Financing Arrangements

3 Months Ended

Jun. 30, 2024

Debt Disclosure [Abstract]

Financing Arrangements

Financing Arrangements

Borrowings of the Company and its subsidiaries are summarized below at June 30, 2024 and March 31, 2024, respectively.

On May 30, 2024, Contrail, a majority-owned subsidiary of the Company, entered into a Membership Interest Redemption and Earnout Agreement (the “Redemption Agreement”) with OCAS, Inc., a corporation owned by the Chief Executive Officer of Contrail, Joe Kuhn (the “Seller”). Pursuant to the Redemption Agreement, Contrail agreed to purchase and redeem from the Seller, 16% of its 21% interest in Contrail, effective as of April 1, 2024. The purchase price for the redeemed interest is $4.6 million, plus an earnout amount. The cash purchase price is payable pursuant to a secured, subordinated promissory note ("OCAS Loan"), payable beginning on May 1, 2024 and monthly thereafter for a 12-month period of interest payments only with the outstanding balance amortized and paid over the following 3 years. Interest accrues on the principal amount at an annual rate equal to the 10-year Treasury bond yield plus 375 basis points, compounded monthly. The rate adjusts on each anniversary date of the note. The payment obligation under the note may be deferred if Contrail’s forecast indicates that any payment following the first 12-month period would cause a loan default or a loan default exists. Initially, the payment obligation would revert back to interest only, unless a default exists, in which case no payment would be required. If Contrail is unable to make a payment for 12 months, then interest shall cease to accrue. The note is expressly subordinated to the payment in full of all indebtedness of Contrail on or prior to the date of the note or thereafter created. The OCAS Loan is classified as related party debt on the Company's condensed consolidated balance sheet. As a result, it is excluded from the tables of current financing arrangements and contractual financing obligations below.

The revolving line of credit at Air T with MBT ("Revolver - MBT") has $4.4 million outstanding as of June 30, 2024 and matures on August 31, 2024. We are currently seeking to refinance the Revolver - MBT prior to its maturity date; however, there is no assurance that we will be able to execute this refinancing or, if we are able to refinance this obligation, that the terms of such refinancing would be as favorable as the terms of our existing credit facility.

The following table provides certain information about the current financing arrangements of the Company and its subsidiaries as of June 30, 2024:

(In Thousands)	June 30, 2024		March 31, 2024		Maturity Date	Interest Rate	Unused commitments at June 30, 2024
Air T Debt
Revolver - MBT	$	4,399	$	—	8/31/2024	SOFR + range of 2.25% - 3.25%	$	14,601
Term Note A - MBT	6,750		6,955		8/31/2031	3.42%
Term Note B - MBT	2,384		2,456		8/31/2031	3.42%
Term Note D - MBT	1,254		1,271		1/1/2028	1-month LIBOR + 2.00%
Term Note F - MBT	733		783		1/31/2028	Greater of 6.00% or Prime + 1.00%
Debt - Trust Preferred Securities	34,260		34,214		6/7/2049	8.00%
Total	49,780		45,679
AirCo 1 Debt
Term Loan - PSB	5,434		5,434		12/11/2025	3-month SOFR + 3.26%
Total	5,434		5,434
Jet Yard Debt
Term Loan - MBT	1,723		1,749		8/31/2031	4.14%
Total	1,723		1,749
Contrail Debt
Revolver - ONB	605		3,476		11/24/2025	1-month SOFR + 3.56%	$	24,395
Term Loan G - ONB	14,918		14,918		11/24/2025	1-month SOFR + 3.11%
Term Note I	8,187		10,000		9/28/2025	1-month SOFR + 3.11%
Total	23,710		28,394
Wolfe Lake Debt
Term Loan - Bridgewater	9,263		9,327		12/2/2031	3.65%
Total	9,263		9,327
Air T Acquisition 22.1
Term Loan - Bridgewater	4,000		4,000		2/8/2027	4.00%
Term Loan A - ING	1,766		1,946		2/1/2027	3.50%
Term Loan B - ING	1,071		1,081		5/1/2027	4.00%
Total	6,837		7,027
WASI Debt
Promissory Note - Seller's Note	739		849		1/1/2026	6.00%
Total	739		849
AAM 24-1 Debt
Promissory Notes - Honeywell	15,000		15,000		2/22/2031	8.50%
Total	15,000		15,000
Total Debt	112,486		113,459
Unamortized Premiums and Debt Issuance Costs	(457)		(533)
Total Debt, net	$	112,029	$	112,926

At June 30, 2024, our contractual financing obligations, including payments due by period, are as follows (in thousands):

Due by	Amount
June 30, 2025	$	15,902
June 30, 2026	24,307
June 30, 2027	6,453
June 30, 2028	2,877
June 30, 2029	1,754
Thereafter	61,193
	112,486
Unamortized Premiums and Debt Issuance Costs	(457)
	$	112,029