Notes: January 7, 2020 -- Air T, Inc. (NASDAQ: AIRT) (“Air T”) announced today that a one-for-ten reverse split of its Alpha Income Preferred (AIP) securities (NASDAQ: AIRTP) will be completed effective January 14, 2020. The record date for the reverse split will be January 14, 2020, and as of that date, the CUSIP number for the AIP will be 00919P120. Cash will be paid for fractional shares of AIP. As a result of the reverse split, effective January 14, 2020, the stated value of the AIP will be $25.00 per share. Future cash distributions on the AIP will be in the amount of $0.50 per share (remaining at a rate of 8.0% per annum) commencing with the next distribution payment date of February 15, 2020. Warrants to purchase AIP (“Warrants”) (NASDAQ:AIRTW) will remain outstanding, with the number of shares of AIP that can be purchased and the exercise price per share to be adjusted for the reverse split. As a result, effective January 14, 2020, each Warrant will confer upon its holder the right to purchase one-tenth of a share of AIP for $2.40, representing a 4% discount to the new stated value of $2.50 for one-tenth of a share. ________________ The Issuance of 8,400,000 shares of the Alpha Income Trust Preferred Securities (also referred to as the 8.0% Cumulative Capital Securities)?????, par value $2.50 per share (the Capital Securities or, individually each a Capital Security), upon the exercise of 8,400,000 warrants (the Warrants) to purchase an aggregate of 8,400,000 Capital Securities, and to the initial distribution of the Warrants. Contemporaneously with the effectiveness of the prospectus, the company is distributing the Warrants registered to holders of Common Stock as a dividend as well as Capital Securities that are not registered. In the dividend distribution, each holder of Common Stock will receive (a) the number of Warrants per share of Common Stock that is equal to 8,400,000 divided by the number of outstanding shares of Common Stock on the date of the distribution, rounded to the nearest Warrant, and (b) the number of Capital Securities per share of Common Stock that is equal to 1,600,000 divided by the number of outstanding shares of Common Stock on the date of the distribution, rounded to the nearest Capital Security. The 1,600,000 Capital Securities distributed as a dividend are not registered hereunder. Each Warrant entitles the holder to purchase one Capital Security at an exercise price of $2.40 per Capital Security, which represents a discount on the $2.50 face value per Capital Security.