14.	Subsequent Events

Management performs an evaluation of events that occur after the balance sheet date but before consolidated financial statements are issued for potential recognition or disclosure of such events in its consolidated financial statements.

Delphax Canada

In light of continuing events of default under the Delphax Senior Credit Agreement and the conclusion of final production run by Delphax Canada of consumable products for Delphax

’s legacy printing systems, on

July 13, 2017,

the Company delivered a demand for payment and Notice of Intention to Enforce Security to Delphax Canada. On

August 10, 2017,

the Company foreclosed on all personal property and rights to undertakings of Delphax Canada. The Company foreclosed as a secured creditor with respect to amounts owed to it by Delphax Canada under the Delphax Senior Credit Agreement. The Company provided notice of its intent to foreclose to Delphax Canada and its secured creditors and shareholder on

July 26, 2017.

The outstanding amount owed to the Company by Delphax Canada under the Delphax Senior Credit Agreement on

July 26, 2017

was approximately

$1,510,000.

The Company also submitted an application to the Ontario Superior Court of Justice in Bankruptcy and Insolvency (the "Ontario Court") seeking that Delphax Canada be adjudged bankrupt. On

August 8, 2017,

the Ontario Court issued an order adjudging Delphax Canada to be bankrupt. The recipients of the foreclosure notice did

not

object to the foreclosure or redeem. As a result, the foreclosure was completed on

August 10, 2017,

and the Company accepted the personal property and rights to undertakings of Delphax Canada in satisfaction of the amount secured by the Delphax Senior Credit Agreement.

A newly organized subsidiary of Air T leases

12,206

square feet of space in a building located in Mississauga, Ontario. The lease commenced on

August 1, 2017

and terminates on

July 31, 2020.

Annual rent under the lease escalates annually, with annual rent of approximately

$94,600

(CDN) for the

first

year and approximately

$97,000

(CDN) in the

third

year. The subsidiary

’s obligations under the lease have been guaranteed by Air T. The lease of production facilities in Mississauga, Ontario by Delphax Canada has been terminated effective upon removal of the property foreclosed upon by Air T.

Amendment

to Revolving Credit Facility

Pursuant to a

2017

Amendment to Security Agreement and Consent and Waiver effect

ive as of

August 3, 2017

among Air T, MAC, GGS, CSA, GAS, ATGL, Stratus Aero Partners LLC, Jet Yard, AirCo and the lender under the Revolving Credit Facility, the lender agreed to waive the default under the agreement governing the Revolving Credit Facility arising from the failure of the Company to deliver to such lender audited consolidated financial statements for the fiscal year ended

March 31, 2017

within

120

days after the end of such fiscal year and the requirement that a subsidiary newly organized in Ontario, Canada (the “Ontario Subsidiary”) join the agreement governing the Revolving Credit Facility as a borrower, to consent to Air T guarantying obligations of the Ontario Subsidiary under a lease for facilities in Ontario and to amend the security agreement securing obligations under the Revolving Credit Facility to, among other things, require a pledge of only

65%

of the outstanding equity of foreign subsidiaries.

August 29, 2017,

the Company and the above-listed subsidiaries entered into a Sixth Amendment and Waiver Agreement effective as of

August 29, 2017

with the lender under the Revolving Credit Facility to amend the Credit Agreement to extend the maturity of the Revolving Credit Facility from

April 1, 2018

April 1, 2019,

to adjust the definition of “Consolidated EBITDA” to exclude from the calculation of Consolidated EBITDA, during the period from

January 1, 2016

through

June 30, 2017,

any unrealized gains or losses attributable to the ownership of equity interests in Insignia Systems, Inc., and to waive the default arising under the Credit Agreement from the failure of the Company to deliver (i) consolidated financial statements for the fiscal quarter that ended

June 30, 2017

within the time period required under the Credit Agreement and (ii) the covenant compliance certificates for the fiscal quarters that ended

March 31, 2017

and

June 30, 2017

within the time periods required under the Credit Agreement.

Pursuant to a Seventh Amendment and Waiver Agreement effective as of

October 6, 2017 (

the “Seventh Amendment”) among Air T, the above-listed subsidiaries and the lender under the Revolving Credit Facility, the lender waived the requirement that a newly formed limited purpose subsidiary of the Company join the agreement governing the Revolving Credit Facility as a borrower and, in connection with the restatement of the Company

’s consolidated financial statements for certain periods within the fiscal year ended

March 31, 2017,

the lender also waived compliance with the minimum tangible net worth covenant under the Revolving Credit Facility at the

December 31, 2016

and

March 31, 2017

measurement dates.