Air T, Inc. Announces Amendment to Material Definitive Agreement and Potential Investment in Subsidiary

Key Highlights for Investors

• Material Amendment Filed: Air T, Inc. (NASDAQ: AIRT) has filed Amendment No. 1 to its Current Report on Form 8-K to clarify and revise the terms regarding a major transaction with Arena Aviation Partners V.
• Potential \$10 Million Investment: The Company, through its subsidiary Crestone Air Partners, Inc. (“Crestone”), has entered into a non-binding term sheet with a financial investor considering a \$10 million investment in a new holding company (“NewCo”) via convertible preferred equity.
• Implied Valuation and Ownership: The initial conversion price values NewCo at \$80 million post-money, with the investor potentially acquiring approximately 12.5% ownership on an as-converted basis. The deal includes standard anti-dilution protections and adjustments.
• Performance-Based Upside: The term sheet includes an “earn-out” ratchet, allowing the valuation to rise by up to \$40 million based on certain consolidated EBITDA targets, potentially taking NewCo’s valuation as high as \$120 million if targets are met.
• Management Investment in NewCo: Negotiations are ongoing with Crestone’s management to invest their own funds for a minority stake in NewCo, expected not to exceed 5%.
• Transaction Status: The term sheet is non-binding, and no definitive agreement has been executed. There is no assurance that any transaction will be completed, or as to its timing, terms, structure, valuation, or amount of proceeds.

Details of the Amended Filing and Transaction Structure

On March 8, 2026, Air T, Inc., through its wholly owned subsidiary Crestone Air Partners, Inc., entered into a Share Purchase Agreement and announced a non-binding term sheet with an unnamed financial investor. The amendment to the prior 8-K, filed on March 10, 2026, specifically revises and clarifies the anticipated consideration payable in connection with this transaction.

The key terms under negotiation are as follows:

• Investment Amount: \$10 million in convertible preferred equity into NewCo.
• Implied Valuation: The conversion price implies NewCo has an \$80 million as-converted valuation. The investor would hold approximately 12.5% of NewCo if converted, subject to anti-dilution and other customary adjustments.
• Earn-Out Mechanism: The agreement includes an earn-out “valuation ratchet” that could increase the overall valuation by up to \$40 million, should NewCo achieve certain consolidated EBITDA targets.
• Management Participation: Crestone management is being offered the opportunity to invest and acquire a minority interest in NewCo, not expected to exceed 5%.
• Non-Binding Nature: The term sheet is explicitly non-binding. All terms are subject to ongoing legal, structural, and tax review, and there is no guarantee the transaction will be finalized.

Potential Impact and Importance for Shareholders

• Price Sensitive Information: If finalized, the transaction would represent a significant capital injection into a core Air T subsidiary and could materially impact Air T’s consolidated financial position and future earnings potential. The implied valuations and the earn-out structure indicate a potentially significant uptick in subsidiary value if performance targets are met, which could enhance shareholder value.
• Risks and Uncertainties: The Company stresses that the term sheet is non-binding and subject to change. There is no certainty that a transaction will proceed, and terms may differ from those currently described. Investors should be cautious regarding the outcome and timing.
• Forward-Looking Statements: The Company notes that this announcement contains forward-looking statements subject to risks and uncertainties that could cause actual results to differ materially from current expectations.

Other Information

• The amendment also includes additional disclosure under Item 8.01, but no other aspects of the original report have been amended.
• Air T, Inc. is incorporated in Delaware and based in Charlotte, NC. Its common stock trades on the NASDAQ Capital Market under the symbol “AIRT”, and its 8% Cumulative Capital Securities (“AIP”) trade as AIRTP on the NASDAQ Global Market.

Disclaimer: This article is a summary and interpretation of regulatory filings made by Air T, Inc. Investors should not rely solely on this summary and should read all official filings and consult their financial advisers before making investment decisions. Forward-looking statements are subject to risks and uncertainties and there can be no assurance that anticipated events will occur as described.

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