Equity Method Investments

3 Months Ended

Jun. 30, 2022

Equity Method Investments and Joint Ventures [Abstract]

The Company’s investment in Insignia Systems, Inc. - NASDAQ: ISIG (“Insignia”) is accounted for under the equity method of accounting. The Company has elected a three-month lag upon adoption of the equity method. As of June 30, 2022, the number of Insignia's shares owned by the Company was 0.5 million, representing approximately 27% of the outstanding shares. During the fiscal year ended March 31, 2021, due to loss attributions and impairments taken in prior fiscal years, the Company's net investment basis in Insignia was reduced to $0. As such, the Company did not record as of June 30, 2022 any additional share of Insignia's net income for the three months ended March 31, 2022 but applied it to its accumulated deferred net loss below zero basis. On August 23, 2021, Insignia restated its 10-K for the fiscal year ended December 31, 2020 and its 10-Q for the quarter ended March 31, 2021. The Company evaluated these restatements and determined that they would not result in any additional impact on the Company's condensed consolidated financial statements.

The Company's 20.91% investment in Cadillac Casting, Inc. ("CCI") is accounted for under the equity method of accounting. Due to the differing fiscal year-ends, the Company has elected a three-month lag to record the CCI investment at cost, with a basis difference of $0.3 million. At December 31, 2021, the Company determined that it has suffered from an other-than-temporary impairment in its investment in CCI and recorded an impairment charge of $0.3 million. The Company recorded income of $0.3 million as its share of CCI's net income for the three months ended June 30, 2022, along with a basis difference adjustment of $12.5 thousand. The Company's net investment basis in CCI is $2.9 million as of June 30, 2022.

Summarized unaudited financial information for the Company's equity method investees for the three months ended March 31, 2022 and 2021 is as follows (in thousands):


	Three Months Ended
	March 31, 2022		March 31, 2021
Revenue	$	35,602	$	30,273
Gross Profit	4,375		807
Operating income (loss)	1,981		(3,095)
Net income (loss)	1,750		(2,145)
Net income (loss) attributable to Air T, Inc. stockholders	$	308	$	(295)