11.	LEASE ARRANGEMENTS

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

The Company leases 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 provides for monthly rent of

$14,862

and expires on

January 31, 2018,

though the lease

may

be renewed by us for

three

additional

two

-year option periods through

January 31, 2024.

The Company relocated its corporate offices to an owned facility in

July 2017

and does

not

expect to renew this lease.

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.

GGS leases its production facility under an agreement that extends through

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.

Delphax

Canada leased its production facility in Mississauga, Ontario under an agreement extending through

August 2018.

Annual rents remaining under the agreement were CDN

$384,000

(approximately

$288,000

using the

March 31, 2017

exchange rate) per year. In addition, Delphax Canada was obligated to pay as additional rent the related operating expenses of the landlord. Under the terms of the lease, Delphax Canada is also subject to a facility restoration obligation. This lease has been terminated effective upon removal of the property foreclosed upon by Air T, see Note

and Note

24.

Delphax has office space in the United Kingdom under an operating lease that extends through

January

201

The annual lease payment for this facility is

£62,400

(approximately

$78,000

using the

March 31, 2017

exchange rate). In addition to the contracted lease amount, the lease payments include a pro rata portion of the operating expenses incurred by the landlord.

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.

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 under a lease agreement with Pinal County, Arizona. The lease expires in

May 2046

with an option to renew 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 provides for an initial annual rent of

$27,000,

which rental rate escalates based on a schedule in annual increments during the

first

seven

years of the lease (at which time the annual rental rate would be

$152,000

), and increases by an additional

five

percent for each

three

-year period thereafter. 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, which includes, as the initial phase, the construction of a demolition pad to be completed by

March 2017

and, as the final and most significant phase, the construction of an aircraft maintenance hangar large enough to house a Boeing

B777

300

by the

first

quarter of

2021.

The construction of the demolition pad specified under the lease has

not

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

March 31, 2017

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

March 31, 2017

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

one

year are as follows:

Year ended March 31,
2018	$	3,256,000
2019		2,076,000
2020		1,453,000
2021		842,000
2022		725,000
Thereafter		5,103,000
Total minimum lease payments	$	13,455,000

The Company

’s rent expense excluding Delphax for operating leases totaled approximately

$3,872,000

and

$3,038,000

for fiscal

2017

and

2016,

respectively, and includes amounts to related parties of

$289,000

and

$178,000

in fiscal

2017

and

2016,

respectively. Delphax’s rent expense for the fiscal year ended

March 31, 2017

was approximately

$391,000

compared to

$226,000

from

November 24, 2015

through

March 31, 2016.