which could further restrict our business operations. The terms of our debt instruments may restrict us from adopting some of these alternatives. These alternative measures may not be successful and may not permit us to meet our scheduled debt service obligations or to meet our aircraft or engine purchase commitments as they come due.

~~Despite our substantial indebtedness, we might incur significantly more debt.~~ Despite our current indebtedness levels, we expect to incur additional debt in the future to finance our operations, including purchasing aircraft and engines and meeting our contractual obligations. The agreements relating to our debt, including our indentures, term loan facilities, revolving credit facilities, securitizations, and other financings do not entirely prohibit us from incurring additional debt. If we increase our total indebtedness, our debt service obligations will increase, and we will become more exposed to the risks arising from our substantial level of indebtedness.

~~We may be unable to generate sufficient returns on our aircraft~~ ~~and engine~~ ~~investments.~~ Our results depend on our ability to consistently acquire strategically attractive aircraft and engines, continually and profitably lease and re-lease them, and finally sell or otherwise dispose of them, in order to generate returns on the investments we have made, provide cash to finance our growth and operations, and service our existing debt. Upon acquiring new aircraft or engines we may not be able to enter into leases that generate sufficient cash flow to justify the cost of purchase. When our leases expire or our aircraft or engines are returned prior to the date contemplated in the lease, we bear the risk of re-leasing, selling or parting-out the aircraft or engines. Because our leases are predominantly operating leases, only a portion of an aircraft or engine’s value is recovered by the revenues generated from the lease and we may not be able to realize the residual value after lease expiration.

Our ability to profitably purchase, lease, re-lease, sell or otherwise dispose of our aircraft and engines will depend on conditions in the airline industry and general market and competitive conditions at the time of purchase, lease, and disposition. In addition to factors linked to the aviation industry in general, other factors that may affect our ability to generate adequate returns from our aircraft and engines include the maintenance and operating history of the airframe and engines, the number of operators using the particular type of aircraft, and aircraft age.

~~A return to historically high fuel prices or continued volatility in fuel prices could affect the profitability of the aviation industry and our lessees~~’ ~~ability to meet their lease payment obligations to us.~~ Historically, fuel prices have fluctuated widely depending primarily on international market conditions, geopolitical and environmental events and currency exchange rates. Factors such as natural disasters can also significantly affect fuel availability and prices. The cost of fuel represents a major expense to airlines that is not within their control, and significant increases in fuel costs or hedges that inaccurately assess the direction of fuel costs can materially and adversely affect their operating results. Due to the competitive nature of the aviation industry, operators may be unable to pass on increases in fuel prices to their customers by increasing fares in a manner that fully offsets the increased fuel costs they may incur. In addition, they may not be able to manage this risk by appropriately hedging their exposure to fuel price fluctuations. The profitability and liquidity of those airlines that do hedge their fuel costs can also be adversely affected by swift movements in fuel prices, if such airlines are required as a result to post cash collateral under hedge agreements. Therefore, if for any reason fuel prices return to historically high levels or show significant volatility, our lessees are likely to incur higher costs or generate lower revenues, which may affect their ability to meet their obligations to us.

~~Interruptions in the capital markets could impair our lessees~~’ ~~ability to finance their operations, which could prevent the lessees from complying with payment obligations to us.~~ The global financial markets can be highly volatile and the availability of credit from financial markets and financial institutions can vary substantially depending on developments in the global financial markets. Our lessees depend on banks and the capital markets to provide working capital and to refinance existing indebtedness. To the extent such funding is unavailable, or available only at high interest costs or on unfavorable terms, and to the extent financial markets do not provide equity financing as an alternative, our lessees’ operations and operating results may be materially and adversely affected and they may not comply with their respective payment obligations to us.

~~Our lessees may fail to properly maintain our aircraft~~ ~~or engines~~. We may be exposed to increased maintenance costs for our leased aircraft or engines if lessees fail to properly maintain the aircraft or engines or pay supplemental maintenance rents. Under our leases, our lessees are primarily responsible for maintaining our aircraft and engines and complying with all governmental requirements applicable to the lessee and the aircraft and engines, including operational, maintenance, government agency oversight, registration requirements and airworthiness directives. We also require many of our lessees to pay us supplemental maintenance rents. If a lessee fails to perform required maintenance on our aircraft or engines during the term of the lease, the aircraft or engine’s market value may decline, which would result in lower revenues from its subsequent lease or sale, or the aircraft might be grounded. Maintenance failures by a lessee would also likely require us to incur maintenance and modification costs, which could be substantial, upon the termination of the applicable lease to restore the aircraft or engines to an acceptable condition prior to sale or re-leasing. Supplemental maintenance rents paid by our lessees may not be sufficient to fund such maintenance costs. If our lessees fail to meet their obligations to pay supplemental maintenance rents or fail to perform required scheduled maintenance, or if we are required to incur unexpected maintenance costs, our financial results may be materially and adversely affected.

~~Our lessees may fail to adequately insure our aircraft~~ ~~or engines~~. While an aircraft or engine is on lease, we do not directly control its operation. Nevertheless, because we hold title to the aircraft or engine, we could be held liable for losses resulting from its operation under one or more legal theories in certain jurisdictions around the world, or at a minimum, we might be required to expend resources in our defense. We require our lessees to obtain specified levels of insurance and indemnify us for, and insure against, such operational liabilities. However, some lessees may fail to maintain adequate insurance coverage during a lease term, which, although constituting a breach of the lease, would require us to take some corrective action, such as terminating the lease or securing insurance for the aircraft or engines.

In addition, there are certain risks of losses our lessees face that insurers may be unwilling to cover or for which the cost of coverage would be prohibitively expensive. For example, following the terrorist attacks of September 11, 2001, aviation insurers significantly reduced the amount of coverage available to airlines for liability to persons other than airline employees or passengers for claims resulting from acts of terrorism, war or similar events and significantly increased the premiums for third party war risk and terrorism liability insurance and coverage in general. Therefore, our lessees’ insurance coverage may not be sufficient to cover all claims that could be asserted against us arising from the operation of our aircraft or engines.

Inadequate insurance coverage or default by lessees in fulfilling their indemnification or insurance obligations to us will reduce the insurance proceeds that would be received by us in the event we are sued and are required to make payments to claimants. Moreover, our lessees’ insurance coverage is dependent on the financial condition of insurance companies, which might not be able to pay claims. A reduction in insurance proceeds otherwise payable to us as a result of any of these factors could materially and adversely affect our financial results.

~~If our lessees fail to cooperate in returning our aircraft~~ ~~or engines~~ ~~following lease terminations, we may encounter obstacles and are likely to incur significant costs and expenses conducting repossessions.~~ Our legal rights and the relative difficulty of repossession vary significantly depending on the jurisdiction in which an aircraft or engines are located and the applicable law. We may need to obtain a court order or consents for de-registration or re-export, a process that can differ substantially in different countries. Where a lessee or other operator flies only domestic routes in the jurisdiction in which the aircraft is registered, repossessing and exporting the aircraft or engines may be challenging, especially if the jurisdiction permits the lessee or the other operator to resist de-registration. When a defaulting lessee is in bankruptcy, protective administration, insolvency or similar proceedings, additional limitations may apply. For example, certain jurisdictions give rights to the trustee in bankruptcy or a similar officer to assume or reject the lease or to assign it to a third party, or entitle the lessee or another third party to retain possession of the aircraft or engines without paying lease rentals or performing all or some of the obligations under the relevant lease. Certain of our lessees are partially or wholly owned by government-related entities, which can complicate our efforts to repossess our aircraft or engines in that government’s jurisdiction. If we encounter any of these difficulties, we may be delayed in, or prevented from, enforcing certain of our rights under a lease and in re-leasing the affected aircraft or engines. When conducting a repossession, we are likely to incur significant costs and expenses that are unlikely to be recouped. These include legal and other expenses of court or other governmental proceedings, including the cost of posting security bonds or letters of credit necessary to effect repossession of the aircraft or engines, particularly if the lessee is contesting the proceedings or is in bankruptcy. We must absorb the cost of lost revenue for the time the aircraft or engines are off-lease. We may incur substantial maintenance, refurbishment or repair costs that a defaulting lessee has failed to pay and are necessary to put the aircraft or engines in suitable condition for re-lease or sale. We may incur significant costs in retrieving or recreating aircraft records required for registration of the aircraft, and in obtaining the certificate of airworthiness for an aircraft. It may be necessary to pay to discharge liens or pay taxes and other governmental charges on the aircraft to obtain clear possession and to remarket the aircraft effectively, including, in some cases, liens that the lessee may have incurred in connection with the operation of its other aircraft. We may also incur other costs in connection with the physical possession of the aircraft or engines.

Based on historical rates of airline defaults and bankruptcies, at least some of our lessees are likely to default on their lease obligations or file for bankruptcy in the ordinary course of our business. If we incur significant costs in repossessing our aircraft, our financial results may be materially and adversely affected.

~~If our lessees fail to discharge aircraft liens for which they are responsible, we may be obligated to pay to discharge the liens.~~ In the normal course of their business, our lessees are likely to incur aircraft and engine liens that secure the payment of airport fees and taxes, custom duties, Eurocontrol and other air navigation charges, landing charges, crew wages, and other liens that may attach to our aircraft. Aircraft may also be subject to mechanic’s liens as a result of routine maintenance performed by third parties on behalf of our customers. Some of these liens can secure substantial sums, and if they attach to entire fleets of aircraft, as permitted in certain jurisdictions for certain kinds of liens, they may exceed the value of the aircraft itself. Although the financial obligations relating to these liens are the contractual responsibility of our lessees, if they fail to fulfill their obligations, the liens may ultimately become our financial responsibility. Until they are discharged, these liens could impair our ability to repossess, re-lease or sell our aircraft or engines. In some jurisdictions, aircraft and engine liens may give the holder thereof the right to detain or, in limited cases, sell or cause the forfeiture of the aircraft. If we are obliged to pay a large amount to discharge a lien, or if we are unable take possession of our aircraft subject to a lien in a timely and cost-effective manner, it could materially and adversely affect our financial results.

~~If our lessees encounter financial difficulties and we restructure or terminate our leases, we are likely to obtain less favorable lease terms.~~ If a lessee delays, reduces, or fails to make rental payments when due, or has advised us that it will do so in the future, we may elect or be required to restructure or terminate the lease. A restructured lease will likely contain terms that are less favorable to us. If we are unable to agree on a restructuring and we terminate the lease, we may not receive all or any payments still outstanding, and we may be unable to re-lease the aircraft or engines promptly and at favorable rates, if at all.

We may enter into strategic ventures that pose risks, including a lack of complete control over the enterprise, and potential unforeseen risks, any of which could adversely impact our financial results. We may occasionally enter into strategic ventures or investments with third parties in order to take advantage of favorable financing opportunities, to share capital or operating risk, or to earn aircraft management fees. These strategic ventures and investments may subject us to various risks, including those arising from our possessing limited decision-making rights in the enterprise or over the related aircraft. If we were unable to resolve a dispute with a strategic partner who controls ultimate decision-making in such a venture or retains material managerial veto rights, we might reach an impasse which may lead to the liquidation of our investment at a time and in a manner that would result in our losing some or all of our original investment and/or the incurrence of other losses, which could adversely impact our financial results.

Our policies and procedures designed to ensure compliance with applicable laws, including anti-bribery and corruption laws, may not be effective in all instances to prevent violations and as a result we may be subject to related governmental investigations. We could become subject to various governmental investigations, audits and inquiries, both formal and informal. Such investigations, regardless of their outcome, could be costly, divert management attention, and damage our reputation. The unfavorable resolution of such investigations could result in criminal liability, fines, penalties or other monetary or non-monetary sanctions and could materially affect our business or results of operations.

~~Foreign exchange rate fluctuations could adversely impact our aggregate foreign currency exposure.~~ We have pursued and intend to continue to pursue growth opportunities in international markets, and may invest in countries where the U.S. dollar is not the local currency. As a result, we are subject to foreign currency risk due to potential fluctuations in exchange rates between foreign currencies and the U.S. dollar. A significant depreciation in the value of the currency utilized in one or more countries where we have a significant presence may have a material adverse effect on our results of operations and financial position. In addition, we are active in certain markets whose economic growth is dependent on the price of commodities and the currencies in these markets can be more volatile as a result.

~~Cash may not be available to meet our financial obligations when due or enable us to capitalize on investment opportunities when they arise.~~ We employ debt and other forms of leverage in the ordinary course of business to enhance returns to our investors and finance our operations. We are therefore subject to the risks associated with debt financing and refinancing, including but not limited to the following: (i) our cash flow may be insufficient to meet required payments of principal and interest; (ii) payments of principal and interest on borrowings may leave us with insufficient cash resources to pay operating expenses and dividends; (iii) if we are unable to obtain committed debt financing for potential acquisitions or can only obtain debt at high interest rates or on other unfavorable terms, we may have difficulty completing acquisitions or may generate profits that are lower than would otherwise be the case; (iv) we may not be able to refinance indebtedness at maturity due to company and market factors such as the estimated cash flow produced by our assets, the value of our assets, liquidity in the debt markets, and/or financial, competitive, business and other factors; and (v) if we are able to refinance our indebtedness, the terms of a refinancing may not be as favorable as the original terms for such indebtedness. If we are unable to refinance our indebtedness on acceptable terms, or at all, we may need to utilize available liquidity, which would reduce our ability to pursue new investment opportunities, or we may need to dispose of one or more of our assets on disadvantageous terms, or raise equity causing dilution to existing shareholders. Regulatory changes may also result in higher borrowing costs and reduced access to credit. The terms of our various credit agreements and other financing documents require us to comply with a number of customary financial and other covenants, such as maintaining debt service coverage and leverage ratios, adequate insurance coverage and certain credit ratings. These covenants may limit our flexibility in conducting our operations and breaches of these covenants could result in defaults under the instruments governing the applicable indebtedness, even if we have satisfied and continue to satisfy our payment obligations. A large proportion of our capital is invested in physical assets and securities that can be hard to sell, especially if market conditions are poor. Further, because our investment strategy can involve public company securities, we may be restricted in our ability to effect sales during certain time periods. A lack of liquidity could limit our ability to vary our portfolio or assets promptly in response to changing economic or investment conditions. Additionally, if financial or operating difficulties of other owners result in distress sales, such sales could depress asset values in the markets in which we operate. The restrictions inherent in owning physical assets could reduce our ability to respond to changes in market conditions and could adversely affect the performance of our investments, our financial condition and results of operations. Because there is significant uncertainty in the valuation of, or in the stability of the value of illiquid or non-public investments, the fair values of such investments do not necessarily reflect the prices that would actually be obtained when such investments are realized. Realizations at values significantly lower than the values at which investments have been recorded would result in losses, a decline in asset management fees and the potential loss of carried interest and incentive fees. We enter into financing commitments in the normal course of business, which we may be required to fund. Additionally, in the ordinary course of business we guarantee the obligations of other entities that we manage and/or invest in. If we are required to fund these commitments and are unable to do so, this could result in damages being pursued against us or a loss of opportunity through default under contracts that are otherwise to our benefit.

~~Deficiencies in our public company financial reporting and disclosures could adversely impact our reputation.~~ As we expand the size and scope of our business, there is a greater susceptibility that our financial reporting and other public disclosure documents may contain material misstatements and that the controls we maintain to attempt to ensure the complete accuracy of our public disclosures may fail to operate as intended. The occurrence of such events could adversely impact our reputation and financial condition. Management is responsible for establishing and maintaining adequate internal controls over financial reporting to give our stakeholders assurance regarding the reliability of our financial reporting and the preparation of financial statements for external purposes in accordance with international financial reporting standards. However, the process for establishing and maintaining adequate internal controls over financial reporting has inherent limitations, including the possibility of human error. Our internal controls over financial reporting may not prevent or detect misstatements in our financial disclosures on a timely basis, or at all. Some of these processes may be new for certain subsidiaries in our structure and in the case of acquisitions may take time to be fully implemented. Our disclosure controls and procedures are designed to provide assurance that information required to be disclosed by us in reports filed or submitted under U.S. securities laws is recorded, processed, summarized and reported within the time periods specified. Our policies and procedures governing disclosures may not ensure that all material information regarding us is disclosed in a proper and timely fashion, or that we will be successful in preventing the disclosure of material information to a single person or a limited group of people before such information is generally disseminated.

~~Risks Related to the Offering~~

~~The r~~~~anking of the~~ C~~ompany~~’~~s obligations under the junior subordinated debentures and the~~ ~~guarantee~~ ~~creates a risk that~~ ~~Air T Funding~~ ~~may not be able to pay amounts due to holders of the Capital Securities.~~

The ability of Air T Funding to pay amounts due to holders of the Capital Securities is solely dependent upon the Company making payments on the Junior Subordinated Debentures as and when required. All obligations of the Company under the Guarantee, the Junior Subordinated Debentures and other documents described herein are unsecured and rank subordinate and junior in right of payment to all current and future Senior and Subordinated Debt, the amount of which is unlimited. At September 30, 2018 the aggregate outstanding Senior and Subordinated Debt of the Company was approximately $59.8. None of the Indenture, the Guarantee or the Trust Agreement places any limitation on the amount of secured or unsecured debt, including Senior and Subordinated Debt, that may be incurred by the Company or its subsidiaries. Further, there is no limitation on the Company’s ability to issue additional junior subordinated debentures in connection with any further offerings of capital securities, and such additional debentures would rank ~~pari passu~~ ~~with the Junior Subordinated Debentures. See “Description of Junior Subordinated Debentures -- Subordination” and “Description of Guarantee -- Status of the Guarantee.”~~

~~The Company has the o~~~~ption to extend~~ ~~the~~ ~~interest payment period; tax consequences of a deferral of interest payments~~.

So long as no Debenture Event of Default (as defined herein) has occurred and is continuing, at any time on or after, [•], 2023, the Company has the right under the Indenture to defer the payment of interest on the Junior Subordinated Debentures at any time or from time to time for a period not exceeding 20 consecutive quarters with respect to each ~~Extension Period,~~deferral period (each an “Extension Period”), provided that no Extension Period may extend beyond the ~~Stated Maturity~~stated maturity of the Junior Subordinated Debentures. ~~As a consequence of any such deferral, quarterly~~If interest payments are so deferred, Distributions on the ~~Capital~~Trust Preferred Securities bywill also be deferred and Air T, ~~Funding~~Inc. will not be ~~deferred (and the amount of Distributions~~permitted, subject to which holders of the Capital Securities are entitled will accumulate additional amounts thereon at the rate of 8% per annum, compounded quarterly, from the relevant payment date for such Distributions,certain exceptions, to ~~the extent permitted by applicable law) during~~declare or pay any ~~such Extension Period. During any such Extension Period, the Company will be prohibited from making certain payments or~~cash distributions with respect to ~~the Company’s~~Air T, Inc.’s capital stock ~~(including dividends on~~ or ~~redemptions of common or preferred stock) and from making certain payments with respect to any~~ debt securities ~~of the Company~~ that rank pari passu with or junior ~~in interest~~ to the Junior Subordinated Debentures; however, the Company will NOT be restricted from (a) paying dividends or distributions in common stock of the Company, (b) redeeming rights or taking certain other actions under a stockholders’ rights plan, (c) making payments under the Guarantee or (d) making purchases of common stock generally or related to the issuance of common stock or rights under any of the Company’s benefit plans for its directors, officers or employees. Further, duringDebentures. During an Extension Period, ~~the Company would have the ability to~~Distributions will continue to make payments on Senior and Subordinated Debt. At September 30, 2018, the aggregate outstanding Senior and Subordinated Debt of the Company was approximately $59.8 million. Prior to the termination of any Extension Period, the Company may further extend such Extension Period provided that such extension does not cause such Extension Period to exceed 20 consecutive quarters or to extend beyond the Stated Maturity. Upon the termination of any Extension Period and the payment of all interest then accrued and unpaid (togetheraccrue with ~~interest~~income thereon ~~at the annual rate of 8%,~~ compounded quarterly, to the extent permitted by applicable law), the Company may elect to begin a new Extension Period subject to the above requirements. There is no limitation on the number of times that the Company may elect to begin an Extension Period.quarterly. See “Description of ~~the~~ Capital ~~Securities -- Distributions” and “Description of Junior Subordinated Debentures -- Option to Extend Interest Payment Period.~~Stock.”

Because the Company believes the likelihood of it exercising its option to defer payments of interest is remote, the Junior Subordinated Debentures will be treated as issued without “original issue discount” for United States federal income tax purposes. As a result, holders of Capital Securities will include interest in taxable income under their own methods of accounting (i.e., cash or accrual). The Company has no current intention of exercising its right to defer payments of interest by extending the interest payment period on the Junior Subordinated Debentures. However, should the Company elect to exercise its right to defer payments of interest in the future (which shall be possible atAt any time on or after ~~[•], 2023),~~June 7, 2024, the ~~market price~~Trust Preferred Securities are subject to mandatory redemption upon repayment of the ~~Capital~~Junior Subordinated Debentures at maturity or their earlier redemption in an amount equal to the amount of Junior Subordinated Debentures maturing on or being redeemed at a redemption price equal to the aggregate liquidation amount of the Trust Preferred Securities ~~is likely~~plus accumulated and unpaid distributions thereon to ~~be adversely affected. A holder that disposes~~the date of ~~such holder’s Capital Securities during an Extension Period, therefore, might~~redemption. The Junior Subordinated Debentures are redeemable prior to maturity at the option of Air T (i) on or after June 7, 2024, in whole at any time or in part from time to time, or (ii) at any time, in whole (but not ~~receive the same return on such holder’s investment as a holder that continues to hold the Capital Securities.~~

~~Upon~~in part), upon the occurrence and during the ~~continuation~~continuance of a ~~Tax Event~~tax event or an ~~Investment Company Event, the Company has the right~~investment company event or capital treatment event, in each case at a redemption price equal to ~~redeem the Junior Subordinated Debentures in whole (but not in part) at~~ 100% of the principal amount of the Junior Subordinated Debentures so redeemed, together with any accrued but unpaid interest to the date fixed for ~~redemption within 90 days following the occurrence of such Tax Event or Investment Company Event and therefore cause a mandatory redemption of the Trust Securities.~~redemption.” See “Description of ~~the~~ Capital ~~Securities -- Redemption.~~Stock.”

The terms of the ~~Capital~~Trust Preferred Securities ~~will~~ include those stated in the Trust Agreement and those made part of the Trust Agreement by the Trust Indenture Act. This summary of certain terms and provisions of the ~~Capital~~Trust Preferred Securities and the Trust Agreement does not purport to be complete and is subject to, and is qualified in its entirety by reference to, all the provisions of the Trust Agreement, including the definitions therein of certain terms, and the Trust Indenture Act. Wherever particular defined terms of the Trust Agreement (as amended or supplemented from time to time) are referred to herein, such defined terms are incorporated herein. ~~The form of the Trust Agreement has been filed as an exhibit to the Registration Statement of which this Prospectus forms a part.~~

The amount of ~~Distributions~~distributions payable for any period will be computed on the basis of a 360-day year of twelve 30-day months. In the event that any date on which ~~Distributions~~distributions are payable on the ~~Capital~~Trust Preferred Securities is not a Business Day, payment of the ~~Distribution~~distribution payable on such date will be made on the next Business Day (and without any interest or other payment in respect to any such delay) except that, if such Business Day is in the next succeeding calendar year, payment of such ~~Distribution~~distribution shall be made on the immediately preceding Business Day, in each case with the same force and effect as if made on the date such payment was originally payable. As used in this Prospectus, a “Business Day” shall mean any day other than a Saturday or a Sunday, or a day on which banking institutions in the State of Minnesota are authorized or required by law or executive order to remain closed or a day on which the corporate trust office of the Property Trustee or the Indenture Trustee is closed for business.

“Liquidation Amount” means the stated amount of ~~$25~~$25.00 per Trust Security.

If less than all of the Trust Securities issued by Air T Funding are to be redeemed on a Redemption Date, then the aggregate Redemption Price for such Trust Securities to be redeemed shall be allocated pro rata to the ~~Capital~~Trust Preferred Securities and Common Securities based upon the relative Liquidation Amounts of such classes. The particular ~~Capital~~Trust Preferred Securities to be redeemed shall be selected by the Property Trustee from the outstanding ~~Capital~~Trust Preferred Securities not previously called for redemption, by such method as the Property Trustee shall deem fair and appropriate and which may provide for the selection for redemption of portions (equal to ~~$25~~$25.00 or an integral multiple thereof) of the Liquidation Amount of ~~Capital~~Trust Preferred Securities. The Property Trustee shall promptly notify the Trust Securities registrar in writing of the ~~Capital~~Trust Preferred Securities selected for redemption and, in the case of any ~~Capital~~Trust Preferred Securities selected for partial redemption, the Liquidation Amount thereof to be redeemed. For all purposes of the Trust Agreement, unless the context otherwise requires, all provisions relating to the redemption of ~~Capital~~Trust Preferred Securities shall relate to the portion of the aggregate Liquidation Amount of ~~Capital~~Trust Preferred Securities which has been or is to be redeemed. Notice of any redemption will be mailed at least 30 days but not more than 60 days before the Redemption Date to each holder of Trust Securities at such holder’s registered address. Unless Air T Funding defaults in payment of the applicable Redemption Price, on and after the Redemption Date, Distributions will cease to accrue on such ~~Capital~~Trust Preferred Securities called for redemption.

In the case of any Event of Default under the Trust Agreement resulting from a Debenture Event of Default, the Company as holder of the Common Securities will be deemed to have waived any right to act with respect to any such Event of Default until the effect of all such Events of Default have been cured, waived or otherwise eliminated. Until any such Events of Default have been so cured, waived or otherwise eliminated, the Property Trustee shall act solely on behalf of the holders of the ~~Capital~~Trust Preferred Securities and not on behalf of the Company as holder of the Common Securities, and only the holders of the ~~Capital~~Trust Preferred Securities will have the right to direct the Property Trustee to act on their behalf.

Any required approval of holders of the ~~Capital~~Trust Preferred Securities may be given at a meeting of holders of ~~Capital~~Trust Preferred Securities convened for such purpose or pursuant to written consent. The Property Trustee will cause a notice of any meeting at which holders of the ~~Capital~~Trust Preferred Securities are entitled to vote, or of any matter upon which action by written consent of such holders is to be taken, to be given to each holder of record of the ~~Capital~~Trust Preferred Securities in the manner set forth in the Trust Agreement. No vote or consent of the holders of the ~~Capital~~Trust Preferred Securities will be required for Air T Funding to redeem and cancel the ~~Capital~~Trust Preferred Securities in accordance with the Trust Agreement.

Upon the issuance of a Global ~~Capital~~Trust Preferred Security, and the deposit of such Global ~~Capital~~Trust Preferred Security with or on behalf of the Depositary, the Depositary for such Global ~~Capital~~Trust Preferred Security or its nominee will credit, on its book-entry registration and transfer system, the respective aggregate Liquidation Amounts of the individual ~~Capital~~Trust Preferred Securities represented by such Global ~~Capital~~Trust Preferred Securities to the accounts of Participants. Such accounts shall be designated by the dealers, underwriters or agents with respect to such ~~Capital~~Trust Preferred Securities. Ownership of beneficial interests in a Global ~~Capital~~Trust Preferred Security will be limited to Participants or persons that may hold interests through Participants. Ownership of beneficial interests in such Global ~~Capital~~Trust Preferred Security will be shown on, and the transfer of that ownership will be effected only through, records maintained by the applicable Depositary or its nominee (with respect to interests of Participants) and the records of Participants (with respect to interests of persons who hold through Participants). The laws of some states require that certain purchasers of securities take physical delivery of such securities in definitive form. Such limits and such laws may impair the ability to transfer beneficial interests in a Global ~~Capital~~Trust Preferred Security.

Air T Funding may not borrow money or issue debt or mortgage or pledge any of its assets.

The Junior Subordinated Debentures will be unsecured and will rank junior and be subordinate in right of payment to all Senior and Subordinated Debt of the Company. Because the Company is a holding company, the right of the Company to participate in any distribution of assets of any subsidiaries ~~including the Company’s Banks,~~ upon any such subsidiaries’ liquidation or reorganization or otherwise (and thus the ability of holders of the ~~Capital~~Trust Preferred Securities to benefit indirectly from such distribution), is subject to the prior claims of creditors of that subsidiary, except to the extent that the Company may itself be recognized as a creditor of that subsidiary. Accordingly, the Junior Subordinated Debentures will be effectively subordinated to all existing and future liabilities of the Company’s subsidiaries, and holders of Junior Subordinated Debentures should look only to the assets of the Company for payments on the Junior Subordinated Debentures. The Indenture does not limit the incurrence or issuance of other secured or

The Indenture places no limitation on the amount of additional Senior and Subordinated Debt that may be incurred by the Company. The Company expects from time to time to incur additional indebtedness constituting Senior and Subordinated Debt.

The Company expects that the Depositary or its nominee, upon receipt of any payment of principal or interest in respect of a permanent Global Subordinated Debenture representing the Junior Subordinated Debentures, immediately will credit Participants’ accounts with payments in amounts proportionate to their respective beneficial interest in the principal amount of the Global Subordinated Debenture as shown on the records of such Depositary or its nominee. The Company also expects that payments by Participants to owners of beneficial interests in such Global Subordinated Debenture held through such Participants will be governed by standing instructions and customary practices, as is now the case with securities held for the accounts of customers in bearer form or registered in “street name.” Such payments will be the responsibility of such Participants.

The holders of the ~~Capital~~Trust Preferred Securities would not be able to exercise directly any remedies other than those set forth in the preceding paragraph available to the holders of the Junior Subordinated Debentures unless there shall have been an Event of Default under the Trust Agreement. See “Description of ~~Capital~~Trust Preferred Securities -- Events of Default; Notice.”

The Depositary has no knowledge of the actual Beneficial Owners of the ~~Capital~~Trust Preferred Securities or Junior Subordinated Debentures; the Depositary’s records reflect only the identity of the Direct Participants to whose accounts such ~~Capital~~Trust Preferred Securities or Junior Subordinated Debentures are credited, which may or may not be the Beneficial Owners. The Participants will remain responsible for keeping account of their holdings on behalf of their customers.

The information in this section concerning the Depositary and the Depositary’s book-entry system has been obtained from sources that Air T Funding and the Company believe to be accurate, but Air T Funding and the Company assume no responsibility for the accuracy thereof. Neither Air T Funding nor the Company has any responsibility for the performance by the Depositary or its Participants of their respective obligations as described herein or under the rules and procedures governing their respective operations.

The Company has, through the Guarantee, the Trust Agreement, the Junior Subordinated Debentures, the Indenture and the Expense Agreement, taken together, fully, irrevocably and unconditionally guaranteed all of Air T Funding’s obligations under the ~~Capital~~Trust Preferred Securities. No single document standing alone or operating in conjunction with fewer than all of the other documents constitutes such guarantee. It is only the combined operation of these documents that has the effect of providing a full, irrevocable and unconditional guarantee of Air T Funding’s obligations under the ~~Capital~~Trust Preferred Securities. See “Relationship Among the ~~Capital~~Trust Preferred Securities, the Junior Subordinated Debentures and the Guarantee.”

Notwithstanding anything to the contrary in the Indenture, the Company has the right to set-off any payment it is otherwise required to make thereunder with and to the extent the Company has theretofore made, or is concurrently on the date of such payment making, a payment under the Guarantee.

~~Distribution of Junior Subordinated Debentures~~Common Shares: We have no obligation or right to ~~Holders of Capital Securities~~

We incorporate by reference the documents listed below and any future filings we will make with the Commission under Section 13(a), 13(c), 14 or 15(d) of the Exchange Act (i) after the date of the initial filing of the registration statement of which this prospectus is a part and prior to effectiveness of such registration statement, and (ii) from the date of this prospectus but prior to the termination of the offering of the securities covered by this prospectus:


Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☐


Title of each class of securities to be registered	Amount to be registered	Proposed maximum offering price per share	Proposed maximum aggregate offering price	Amount of registration fee
Alpha Income Trust Preferred Securities, par value $25.00 per share, underlying Warrants	2,000,000(1)	$24.00(2)	$48,000,000	$5,817.6
Guaranty of Air T, Inc. with respect to the Alpha Income Trust Preferred Securities (3)	--	--	--	--
TOTAL	2,000,000		$48,000,000	$5,817.6

~~(1)~~	Represents the issuance by the Registrant of shares of Alpha Income Trust Preferred Securities, par value $25.00 per share, of the Registrant (the “Capital Securities”) underlying warrants (the “Warrants”). Pursuant to Rule 416(a) under the Securities Act of 1933, as amended (the “Securities Act”), there are also being registered such indeterminable additional Capital Securities as may be issued to prevent dilution as a result of stock splits, stock dividends or similar transactions.
~~(2)~~	Based on the exercise price of a Warrant in accordance with Rule 457(g) under the Securities Act. The exercise price of the Warrants is $24.00, which represents a $1.00 discount on the $25.00 face value amount of the shares of the Alpha Income Trust Preferred Securities that may be purchased upon exercise of the Warrants.
~~(3)~~	This Registration Statement is deemed to cover the Capital Securities, the rights of holders of the Capital Securities under the Indenture and Trust Agreement, the Guarantee, the Expense Agreement entered into by the Registrant and certain backup undertakings as described herein. No separate consideration will be received for the Guarantee or such backup undertakings.


~~PROSPECTUS SUMMARY~~		7TAX CONSEQUENCES
~~RISK FACTORS~~		12 The tax consequences of the Exchange Offer are complex and will vary depending on your particular facts and circumstances.
~~CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS~~		32
~~USE OF PROCEEDS~~	33
~~DETERMINATION OF OFFERING PRICE~~	33
~~DESCRIPTION OF CAPITAL SECURITIES~~	33
~~MATERIAL~~The U.S. ~~FEDERAL INCOME TAX CONSIDERATIONS~~	61
~~LEGAL MATTERS~~	65
~~EXPERTS~~	65
~~WHERE YOU CAN FIND MORE INFORMATION~~	65
~~INCORPORATION OF CERTAIN INFORMATION BY REFERENCE~~	65federal income tax consequences to you of participating in the Exchange Offer are complex and will vary depending on certain facts and circumstances. We intend to treat the exchange of the Shares for the Trust Preferred Securities as a “recapitalization” pursuant to Section 368(a)(1)(E) of the Code. Assuming the exchange is so treated, you generally will recognize gain for U.S. federal income tax purposes equal to the excess, if any, of the fair market value of the Trust Preferred Securities received in the exchange (including any fractional share) over your tax basis in the Shares. You will not be able to recognize any loss realized in the recapitalization (except with respect to cash received in lieu of a fractional share). Cash received in lieu of a fractional share will generally be treated as received in exchange for the fractional share, and you will generally recognize the gain or loss thereon. Please see “Exchange Offer – Section 13.” Because the U.S. federal income tax consequences of the Exchange Offer are complex, you are urged to consult with your own tax advisor.

(Dollars in thousands)
	Three Months Ended September 30,								Six Months Ended September 30,
	2018⁽¹⁾				2017⁽¹⁾				2018⁽¹⁾				2017⁽¹⁾

Overnight Air Cargo:
FedEx	$	17,065	35	%	$	18,081	37	%	$	34,705	31	%	$	34,823	36	%

Ground Equipment Sales:
Military		454	1	%		715	1	%		2,918	3	%		1,060	1	%
Commercial - Domestic		10,608	22	%		14,331	29	%		13,434	12	%		19,263	20	%
Commercial - International		1,776	4	%		469	1	%		2,871	3	%		1,142	1	%
		12,839	26	%		15,515	32	%		19,224	17	%		21,465	22	%

Ground Support Services		8,474	17	%		8,801	18	%		17,522	16	%		17,914	19	%

Commercial Jet Engines and Parts
Domestic		5,341	11	%		2,274	5	%		27,659	25	%		10,465	11	%
International		5,302	11	%		2,852	6	%		10,304	9	%		7,387	8	%
		10,643	22	%		5,126	10	%		37,963	34	%		17,852	18	%

Printing Equipment and Maintenance
Domestic		3	0	%		280	1	%		194	0	%		1,724	2	%
International		137	0	%		1,023	2	%		245	0	%		2,710	3	%
		140	0	%		1,303	3	%		439	0	%		4,434	5	%

Corporate		180	0	%		35	0	%		355	0	%		71	0	%

	$	49,341	100	%	$	48,861	100	%	$	110,208	100	%	$	96,559	100	%


Delaware (State or other jurisdiction of incorporation)						4513 (Primary Standard Industrial Classification Code Number)				52-1206400 (I.R.S. Employer Identification No.)


CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS			3
IMPORTANT INFORMATION			3
IMPORTANT			3
TAX CONSEQUENCES			5
MARKET AND INDUSTRY DATA			6
NOTICE TO INVESTORS			6
PROSPECTUS SUMMARY			7
ABOUT AIR T, INC. AND AIR T FUNDING			17
RISK FACTORS			19
CAPITALIZATION			20
USE OF PROCEEDS			20
EXCHANGE OFFER			21
DESCRIPTION OF AIR T’S CAPITAL STOCK			41
DESCRIPTION OF TRUST PREFERRED SECURITIES, JUNIOR SUBORDINATED DEBENTURES AND GUARANTEE			44
COMPARISON OF RIGHTS BETWEEN THE TRUST PREFERRED SECURITIES AND THE COMMON SHARES			69
PLAN OF DISTRIBUTION			70
LEGAL MATTERS			71
EXPERTS			71
WHERE YOU CAN FIND ADDITIONAL INFORMATION			71
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE			72


(Dollars in thousands)
	Fiscal Year Ended March 31,
	2023			2022

Overnight Air Cargo	$	90,543		$	74,409
Ground Equipment Sales			48,485			42,239
Commercial Jet Engines and Parts			101,737			57,689
Corporate and other			6,558			2,740
	$	247,323		$	177,077

~~Capital Securities issuer~~	~~Air T Funding.~~
			●			Overnight air cargo, which operates in the air express delivery services industry;

~~Securities offered~~	2,000,000 Capital Securities. The Capital Securities represent undivided beneficial interests in Air T Funding’s assets, which will consist solely of the Junior Subordinated Debentures and payments thereunder. As of the date of this prospectus, there are Warrants to purchase an aggregate of 680,000 Capital Securities outstanding; however, we may issue more Warrants from time to time, in our discretion.
			●			Ground equipment sales, which manufactures and provides mobile deicers and other specialized equipment products to passenger and cargo airlines, airports, the military and industrial customers;

~~Capital Securities Outstanding Prior to Exercise of the Warrants~~	~~120,000 Capital Securities, as of the date of this Prospectus.~~
			●			Commercial jet engines and parts, which manages and leases aviation assets; supplies surplus and aftermarket commercial jet engine components; provides commercial aircraft disassembly/part-out services; sells commercial aircraft engines and parts; and, provides procurement services and overhaul and repair services to airlines and commercial aircraft companies; and

~~Capital Securities to be Outstanding Assuming Exercise of all of the Public Warrants~~	~~2,120,000 Capital Securities.~~
		●
~~Terms of~~Corporate and other, which acts as the ~~Warrants~~		~~Each Warrant entitles the holder to purchase one Capital Security~~capital allocator and resource for $24.00 per share, at any time commencing on [•], 2018, which price represents a $1.00 discount to the $25.00 face value of each Capital Security. The Warrants will expire on [•], 2019 or earlier upon redemption or liquidation.

~~Distributions~~	The Distributions payable on each Capital Security will be fixed at a rate per annum of 8% of the Liquidation Amount of $25 per Capital Security, will be cumulative, will accrue from the date of issuance of the Capital Securities, and will be payable quarterly in arrears on the 15th day of February, May, August and November of each year, commencing on [•], 2018 (subject to possible deferral as described below). The amount of each distribution due with respect to the Capital Securities will include amounts accrued through the date the distribution payment is due. Additionally, from time to time the Board may in its sole discretion may declare Distributions in addition to the Distributions equal to the 8.0% per annum Liquidation Amount of the Trust Securities. See “Description of the Capital Securities -- Distributions.” other segments.


(1)			Beneficial ownership has been determined in accordance with Rule 13d-3 under the Exchange Act. Includes shares which the following executive officers and directors have the right to acquire within 60 days through the exercise of stock options issued by Air T: Mr. Foudray, 3,750 shares; and all directors, nominees, and executive officers as a group, 3,750 shares.


(2)			Based on a total of 2,817,754 Shares of the Company’s common stock issued and outstanding as of June 30, 2023.


(3)			Includes 394,090 shares held by Farnam Street Partners, L.P., 55,793 shares held by FS Special Opportunities Fund I, LP, and 11,500 shares held by Carr of MN, LLC. Mr. Cabillot is an officer of Farnam Street Capital, Inc. (“FSC”), the general partner of Farnam Street Partners, L.P. and FS Special Opportunities Fund I, L.P. and the managing member of Carr by MN, LLC. Messrs. Cabillot and Peter O. Haeg, as officers of FSC, the general partner of the Farnam Funds, share voting and dispositive power over all of the shares of Company common stock held by the Farnam Funds. Mr. Cabillot and Mr. Haeg individually own 20,646 shares and 10,000 shares of Company common stock, respectively.


Settlement Date	Quantity	Price	Net Amount
1/3/2023	296	25.2707	$7,489.01
1/5/2023	46	23.9100	$1,101.24
1/6/2023	496	24.9763	$12,403.12
1/10/2023	76	24.2800	$1,847.56
1/11/2023	711	24.2514	$17,264.08
1/12/2023	711	27.4013	$19,503.65
2/24/2023	8	21.7125	$173.94
2/27/2023	206	23.4176	$4,830.21
3/1/2023	219	22.8027	$5,000.36
3/10/2023	167	20.6100	$3,446.88
3/16/2023	245	20.1956	$4,955.27
3/23/2023	231	21.6147	$4,999.93
3/29/2023	210	23.6786	$5,022.51
4/5/2023	200	24.8300	$5,016.00
4/12/2023	220	22.5770	$5,016.94
4/19/2023	200	24.6400	$4,978.00
TOTAL	4042		$103,048.70


(4)			Includes shares held by AO Partners I, L.P. (“AO Partners Fund”) and indirectly by AO Partners, LLC (“AO Partners”) as General Partner. AO Partners Fund and AO Partners have shared power to direct the voting and disposition of 972,584 shares. Nick Swenson as Manager of AO Partners disclaims beneficial ownership of such shares, except as to his pecuniary interest therein. Nick Swenson has sole power to direct the voting and disposition of 157,858 shares held directly and by Glenhurst Co. (which includes 94,938 shares held by Glenhurst Co.), and Groveland Capital, LLC and Groveland DST, LLC have the power to direct the voting and disposition of 53,301 shares and 169,806 shares respectively.


			●			4,000,000 authorized shares of Common Stock, par value $0.25 per share and,


			●			2,000,000 authorized shares of Preferred Stock, par value $1.00. The Preferred Stock is not registered under Section 12 of the Exchange Act.


			●			the designation, stated value and liquidation preference of such preferred stock and the number of shares offered;


			●			the dividend rate or rates (or method of calculation), the date or dates from which dividends shall accrue, and whether such dividends shall be cumulative or noncumulative and, if cumulative, the dates from which dividends shall commence to cumulate;


			●			the amount that shares of such series shall be entitled to receive in the event of our liquidation, dissolution or winding-up;


			●			the terms and conditions, if any, on which shares of such series shall be convertible or exchangeable for shares of our stock of any other class or classes, or other series of the same class;


			●			the status as to reissuance or sale of shares of such series redeemed, purchased or otherwise reacquired, or surrendered to us on conversion or exchange;


			●			the conditions and restrictions, if any, on the payment of dividends or on the making of other distributions on, or the purchase, redemption or other acquisition by us or any subsidiary, of the common stock or of any other class of our shares ranking junior to the shares of such series as to dividends or upon liquidation;


			●			any additional dividend, liquidation, redemption, sinking or retirement fund and other rights, preferences, privileges, limitations and restrictions of such preferred stock.


			●			a beneficial owner, directly or indirectly, of 15% or more of our outstanding voting stock; or


			●			an affiliate or associate of Air T who, at any time within the three years prior to the date in question was a beneficial owner, directly or indirectly, of 15% or more of the outstanding voting stock.

	•	~~The risk that contracts with major customers will be terminated or not extended;~~
	•	~~Future economic conditions and their impact on the Company’s customers;~~
	•	The Company’s ability to recover on its investments, including its investments in Delphax and other recently acquired companies, the timing and amounts of future orders under the Company’s Global Ground Support subsidiary’s contract with the United States Air Force; and
	•	The risks and uncertainties related to business acquisitions, including the ability to successfully achieve the anticipated benefits of the acquisitions, inflation rates, competition, changes in technology or government regulation, information technology disruptions, and the impact of future terrorist activities in the United States and abroad.

SEC Registration Fee	$	5,817.6
Legal Fees and Expenses		[•]
Accounting Fees and Expenses		[•]
Other		[•]
Total	$	[•]


SEC registration fee			$ 532.27
Legal fees and expenses			25,000.00
Accounting fees and expenses			10,000.00
Printing and Engraving Expenses			5,000.00
Miscellaneous fees and expenses			467.73
Total Expenses			$ 41,000.00

	~~No.~~	~~Description~~
Exhibit Number				Description of Document

1.1			Form of Agreement as to Expenses ~~(filed herewith)~~(incorporated by reference to Exhibit 1.1 of the Company’s Registration Statement on Form S-1 dated November 20, 2018 (Registration Number 333-228485))

1.2			~~3.1~~ Amendment No. 1 to Agreement as to Expenses and Liabilities*

3.1			Restated Certificate of Incorporation dated October 30, 2001, Certificate of Amendment to Certificate of Incorporation dated September 25, 2008, Certificate of Designation dated March 26, 2012, and Certificate of Designation dated December 15, 2014 ~~incorporated~~(incorporated by reference to Exhibit 3.1 of the Company’s Quarterly Report on Form ~~10 Q~~10-Q for the period ended December 31, 2014 (Commission File No. 001-35476))

3.2			~~3.2~~	Amended and Restated By-laws of the Company ~~incorporated~~(incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K dated November 21, 2012 (Commission File No. 001-35476))

3.3			~~4.1~~	~~Specimen Common Stock Certificate (to be filed by amendment)~~

	~~4.2~~	~~Form of Capital Securities Certificate of Air T Funding (filed herewith)~~

	~~4.3~~	~~Form of Capital Securities Guarantee (filed herewith)~~

	~~4.4~~	~~Form of Subscription Agreement (filed herewith)~~

	~~4.5~~	~~Form of Certificate Depositary Agreement (to be filed by amendment)~~

	~~4.6~~	~~Form of Indenture for the Debentures (filed herewith)~~

	~~4.7~~	~~Form of Debenture (filed herewith)~~

	~~4.8~~	~~Form of Certificate of Authentication (to filed by amendment)~~

	~~4.9~~	~~Form of Common Securities Certificate of Air T, Inc. (filed herewith)~~

	~~4.10~~	~~Form of Warrant (filed herewith)~~

	~~4.11~~	~~Interim Trust Agreement (filed herewith)~~

	~~4.12~~	~~Form of Capital Trust Agreement (filed herewith)~~

	~~4.13~~	~~Form of Warrant Agency Agreement (filed herewith)~~

	~~4.14~~	~~Certificate of Interim Trust dated September 28, 2018 (filed herewith)~~

	~~4.15~~	Form of Certificate of ~~Trust of Air T Funding (filed herewith)~~

	~~4.16~~	~~Form of Common Securities~~Amendment to Restated Certificate of ~~Air T, Funding (filed herewith)~~

	~~5.1~~	~~Opinion~~Incorporation for issuance of ~~[•] (to be filed by amendment)~~

	~~10.1~~	~~Aircraft Dry Lease and Services Agreement effective as of June 1, 2015 between Federal Express Corporation and Mountain Air Cargo, Inc., incorporated~~Preferred Stock (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10 Q for the quarterly period ended June 30, 2015 (Commission File No. 001-35476) (Certain information has been omitted from this exhibit pursuant to the request for confidential treatment submitted to the Securities and Exchange Commission. The omitted information has been separately filed with the Securities and Exchange Commission.)

	~~10.2~~	Premises and Facilities Lease dated November 16, 1995 between Global TransPark Foundation, Inc. and Mountain Air Cargo, Inc., incorporated by reference to Exhibit 10.5 to Amendment No. 1 on Form 10-Q/A to the Company’s Quarterly Report on Form 10-Q for the period ended December 31, 1995 (Commission File No. 001-35476)

	~~10.3~~	~~Second Amendment to Premises and Facilities Lease dated as~~3.2 of ~~October 15, 2015 between Global TransPark Foundation, Inc. and Mountain Air Cargo, Inc., incorporated by reference to Exhibit 10.3 to~~ the Company’s Annual Report on Form 10-K ~~for the fiscal year ended March 31, 2016~~filed June 27, 2022 (Commission File No. 001-35476)))

3.4			~~10.4~~ Form of Certificate of Amendment to Restated Certificate of Incorporation as to Officer Exculpation (incorporated by reference to Append i x A to the Company ’s Definitive Proxy Statement filed on Ju ly 24,2023 (Commission File No. 001-35476 ))

4.1			~~Lease Agreement dated as~~Specimen Common Stock Certificate of ~~December 17, 2013 between R.W.B.C., L.L.C. and Global Ground Support, LLC, incorporated~~Air T, Inc. (incorporated by reference to Exhibit ~~10.6~~4.1 of the Company’s Amended Registration Statement on Form S-1/A dated January 22, 2019 (Registration Number 333-228485))

4.2			Description of Registered Securities (incorporated by reference to Exhibit 4.2 of the Company’s Annual Report on Form 10-K ~~for the fiscal year ended March 31, 2014 (Commission File No. 001-35476)~~dated June 26, 2020)

4.3			~~10.5~~	~~Lease~~Interim Trust Agreement ~~between Little Mountain Airport Associates, Inc. and Mountain Air Cargo, Inc., dated June 16, 2006, incorporated~~(incorporated by reference to Exhibit ~~10.1 to~~4.11 of the Company’s ~~Quarterly Report~~Registration Statement on Form ~~10 Q for the period ended June 30, 2006 (Commission File No. 001-35476)~~S-1 dated November 20, 2018 (Registration Number 333-228485))

	~~10.6~~

4.4			~~Amendment to Lease~~Form of Amended and Restated Trust Agreement ~~between Little Mountain Airport Associates, Inc. and Mountain~~of Air ~~Cargo, Inc. dated May 27, 2014 incorporated~~T Funding (incorporated by reference to Exhibit ~~10.6~~4.10 of the Company’s Amendment No. 2 to Registration Statement on Form S-1/A dated May 29, 2019 (Registration Numbers 333-228485 and 333-228485-01))

4.5			Second Amendment to the ~~Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2015 (Commission File No. 001-35476)~~

	~~10.7~~	~~Credit~~Air T Funding Amended and Restated Trust Agreement dated ~~April 1, 2015 between Air T, Inc., Mountain Air Cargo, Inc., Global Ground Support, LLC, CSA Air, Inc. Global Aviation Services, LLC and Branch Banking and Trust Company, incorporated~~as of March 3, 2021 (incorporated by reference to Exhibit ~~10.1 to the Company’s Current Report on Form 8 K dated April 7, 2015 (Commission File No. 001-35476)~~

	~~10.8~~	~~First Amendment dated as~~4.1 of July 15, 2016 among Air T, Inc., Mountain Air Cargo, Inc., Global Ground Support, LLC, CSA Air, Inc., Global Aviation Services, LLC, Air T Global Leasing, LLC and Branch Banking and Trust Company, incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K dated ~~July 19, 2016~~March 5, 2021 (Commission File No. 001-35476))

4.6			~~10.9~~	~~Consolidated~~ Second ~~Amendment dated as~~Amended and Restated Trust Agreement of ~~August 9, 2016 among~~ Air T ~~Inc., Mountain Air Cargo, Inc., Global Ground Support, LLC, CSA Air, Inc., Global Aviation Services, LLC, Air T Global Leasing, LLC and Branch Banking and Trust Company, incorporated~~Funding dated June 23, 2021 (incorporated by reference to Exhibit ~~10.6 to~~10.31 of the Company’s ~~Quarterly~~Annual Report on Form ~~10-Q for the period ended September 30, 2016~~10-K filed June 25, 2021 (Commission File No. 001-35476))

4.7			~~10.10~~	~~Securities Purchase~~First Amendment to the Second Amended and Restated Trust Agreement of Air T Funding dated as of ~~October 2, 2015 among Delphax Technologies, Inc., Delphax Technologies Canada Limited and Air T, Inc., incorporated~~January 28, 2022.*

4.8			Form of Capital Securities Guarantee (incorporated by reference to Exhibit ~~10.1 to~~4.3 of the Company’s ~~Quarterly Report~~Amendment No. 2 to Registration Statement on Form ~~10 Q for the period ended December 31, 2015 (Commission File No. 001-35476)~~S-1/A dated May 29, 2019 (Registration Numbers 333-228485 and 333-228485-01))

4.9			~~10.11~~	Amendment to Capital Securities ~~Purchase~~Guarantee Agreement, effective as of March 31, 2021, dated as of ~~July 1, 2016 among Sardar Biglari, Biglari Capital Corp., The Lion Fund II, L.P.~~March 31, 2021, by and between Air T, Inc., and Delaware Trust Company (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated ~~July 1, 2016~~March 31, 2021 (Commission File ~~No. 001-35476)~~Nos. 001-35476 and 001-38928) )

4.10			~~10.12~~	~~Asset Purchase Agreement dated as~~Form of ~~July 18, 2016 between Contrail Aviation Support, LLC, Contrail Aviation Support, Inc. and Joseph Kuhn, incorporated~~Indenture for the Debentures (incorporated by reference to Exhibit ~~2.1 to~~4.5 of the Company’s ~~Current Report~~Amendment No. 2 to Registration Statement on Form ~~8-K~~S-1/A dated ~~July 19, 2016 (Commission File No. 001-35476)~~May 29, 2019 (Registration Numbers 333-228485 and 333-228485-01))

4.11			~~10.13~~	~~Credit Agreement~~Supplemental Indenture dated as of ~~July 18, 2016 between Contrail Aviation Support, LLC and BMO Harris Bank N.A., incorporated~~March 3, 2021 (incorporated by reference to Exhibit ~~10.2 to the Company’s Current Report on Form 8-K dated July 19, 2016 (Commission File No. 001-35476)~~

	~~10.14~~	Air T, Inc. 2005 Equity Incentive Plan, incorporated by reference to Annex C to the Company’s proxy statement on Schedule 14A for its annual meeting of stockholders on September 28, 2005, filed with the SEC on August 12, 2005 (Commission File No. 001-35476)

	~~10.15~~	Form of Air T, Inc. Director Stock Option Agreement (2005 Equity Incentive Plan), incorporated by reference to Exhibit 10.22 to the Company’s Annual Report on Form 10 K for the fiscal year ended March 31, 2006 (Commission File No. 001-35476)

	~~10.16~~	Employment Agreement dated as of March 26, 2014 between the Company and Nicholas J. Swenson, incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8 K dated March 26, 2014 (Commission File No. 001-35476)

	~~10.17~~	Form of Air T, Inc. Term Note D in the principal amount of $1,680,000 to Minnesota Bank & Trust, incorporated by reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K dated February 20, 2018 (Commission File No. 001-35476)

	~~10.18~~	Form of Air T, Inc. Amended and Restated Term Note C in the principal amount of $1,000,000 to Minnesota Bank & Trust, incorporated by reference to Exhibit 10.3 of the Company’s Current Report on Form 8-K dated February 20, 2018 (Commission File No. 001-35476)

	~~10.19~~	Form of Air T, Inc. Deed of Trust, Assignment of Leases and Rents, Security Agreement and Fixture Financing Statement, incorporated by reference to Exhibit 10.4 of the Company’s Current Report on Form 8-K dated February 20, 2018 (Commission File No. 001-35476)

	~~10.20~~	~~Form of Guarantor Acknowledgment, incorporated by reference to Exhibit 10.5 of the Company’s Current Report on Form 8-K dated February 20, 2018 (Commission File No. 001-35476)~~

	~~10.21~~	Second Loan Agreement between AirCo 1, LLC and Minnesota Bank & Trust dated February 22, 2018, incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K dated February 28, 2018 (Commission File No. 001-35476)

	~~10.22~~	Form of AirCo 1, LLC Airframe Acquisition Note in the principal amount of $5,000,000 to Minnesota Bank & Trust dated February 22, 2018, incorporated by reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K dated February 28, 2018 (Commission File No. 001-35476)

	~~10.23~~	Form of AirCo, LLC Pledge Agreement dated February 22, 2018, incorporated by reference to Exhibit 10.3 of the Company’s Current Report on Form 8-K dated February 28, 2018 (Commission File No. 001-35476)

	~~10.24~~	Promissory Note and Business Loan Agreement executed as of March 7, 2018 between Contrail Aviation Support, LLC as Borrower, and Old National Bank as the Lender, incorporated by reference to Exhibit 10.14.2 of the Company’s Current Report on Form 8-K dated March ~~8, 2018~~5, 2021 (Commission File No. 001-35476))

4.12			~~10.25~~	~~Asset Purchase Agreement by and among~~Form of Common Securities Certificate of Air T, ~~Worthington Aviation Parts,~~ Inc. ~~and Churchill Industries, Inc. dated as of April 6, 2018, incorporated~~(incorporated by reference to Exhibit ~~10.1~~4.7 of the Company’s ~~Current Report~~Amendment No. 2 to Registration Statement on Form ~~8-K~~S-1/A dated ~~April 12, 2018 (Commission File No. 001-35476)~~May 29, 2019 (Registration Numbers 333-228485 and 333-228485-01))

4.13			~~10.26~~	~~Employment Agreement between~~Form of Capital Securities Certificate of Air T ~~Inc. and Brett Reynolds dated May 7, 2018, incorporated~~Funding (incorporated by reference to Exhibit ~~10.1~~4.2 of the Company’s ~~Current Report~~Amendment No. 2 to Registration Statement on Form ~~8-K~~S-1/A dated May ~~9, 2018 (Commission File No. 001-35476) (18816904)~~29, 2019 (Registration Numbers 333-228485 and 333-228485-01))

			~~10.27~~
4.14			Form of ~~Warrant to Purchase Common Stock, incorporated~~Debenture (incorporated by reference to Exhibit ~~10.2~~4.6 of the Company’s ~~Current Report on Form 8-K dated May 9, 2018 (Commission File No. 001-35476) (18816904)~~

	~~10.28~~	Amendment No. 1 to Asset Purchase Agreement by and among Air T, Inc., Worthington Aviation, LLC, Worthington Aviation Parts, Inc., and Churchill Industries, Inc., dated as of April 27, 2018, incorporated by reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K dated May 9, 2018 (Commission File No. 001-35476) (18818205)

	~~10.29~~	Amendment No. 2 to ~~Asset Purchase~~Registration Statement on Form S-1/A dated May 29, 2019 (Registration Numbers 333-228485 and 333-228485-01))

5.1			Opinion of Winthrop & Weinstine, P.A.*

10.1			Form of Depositary Agreement ~~by and among Air T, Inc., Worthington Aviation, LLC, Worthington Aviation Parts, Inc., and Churchill Industries, Inc., dated as~~(including depositary receipt) (to be filed)

10.2			Form of ~~May 2, 2018, incorporated by reference to Exhibit 10.3~~Letter of Transmittal (to be filed)