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Equity Method Investments
 3 Months Ended
Jun. 30, 2024
Equity Method Investments and Joint Ventures [Abstract]  
Equity Method Investments Equity Method Investments
The Company’s investment in Lendway, Inc. - NASDAQ: LDWY ("Lendway"), formerly Insignia Systems, Inc. ("Insignia"), is accounted for under the equity method of accounting. The Company elected a three-month lag upon adoption of the equity method. On August 2, 2023, Insignia reincorporated in the state of Delaware as Lendway, Inc. Subsequent to reincorporation, Lendway sold its legacy business on August 4, 2023 and pivoted the business towards specialty agricultural finance. On February 26, 2024, Lendway acquired Bloomia B.V. ("Bloomia"), marking its first investment in specialty agriculture and underscoring its strategy of targeting high-quality agricultural assets and enterprises. As of June 30, 2024, the Company owned 0.5 million Lendway shares, representing approximately 27.9% of Lendway's outstanding shares.
The Company's 20.1% 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, with a basis difference decrease of $0.3 million. The Company recorded a basis difference adjustment of $12.0 thousand for the three months ended June 30, 2024.
CCI and Lendway's combined summarized unaudited financial information for the three months ended March 31, 2024 and 2023 is as follows (in thousands):
March 31, 2024March 31, 2023
Revenue$45,757 $51,157 
Gross Profit6,006 7,803 
Operating income1,206 5,261 
Net income$1,102 $5,116 
On May 5, 2021, the Company formed an aircraft asset management business called Contrail Asset Management, LLC ("CAM"), and an aircraft capital joint venture called Contrail JV II LLC ("CJVII"). The venture focuses on acquiring commercial aircraft and jet engines for leasing, trading and disassembly. The joint venture, CJVII, was formed as a series LLC ("CJVII Series"). It consists of several individual series that target investments in current generation narrow-body aircraft and engines, building on Contrail’s origination and asset management expertise. CAM was formed to serve two separate and distinct functions: 1) to direct the sourcing, acquisition and management of aircraft assets owned by CJVII Series as governed by the Management Agreement between CJVII and CAM (“Asset Management Function”), and 2) to directly invest into CJVII Series alongside other institutional investment partners (“Investment Function”).
CAM has two classes of equity interests: 1) common interests and 2) investor interests. Neither interest votes as the entity is operated by a Board of Directors. The common interests of CAM relate to its Asset Management Function. The investor interests of CAM relate to the Company’s and Mill Road Capital’s (“MRC”) investments through CAM into CJVII (the Investment Function) and ultimately into the individual CJVII Series. With regard to CAM’s common interests, the Company currently owns 90% of the economic common interests in CAM, and MRC owns the remaining 10%. MRC invested $1.0 million directly into CAM in exchange for 10% of the common interests. For the Asset Management Function, CAM receives origination fees, management fees, consignment fees (where applicable) and a carried interest from the direct investors into each CJVII Series. Such fee income and carried interest will be distributed to the Company and MRC in proportion to their respective common interests.
The Company determined that CAM is a variable interest entity and that the Company is not the primary beneficiary. This is primarily the result of the Company's conclusion that it does not control CAM’s Board of Directors, which has the power to direct the activities that most significantly impact the economic performance of CAM. Accordingly, the Company does not consolidate CAM and has determined to account for this investment using equity method accounting. The Company accounts for its investment in CAM using the hypothetical liquidation at book value ("HLBV") method without a reporting lag. The HLBV method uses a balance sheet approach to capture changes in the Company's claim on CAM's net assets from a period-end hypothetical liquidation at book value. This approach provides a more accurate reflection of the Company's investment in CAM, compared to recording its proportionate share of income or loss.
CAM's summarized unaudited financial information, including both common interests and investor interests, for the three months ended June 30, 2024 and 2023 is as follows (in thousands):
June 30, 2024June 30, 2023
HLBV net assets$27,051 $25,434 
Contributions— 457 
Distributions$1,613 $428 
Investment balances for the Company's equity method investees as of June 30, 2024 and March 31, 2024 is as follows (in thousands):
Investment
June 30, 2024March 31, 2024
Lendway
$2,049 $2,339 
CCI4,397 3,723 
CAM7,279 7,397 
Other2,305 3,194 
Total$16,030 $16,653 
Net income (loss) attributable to Air T, Inc. stockholders for the Company's equity method investees, including basis difference adjustments, during the three months ended June 30, 2024 and 2023 is as follows (in thousands):
Investment
June 30, 2024June 30, 2023
Lendway
$(290)$446 
CCI674 683 
CAM1,495 (495)
Other44 57 
Total$1,923 $691