As a holder of Common Stock, what will I receive in the special distribution?
On June 10, 2019, all holders of Common Stock of Air T, Inc. (the Company) will receive a special distribution of three securities:
- Additional Common Stock: A dividend of one additional share for every two shares already held (a 50% stock dividend, or the equivalent of a 3-for-2 stock split).
- Alpha Income Preferred Stock (AIP or Capital Securities): A fixed income trust preferred capital security with a stated value of $2.50 per share, paying quarterly distributions of 8% per annum. The Company will distribute an aggregate of 1,600,000 shares of AIP ($4,000,000 stated value).
- Warrants to Purchase AIP (Warrants): The Warrants allow the holder to purchase additional AIP at a discounted price (exercise price of $2.40 per share of AIP with a stated value of $2.50 per share). The Company will distribute an aggregate of 8,400,000 Warrants to purchase 8,400,000 shares of AIP (representing Warrants to purchase $21,000,000 in stated value of AIP). The Warrants are exercisable for one year.
Again, the distribution will be effective at 5:00 p.m. EST on June 10, 2019.
How can I trade the securities I receive?
As of market open on Monday, June 10, 2019, the Company’s Common Stock will trade on the NASDAQ Global Market, and the AIP and Warrants will also be listed on the NASDAQ Global Market under the symbols “AIRTP” and “AIRTW” respectively. No public market currently exists for the AIP or Warrants. However, starting on June 3, 2019, there will be a market for the AIP and Warrants on the NASDAQ Global Market on a “when issued” basis.
If I buy Common Stock after the Record Date, will I receive the additional securities?
Yes. Any shares of Common Stock purchased after the Record Date through the date of the distribution will trade “regular way” with “due bills”, which entitle the purchaser to receive the additional Common Stock, AIP and Warrants. Starting on June 10, 2019, the Common Stock will trade ex-dividend, with the trading price reflecting the value of the Common Stock on a post-distribution basis without the additional securities.
What securities will I hold after the distribution?
Example: A holder of 1,000 shares of Common Stock on the Record Date (market value of approximately $27,000, based on a hypothetical market price of $27.00 per share) would receive the following additional securities in the distribution on June 7, 2019: (a) 500 additional shares of Common Stock; (b) 790 AIP shares (stated value of $1,975.00); and (c) 4,150 Warrants to purchase 4,150 additional shares of AIP (stated value of $10,375.00, for an aggregate exercise price of $9,960.00, representing a discount of $415.00). Note: this example assumes 2,024,331 shares of common stock outstanding on the Record Date (based on the outstanding shares as of February 14, 2019).
After the distribution, the holder would hold the following securities:
- 1,500 shares of Common Stock, with the market value reduced to reflect the impact of the 50% stock dividend and the impact of the issuance of the AIP on the Company’s equity capital;
- 790 shares of AIP with an aggregate stated value of $1,975.00, paying quarterly distributions of 8% per annum; and
- 4,150 Warrants to purchase up to 4,150 additional shares of AIP (stated value of $10,375.00 in additional AIP, for an aggregate exercise price of $9,960.00, representing a discount of up to $415.00).
How do I transfer or trade my securities?
If you own your shares through a brokerage account, you should notify your broker of your desire to transfer your AIP or Warrants. After the date of the distribution, your broker can provide a statement indicating the securities in your account and can facilitate the sale of the AIP
or Warrants, or the purchase of additional AIP and Warrants.
If you hold your shares in an account in your name, you should contact the transfer agent of the Company, American Stock Transfer.
How do I exercise my Warrants?
If you own your shares through a brokerage account, you should notify your broker of your desire to exercise Warrants. Your broker, via DTC, can facilitate the exercise through the DTC automated warrant exercise program, including your payment of the cash exercise price to purchase AIP.
If you hold your shares directly in your name, you can obtain a transfer notice form by contacting the transfer agent of the Company, American Stock Transfer. You should complete the exercise notice and deliver it to American Stock Transfer, along with a wire transfer of $2.40 per AIP to be purchased pursuant to the exercise.
Note: The purchase of AIP through exercise of the Warrants is described in a Prospectus that you will receive in connection with the distribution. Before purchasing the AIP, you should review the information in the Prospectus carefully, including the information under the caption “Risk Factors”.
What are the terms of the Warrants?
Each Warrant entitles the holder, at any time commencing on the date of distribution and issuance, to purchase one share of AIP for $2.40, which price represents a $0.10 discount to the $2.50 face value of each share of AIP.
The Warrants will expire on the first anniversary of the date of issuance or earlier upon redemption or liquidation. The exercise price and number of shares of AIP issuable upon exercise is subject to appropriate adjustment in the event of stock dividends, stock splits, reorganizations or similar events affecting the Company’s common stock and the exercise price.
No fractional shares of AIP will be issued in connection with the exercise of a Warrant. In lieu of fractional shares, the Company will either pay the holder an amount in cash equal to the fractional amount multiplied by the exercise price or round up to the next whole share. Other terms of the Warrants and the AIP are described in the Prospectus that you will receive in connection with the distribution.
Air T, Inc. Announces Final Distribution Date and Ratios for Alpha Income Preferred Securities and Warrants and 50% Common Stock Dividend
DENVER, N.C., June 10, 2019 -- Air T, Inc. (NASDAQ: AIRT) ("Air T") announced today the final distribution date and distribution ratios for its previously announced issuance and distribution of (1) $4 million in face value of Alpha Income Preferred (AIP), a new 8%...read more
Air T, Inc. Announces Record Date and Proposed Distribution Date for Distribution of Alpha Income Preferred Securities and Warrants to Holders of its Common Stock and 50% Common Stock Dividend
DENVER, N.C., May 29, 2019 — Air T, Inc. (NASDAQ: AIRT) ("Air T") announced today the record date and proposed distribution date for its issuance and distribution of $4 million in face value of a new 8% fixed income security, Alpha Income Preferred (AIP), pro rata to...read more
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When does the Company’s fiscal year end?
Our fiscal year ends on the last day of March.
When is your annual shareholders meeting?
Air T’s annual shareholders’ meeting is usually held in August. We provide the specific date, time and place for each year’s shareholder meeting in our annual proxy statement and through this website.