12.	Financing Arrangements

Borrowings of the Company and its subsidiaries are summarized below at

September 30, 2018

and

March 31, 2018,

respectively. AirCo, Contrail Aviation (“Contrail”) and Worthington are subsidiaries of the Company in the commercial jet engines and parts segment.

	September 30, 2018			March 31, 2018			Maturity Date

Revolver	$	6,972,133		$	-		November 30, 2019
Term Note A		9,250,000			9,750,000		January 1, 2028
Term Note B		4,625,000			4,875,000		January 1, 2028
Term Note D		1,640,800			1,674,400		January 1, 2028
Air T Debt		22,487,933			16,299,400

Revolver		5,000,000			5,000,000		February 21, 2019
Term Loan		716,775			2,404,775		March 26, 2019
AirCo Debt		5,716,775			7,404,775

Revolver		-			14,826,062		May 5, 2019
Term Loan		9,515,465			9,920,000		January 26, 2021
Term Loan		18,000,000			-		September 14, 2021
Contrail Debt		27,515,465			24,746,062

Term Loan		3,400,000			-		November 30, 2019
MB&T - Revolver		650,000			-		November 30, 2019
Worthington Debt		4,050,000			-

Total Debt		59,770,173			48,450,238

Less: Unamortized Debt Issuance Costs		(404,638	)		(365,288	)
Total Debt, net	$	59,365,535		$	48,084,950

September 30, 2018,

our contractual financing obligations, including payments due by period, are as follows:

Due by	Amount
September 30, 2019	$	15,287,544
September 30, 2020		17,473,185
September 30, 2021		16,195,244
September 30, 2022		1,567,200
September 30, 2023		1,567,200
Thereafter		7,679,800
		59,770,173
Less: Unamortized Debt Issuance Costs		(404,638	)
	$	59,365,535

Refer to the Company’s Form

-K for the year ended

March 31, 2018

for a detailed explanation of existing debts. For the quarter ended

September 30, 2018,

the Company entered the following debt obligations:

September

14,

2018,

Contrail and its wholly-owned subsidiary Contrail Aviation Leasing, LLC (“CAL”) entered into a new Loan Agreement with Old National Bank (“ONB”). The Loan Agreement provides for a borrowing by Contrail and CAL of

$18,000,000

with a maturity date of

September

14,

2021.

The borrowing under the Loan Agreement bears interest at a variable rate equal to the

-month LIBOR plus

375

basis points. Contrail and CAL used proceeds of the new loan in connection with the purchase by CAL of

two

aircraft, each an Airbus

A319

100.

The Company assumes various financial obligations and commitments in the normal course of its operations and financing activities. Financial obligations are considered to represent known future cash payments that the Company is required to make under existing contractual arrangements such as debt and lease agreements.

As part of the Company’s interest rate risk management strategy, the Company uses derivative instruments to minimize significant unanticipated earnings fluctuations that

may

arise from rising variable interest rate costs associated with existing borrowings (Air T Term Note A and Term Note D). To meet these objectives, the Company entered into interest rate swaps in the notional amounts consistent with the outstanding debt to provide a fixed rate of

4.56%

and

5.09%,

respectively, on Term Notes A and D. The swaps mature in

January 2028.

As of

August 1, 2018,

these swap contracts have been designated as cash flow hedging instruments and qualified as effective hedges in accordance with ASC

815

30.

The effective portion of changes in the fair value of these instruments is recorded in other comprehensive income (loss) and is reclassified into the condensed consolidated statement of income (loss) as interest expense in the same period in which the underlying hedge transaction affects earnings. As of

September 30, 2018

and

March 31, 2018,

the fair value of the interest-rate swap contracts was an asset of

$116,295

and a liability of

$66,706,

respectively, which is included within other non-current assets and liabilities in the condensed consolidated balance sheets. During the

six

-months ended

September 30, 2018,

the Company recorded a gain of approximately

$145,000

in the condensed consolidated statement of income (loss) due to the changes in the fair value of the instruments prior to the designation and qualification of these instruments as effective hedges. After the interest rate swaps were deemed effective hedges, the Company recorded approximately

$29,000,

net of tax, in the condensed consolidated statement of comprehensive income for changes in the fair value of the instruments.