Item 1.01 Entry into a Material Definitive Agreement
On January 31, 2023, Air T, Inc. ("Company") acquired all of the issued and
outstanding common stock of Worldwide Aircraft Services, Inc., a Kansas
corporation ("Worldwide") for $3,078,021. Approximately $1,628,000 of the
purchase price was paid at closing. The remaining amount bears interest at the
rate of six percent (6%) per annum and is payable via periodic payments up to
the January 1, 2026 maturity date. Worldwide is a maintenance, repair and
overhaul business located in Springfield, Missouri.
In connection with the acquisition, the Company and Jet Yard, LLC entered
Amendment No. 2 to the Third Amended and Restated Credit Agreement ("Amendment
No. 2") with Minnesota Bank & Trust, a division of HTLF Bank, successor by
merger with MBT ("MBT"). Amendment No. 2 amends the Third Amended and Restated
Credit Agreement dated as of August 31, 2021 as amended by that certain
Amendment No. 1 to the Third Amended and Restated Credit Agreement dated June 9,
2022. Amendment No. 2 provides for a new term loan ("Term Loan F") in the amount
of $1,000,000 to help finance a portion of the consideration paid by the Company
for Worldwide. Pursuant to the amendment, the Company executed Term Note F in
favor of MBT in the original principal amount of $1,000,000. The note bears
interest at a rate equal to the greater of six percent (6%) or the prime rate
plus one percent (1%). The note obligates the Company to make monthly payments
of principal in the amount of $16,666.67 plus accrued interest commencing March
1, 2023. The note may be prepaid, in whole or part, at any time without penalty
and final payment of all amounts due under the note is due January 31, 2028.
Events of default under the Note are defined in the Credit Agreement.
In connection with the acquisition, amendment and term loan, the Company entered
into a collateral assignment of the Worldwide Stock Purchase Agreement and
Worldwide entered into a joinder to the Guaranty and the Security Agreement.
Non-borrower entities of the Company and Jet Yard also acknowledged and agreed
to the transactions.
The foregoing summary of the terms of the agreements and transactions is
qualified in their entirety by reference to Amendment No. 2 and Term Note F
filed as Exhibits 10.1 - 10.2 herewith, which are incorporated herein by
reference.
Item 2.01 Completion of Acquisition or Disposition of Assets
To the extent required by Item 2.01 of Form 8-K, the information contained in
Item 1.01 of this Current Report on Form 8-K is incorporated by reference into
this Item 2.01. The acquisition of Worldwide is not material to the Company and
therefore no financial statements are required to be filed with this Current
Report on Form 8-K.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant
To the extent required by Item 2.03 of Form 8-K, the information contained in
Item 1.01 of this Current Report on Form 8-K is incorporated by reference into
this Item 2.03.
Item 9.01 Financial Statements and Exhibits
10.1 Form of Amendment No. 2 to Third Amended and Restated Credit Agreement
between Air T, Inc., Jet Yard, LLC and MBT dated as of January 31, 202310.2 Form of Term Note F dated January 31, 2023
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