Air T, Inc. Receives NASDAQ Notice Letter

MAIDEN, N.C., July 24, 2017 /PRNewswire/ -- Air T, Inc. (Air T) (NASDAQ: AIRT) announced today that it has received an anticipated letter from the Listing Qualifications Department of The NASDAQ Stock Market ("NASDAQ") notifying the Company of its noncompliance with NASDAQ Listing Rule 5250(c)(1) because the Company has not yet filed its Annual Report on Form 10-K for the year ended March 31, 2017 ("Form 10-K"). 

Under the NASDAQ Listing Rules, the Company has 60 days from the receipt of the letter to submit a plan to NASDAQ as to how it plans to regain compliance with NASDAQ's continued listing requirements.  The Company intends to submit a compliance plan on or prior to that date. If NASDAQ accepts the Company's plan, NASDAQ may grant an exception of up to 180 calendar days from the Form 10-K's due date, or up to January 10, 2018, to regain compliance.  The Company may regain compliance at any time during this 180-day period upon filing with the SEC its Form 10-K, as well as all subsequent required periodic financial reports that are due within that period.  If NASDAQ does not accept the Company's plan, the Company will have the opportunity to appeal that decision to a NASDAQ Hearing Panel before any delisting occurs.

The Company intends to regain compliance with NASDAQ's filing requirements, and will file the Form 10‑K, as soon as practicable.

The NASDAQ notification of noncompliance has no immediate effect on the listing of Air T's common stock on the NASDAQ Stock Market.

On June 30, 2017, the Company filed a Form 12b-25 Notification of Late Filing with the Securities and Exchange Commission (the "SEC") regarding its delayed Form 10-K.  At that time, the Company expected that it would be able to file the Form 10-K within the 15-day extension period provided by Form 12b-25.  The Company subsequently determined that it would be unable to do so, as the Company required additional time to fully consider appropriate attribution and purchase accounting treatment for its acquisition of certain equity interests in Delphax Technologies Inc. ("Delphax") in November of 2015.

Since its November 2015 acquisition of equity interests in Delphax, the Company's consolidated financial statements have reflected the attribution of 38 percent of Delphax's net losses to Air T, Inc. stockholders and 62 percent of such losses to the holders of non-controlling interests of Delphax. The 38 percent reflects the Company's effective ownership percentage in Delphax common stock based on its ownership of convertible Series B Preferred Stock of Delphax. A provision of the Stock Purchase Warrant ("Warrant") issued by Delphax to the Company in November 2015 entitles the Company to receive dividend-equivalent payments in the event of any Delphax equity distributions as though the Company had already exercised the Warrant. This provision was structured to protect Air T, Inc. against dilution in its Warrant rights in the event of any unanticipated equity distribution by Delphax. Because this provision would entitle Air T, Inc. to a possible payment greater than the 38 percent share of the distribution attributable to its ownership of the Delphax Series B Preferred Stock, the Company is currently reassessing whether this provision should have had any impact on the attribution of Delphax losses between Air T, Inc. and the non-controlling Delphax interest holders. Should the Company's reassessment result in a change to the attribution approach, a larger share of Delphax historical losses would be attributed to Air T, Inc. stockholders for financial reporting purposes. Likewise a larger share of future Delphax income or losses would be attributed to Air T, Inc. stockholders. However, such changed attribution would have no impact on the Company's historical reported or future consolidated net income (loss) or consolidated cash flows from operating, investing or financing activities.

The Company is also reviewing the impact of the above-mentioned Warrant on purchase accounting for its acquisition of interests in Delphax. The resolution of this matter is not anticipated to have any impact on our historical reported or future consolidated cash flows.

About Air T, Inc.

Established in 1980, Air T, Inc. is a diversified holding company with four core industry segments: overnight air cargo, aviation ground support equipment manufacturing, aviation ground support maintenance services, and commercial jet engines and parts. Our ownership interests consist of a broad set of operating and financial assets that are designed to expand, strengthen and diversify Air T's cash earnings power.  Our goal is to build on Air T's core businesses, to expand into adjacent industries, and when appropriate, to acquire companies that we believe fit into the Air T family.  For more information, visit www.airt.net.

Cautionary Note Regarding Forward-looking Statements

This press release contains statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.  These forward-looking statements include, but are not limited to, plans, objectives, expectations and intentions and other statements contained in this press release that are not historical facts and statements identified by words such as "expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates," "outlook" or words of similar meetings.   These statements are based upon our current expectations, beliefs and various assumptions, and speak only as of the date hereof.  There can be no assurance that we will realize these expectations or that these beliefs will prove correct.  Examples of forward-looking statements include, but are not limited to, statements we make regarding the timing of the filing of the Form 10-K.  Numerous factors, many of which are beyond our control, could cause actual results to differ materially from those expressed as forward looking statements.  These factors include, but are not limited to, unanticipated delays or other events that could prevent Air T from completing the filing of its Form 10-K within the expected time period, 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 Technologies, Inc.; the timing and amounts of future orders under the Company's Global Ground Support subsidiary's contract with the United States Air Force; inflation rates; competition; changes in technology or government regulation; information technology disruptions; the impact of future terrorist activities in the United States and abroad; and other factors that are described in the "Risk Factors" section in the Company's Annual Report on Form 10-K  filed with the SEC on June 29, 2016 and in the Company's other filings with the SEC, which are available on the SEC's website at www.sec.gov.  A forward-looking statement is neither a prediction nor a guarantee of future events or circumstances, and those future events or circumstances may not occur. The Company is under no obligation, and it expressly disclaims any obligation, to update or alter any forward-looking statements, whether as a result of new information, future events or circumstances or other factors arising or coming to our attention after the date hereof.

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SOURCE Air T, Inc.