12.	LEASE ARRANGEMENTS

The Company has operating lease commitments for office equipment and some of its office and maintenance facilities.

The Company previously leased property used for its corporate offices from a company controlled by certain of the Company’s former officers and directors. The lease for this facility provided for monthly rent of

$14,862

and expired on

January 31, 2018.

The Company relocated its corporate offices to an owned facility in

July 2017

and did

not

renew this lease.

The Company also leases approximately

1,950

square feet of office space and approximately

4,800

square feet of hangar space at the Ford Airport in Iron Mountain, Michigan. CSA’s operations are headquartered at these facilities which are leased from a

third

party under an annually renewable agreement.

The Company leases approximately

53,000

square feet of a

66,000

square foot aircraft maintenance facility located in Kinston, North Carolina under an agreement that extends through

January 2023,

with the option to extend the lease for

four

additional

five

-year periods thereafter. The Company has calculated rent expense under the current lease term. The rental rate under the lease increases by increments for each of the

five

-year renewal periods.

GGS leases a

112,500

square foot production facility in Olathe, Kansas. The facility is leased from a

third

party under a lease agreement, which expires in

August 2019.

GAS leases several maintenance facilities across the country and an administrative office in Eagan, Minnesota. Most of the leases are on

one

-year agreements with renewal clauses, but some of these are multi-year leases extending out as far as

March 2021.

As of

March 31, 2018,

the Company leased maintenance and office space from

third

parties at a variety of other locations, at prevailing market terms. The table of aircraft presented in Part I Item

of this Form

-K lists the aircraft operated by the Company’s subsidiaries and the form of ownership.

Contrail Aviation leases a

21,000

square foot facility in Verona, Wisconsin. The lease for this facility expires on

July 17, 2021,

though Contrail Aviation has the option to renew the lease on the same terms for an additional

five

-year period. The lease provides for monthly rent of approximately

$13,000

(see Note

Jet Yard leases approximately

48.5

acres of land from Pinal County at the Pinal Air Park in Marana, Arizona. The lease expires in

May 2046,

though Jet Yard has an option to renew the lease for an additional

-year period (though the lease to a

2.6

-acre parcel of the leased premises

may

be terminated by Pinal County upon

days’ notice). The lease agreement permits Pinal County to terminate the lease if Jet Yard fails to make substantial progress toward the construction of facilities on the leased premises in phases in accordance with a specified timetable. The construction of a demolition pad required by

March 31, 2017

under the lease has

not

been completed and Jet Yard and Pinal County are in discussions with respect to improvements on the leased premises.

Delphax’s Canadian subsidiary leased a

76,734

square foot manufacturing facility in Mississauga, Ontario under a lease which has been terminated effective upon removal of the property foreclosed upon by Air T.

Delphax Solutions leases

12,206

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

July 31, 2020

and the subsidiary’s obligations under the lease have been guaranteed by Air T. 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.

AirCo leases a

20,000

square-foot facility from the shareholder of the AirCo Seller which expires on

May 1, 2018,

though AirCo

may

prior thereto terminate the lease on

-days’ notice and

may

renew the lease for up to

four

successive

one

-year terms. Total rent cost for fiscal

2018

is approximately

$121,000.

The Company renewed the lease for another term through

May 1, 2019.

March 31, 2018,

future minimum annual lease payments (foreign currency amounts translated using applicable

March 31, 2018

exchange rates) under non-cancelable operating leases with initial or remaining terms of more than

one

year are as follows:

Year ended March 31,
2019	$	3,007,000
2020		2,262,000
2021		1,400,000
2022		1,078,000
2023		885,000
Thereafter		5,381,000
Total minimum lease payments	$	14,013,000

The Company’s rent expense excluding Delphax for operating leases totaled approximately

$4,520,000

and

$3,872,000

for fiscal

2018

and

2017,

respectively, and includes amounts to related parties of

$337,000

and

$289,000

in fiscal

2018

and

2017,

respectively. Delphax’s rent expense totaled

$95,000

and

$391,000

for fiscal

2018

and

2017

respectively.