▸ A significant portion of Rex’s revenues, expenses, assets, and liabilities may be denominated in Australian dollars, and fluctuations in exchange rates could adversely affect our reported results.· · · ● 1 ▸ Rex operates in a highly regulated industry, and failure to comply with applicable laws and regulations could materially adversely affect our business.· · · ● 1 ▸ Rex’s operating costs and revenues may be subject to volatility, and Rex may not be able to offset cost increases or revenue decreases through pricing or other measures.· · · ● 1 ▸ group Risks Related to Accounting and the Bargain Purchase Gain· · · ● 1 ▸ group Risks Related to Foreign Operations, Currency, and Financing Exposure· · · ● 1 ▸ The recognition of a bargain purchase gain could increase scrutiny by investors and regulators, and could lead to disputes regarding valuations and assumptions.· · · ● 1 ▸ Wage escalations and other cost-of-living adjustments under Rex's Enterprise Agreements could increase Rex's operating costs, and Rex may not be able to fully offset those increases through pricing or other measures.· · · ● 1 ▸ We incurred and assumed significant obligations in connection with the Rex Acquisition, including obligations related to CFA Debt, and we may require additional liquidity to support Rex’s operations.· · · ● 1 ▸ We may not be able to successfully integrate Rex into our operations, including our financial reporting processes, which could adversely affect our business, results of operations, and financial condition.· · · ● 1 ▸ A pandemic, epidemic or outbreak of a contagious disease in the markets in which we operate or that otherwise impacts our markets could adversely impact our business.· · ● ● 2 ▸ Although we do not expect to rely on the “controlled company” exemption, we do qualify as a “controlled company” within the meaning of the Nasdaq listing standards, and we do qualify for exemptions from certain corporate governance requirements.· · ● ● 2 ▸ Changes to U.S. tariff and import/export regulations may have a negative effect on our suppliers and/or service providers and, in turn, could have a material adverse impact on our financial condition.· · ● ● 2 ▸ Climate change, related legislative and regulatory responses to climate change, and the transition to a lower carbon economy may adversely affect our business.· · ● ● 2 ▸ Environmentally hazardous conditions could potentially adversely affect us.· · ● ● 2 ▸ Holders of the Trust Preferred Securities will generally have limited voting rights.· · ● ● 2 ▸ group RISKS RELATED TO THE COMPANY· · ● ● 2 ▸ group Risks Related to Air T Funding· · ● ● 2 ▸ group Risks Related to Environmental, Social, and Governance Issues· · ● ● 2 ▸ group Tax event redemption or investment company act redemption· · ● ● 2 ▸ The Company may cause the Junior Subordinated Debentures to be distributed to the holders of the Trust Preferred Securities.· · ● ● 2 ▸ The Company's option to extend the interest payment period could delay interest payments on the Trust Preferred Securities.· · ● ● 2 rw ▸ The covenants in the Indenture are limited.· · ● ● 2 ▸ The ranking of the Company’s obligations under the Junior Subordinated Debentures and the guarantee creates a risk that Air T Funding may not be able to pay amounts due to holders of the Trust Preferred Securities.· · ● ● 2 ▸ There are limitations on direct actions against the Company and on rights under the guarantee.· · ● ● 2 ▸ Our current financing arrangements require compliance with financial and other covenants and a failure to comply with such covenants could adversely affect our ability to operate.· ● ● ● 3 ▸ Security threats and other sophisticated computer intrusions could harm our information systems, which in turn could harm our business and financial results.· ● ● ● 3 ▸ Our business, financial condition and results of operations have been and may continue to be adversely affected by global public health issues, including the recent COVID-19 pandemic.· ● · · 1 ▸ Rising inflation may result in increased costs of operations and negatively impact the credit and securities markets generally, which could have a material adverse effect on our results of operations and the market price of our common stock.· ● · · 1 ▸ Labor inflation could impact our profitability.● · · · 1 ▸ Our business may be adversely affected by information technology disruptions.● · · · 1 ▸ Our results of operations may be affected by the value of securities we hold for investment and we may be unable to liquidate our investments in a timely manner or at full value.● · · · 1 ▸ group Risks Related to Our Investments in Securities● · · · 1 ▸ The failure of our information technology systems could adversely impact our reputation and financial performance.● · · · 1 ▸ The novel coronavirus (COVID-19) and other possible pandemics and similar outbreaks could result in material adverse effects on our business, financial position, results of operations and cash flows.● · · · 1 ▸ The transition away from LIBOR may adversely affect our cost to obtain financing and may potentially negatively impact our interest rate swap agreements.● ● · · 2 ▸ A large proportion of our capital is invested in physical assets and securities that can be hard to sell, especially if market conditions are poor.● ● ● ● 4 ▸ A material reduction in the aircraft we fly for FedEx could materially adversely affect our business and results of operations.● ● ● ● 4 ▸ A small number of stockholders has the ability to control the Company.● ● ● ● 4 ▸ An increase in interest rates or in our borrowing margin would increase the cost of servicing our debt and could reduce our cash flow and negatively affect the results of our business operations.● ● ● ● 4 ▸ As a public company, we are subject to various regulatory requirements including, but not limited to, compliance with the rules● ● ● ● 4 ▸ Because of our dependence on FedEx, we are subject to the risks that may affect FedEx’s operations.● ● ● ● 4 ▸ Compliance with the regulatory requirements imposed on us as a public company results in significant costs that may have an adverse effect on our results.● ● ● ● 4 ▸ Deficiencies in our public company financial reporting and disclosures could adversely impact our reputation.● ● ● ● 4 ▸ Despite our substantial indebtedness, we may incur significantly more debt, and cash may not be available to meet our financial obligations when due or enable us to capitalize on investment opportunities when they arise.● ● ● ● 4 rw ▸ Future acquisitions and dispositions of businesses and investments are possible, changing the components of our assets and liabilities, and if unsuccessful or unfavorable, could reduce the value of the Company and its securities.● ● ● ● 4 ▸ Future cash flows from operations or through financings may not be sufficient to enable the Company to meet its obligations.● ● ● ● 4 ▸ Higher or volatile fuel prices could affect the profitability of the aviation industry and our lessees’ ability to meet their lease payment obligations to us.● ● ● ● 4 ▸ If our cash flows and capital resources are insufficient to fund our debt service obligations or meet covenant requirements, we may be forced to seek alternatives.● ● ● ● 4 rw ▸ If our lessees encounter financial difficulties and we restructure or terminate our leases, we are likely to obtain less favorable lease terms.● ● ● ● 4 ▸ If our lessees fail to cooperate in returning our aircraft or engines following lease terminations, we may encounter obstacles and are likely to incur significant costs and expenses conducting repossessions.● ● ● ● 4 ▸ If our lessees fail to discharge aircraft liens for which they are responsible, we may be obligated to pay to discharge the liens.● ● ● ● 4 ▸ If we do not maintain sufficient liquidity, our ability to meet our payment obligations to creditors or to borrow additional funds could become impaired.● ● ● ● 4 ▸ In certain countries, an engine affixed to an aircraft may become an addition to the aircraft and we may not be able to exercise our ownership rights over the engine.● ● ● ● 4 ▸ Interruptions in the capital markets could impair our lessees’ ability to finance their operations, which could prevent the lessees from complying with payment obligations to us.● ● ● ● 4 ▸ Legacy technology systems require a unique technical skillset which is becoming scarcer.● ● ● ● 4 ▸ Legal liability may harm our business.● ● ● ● 4 ▸ Liens on our engines or aircraft could exceed the value of such assets, which could negatively affect our ability to repossess, lease or sell a particular engine or aircraft.● ● ● ● 4 ▸ Market fluctuations may affect our operations.● ● ● ● 4 ▸ Our aircraft, engines and parts could cause damage resulting in liability claims.● ● ● ● 4 ▸ Our business might suffer if we were to lose the services of certain key employees.● ● ● ● 4 ▸ Our business strategy includes acquisitions, and acquisitions entail numerous risks, including the risk of management diversion and increased costs and expenses, all of which could negatively affect the Company’s ability to operate profitably.● ● ● ● 4 ▸ Our commercial aircraft, engines and parts segment and its customers operate in a highly regulated industry and changes in laws or regulations may adversely affect our ability to lease or sell our engines or aircraft.● ● ● ● 4 rw ▸ Our dry-lease agreements with FedEx subject us to operating risks.● ● ● ● 4 ▸ Our engine values and lease rates, which are dependent on the status of the types of aircraft on which engines are installed, and other factors, could decline.● ● ● ● 4 ▸ Our holding company structure may increase risks related to our operations.● ● ● ● 4 ▸ Our inability to maintain sufficient liquidity could limit our operational flexibility and also impact our ability to make payments on our obligations as they come due.● ● ● ● 4 ▸ Our lessees may fail to adequately insure our aircraft or engines which could subject us to additional costs.● ● ● ● 4 ▸ Our overnight air cargo segment is dependent on a significant customer.● ● ● ● 4 rw ▸ Our policies and procedures may not be effective in ensuring compliance with applicable law.● ● ● ● 4 ▸ Rapid business expansions or new business initiatives may increase risk.● ● ● ● 4 ▸ group Risks Related to Our Segment Operations● ● ● ● 4 ▸ group Risks Related to Our Structure and Financing/Liquidity Risks● ● ● ● 4 ▸ Sales of deicing equipment can be affected by weather conditions.● ● ● ● 4 ▸ Strategic ventures may increase risks applicable to our operations.● ● ● ● 4 ▸ The operating results of our segments may fluctuate, particularly our commercial aircraft, engines and parts segment.● ● ● ● 4 rw ▸ To service our debt and meet our other cash needs, we will require a significant amount of cash, which may not be available.● ● ● ● 4 ▸ Upon termination of a lease, we may be unable to enter into new leases or sell the airframe, engine or its parts on acceptable terms.● ● ● ● 4 ▸ We are affected by the risks faced by commercial aircraft operators and MRO companies because they are our customers.● ● ● ● 4 ▸ We could experience significant increases in operating costs and reduced profitability due to competition for skilled management and staff employees in our operating businesses.● ● ● ● 4 ▸ We face numerous risks and uncertainties as we expand our business.● ● ● ● 4 ▸ We have risks in managing our portfolio of aircraft and engines to meet customer needs.● ● ● ● 4 ▸ We may experience losses and delays in connection with repossession of engines or aircraft when a lessee defaults.● ● ● ● 4 ▸ We may not be able to insure certain risks adequately or economically.● ● ● ● 4 ▸ Withdrawal, suspension or revocation of governmental authorizations or approvals could negatively affect our business.● ● ● ● 4 
