17.	Subsequent Events

Management performs an evaluation of events that occur after the balance sheet date but before the condensed consolidated financial statements are issued for potential recognition or disclosure of such events in its condensed consolidated financial statements.

Acquisitions

October 3, 2016,

a newly formed subsidiary of the Company, Global Aviation Partners LLC, acquired

100%

of the outstanding equity interests of Jet Yard, LLC (“Jet Yard”) from the holder thereof. Jet Yard is registered to operate a repair station under Part

145

of the regulations of the Federal Aviation Administration and its principal asset is a contract with Pinal County, Arizona to lease approximately

48.5

acres of land at the Pinal Air Park in Marana, Arizona. Jet Yard was organized in

2014,

entered into the lease in

June 2016

and has maintained de minimus operations since its formation. 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. Because the rental expense will be accounted for on a straight-line basis over the term of the lease, the rental expense recorded for this lease by the Company in the initial years of the lease will exceed the cash payments required to be made by Jet Yard under the terms of the lease during this period. 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.

While the Company plans for Jet Yard to expand its operations to offer aircraft storage, disassembly and teardown services, there can be

assurance that Jet Yard’s operations will expand as anticipated or that it will complete construction of facilities required under the lease within the time periods specified in the lease. The acquired Jet Yard business will be included in the Company’s commercial jet engine segment.

Pursuant to an Asset Purchase Agreement (the “Asset Purchase Agreement”) effective as of

October 31, 2016,

the Company

’s Global Aviation Services, LLC subsidiary (“GAS”), acquired, effective as of

October 1, 2016,

substantially all of the assets of D&D GSE Support, Inc. (“D&D”) which was in the business of marketing, selling and providing aviation repair, equipment, parts, and maintenance sales services and products at the Fort Lauderdale airport. The acquired D&D business will be operated by GAS and included in the Company’s ground support services segment.

The total amount paid at closing in connection with these acquisitions was

$415,000,

with an additional

$100,000

due within

days after closing and an additional

$100,000

payable in equal monthly installments of

$16,666.66

commencing on

November 1, 2016,

the total amount of such payments being subject to specified closing date adjustments. Additional earn-out payments of up to

$100,000

may

be payable based on specified performance for the

twelve

-month period ending

September 30, 2017.

Construction Loan

October 31, 2016,

the Company and its subsidiaries, Mountain Air Cargo, Inc., Global Ground Support, LLC, CSA Air, Inc., Global Aviation Services, LLC, Air T Global Leasing, LLC, Global Aviation Partners LLC and Jet Yard, LLC entered into a Loan Agreement dated as of

October 31, 2016 (

the “Construction Loan Agreement”) with BB&T to borrow up to

$1,480,000

to finance the acquisition and development of Company

’s new corporate headquarters facility to be located in Denver, North Carolina. Under the Construction Loan Agreement, the Company

may

make monthly drawings to fund construction costs until

October 2017.

Borrowings under the Construction Loan Agreement bear interest at the same rate charged under the Revolving Credit Facility. Monthly interest payments begin in

November 2016.

Monthly principal payments (based on a

-year amortization schedule) are to commence in

November 2017,

with the final payment of the remaining principal balance due in

October 2026.

Borrowings under the Construction Loan Agreement are secured by a mortgage on the new headquarters facility and a collateral assignment of the Company’s rights in life insurance policies with respect to certain former executives, as well as the same collateral securing borrowings under the Revolving Credit Facility.