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Equity Method Investments
 9 Months Ended
Dec. 31, 2024
Equity Method Investments and Joint Ventures [Abstract]  
Equity Method Investments Equity Method Investments
Lendway, Inc. investment
The Company’s investment in Lendway (NASDAQ: LDWY), formerly Insignia Systems, Inc., 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 December 31, 2024, the Company owned 487,000 Lendway shares, representing approximately 27.5% of Lendway's outstanding shares.
On August 15, 2024, the Company entered into a delayed draw term loan with Lendway for up to $2.5 million with an interest rate of 8.0%. On September 27, 2024 the borrowing limit was increased to $3.5 million and as of December 31, 2024, $3.5 million has been drawn. All outstanding principal and accrued interest will become due and payable to the Company on the maturity date, which is the earlier of August 15, 2029 or by written demand of the Company after February 15, 2026. Prior to the maturity, Lendway may prepay any accrued interest or principal outstanding without penalty.
Cadillac Casting, Inc. investment
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 and $37.0 thousand in each of the three and nine months ended December 31, 2024.
CCI and Lendway's combined summarized unaudited financial information for the three and nine months ended September 30, 2024 and 2023 is as follows (in thousands):
Three Months EndedNine Months Ended
September 30, 2024September 30, 2023September 30, 2024September 30, 2023
Revenue$37,580 $34,365 $135,999 $133,427 
Gross Profit2,051 2,746 15,489 18,076 
Operating (loss) income(2,115)(124)928 9,100 
Net (loss) income(2,383)2,050 (311)10,439 
Crestone Asset Management, LLC investment
On May 5, 2021, the Company formed an aircraft asset management business called Crestone Asset Management, LLC ("CAM"), formerly known as Contrail Asset Management LLC, and an aircraft capital joint venture called Crestone JV II LLC ("CJVII"), formerly known as Contrail JV II LLC. 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.
On October 18, 2024, the Company entered into an unsecured promissory note with CAM for $2.5 million with an interest rate of 10.0%, through conversion of a portion of the Company's accounts receivable from CAM. All outstanding principal and accrued interest will become due and payable to the Company on the maturity date, which is October 15, 2027. Prior to the maturity, CAM may prepay any accrued interest or principal outstanding without penalty.
CAM's HLBV net assets, including common interests and investor interests, was $35.4 million and $21.8 million as of December 31, 2024 and 2023, respectively. Additionally, contributions from and distributions to both Air T and MRC for the three and nine months ended December 31, 2024 and 2023 is as follows (in thousands):
Three Months EndedNine Months Ended
December 31, 2024December 31, 2023December 31, 2024December 31, 2023
Contributions$2,293 $91 $2,293 $548 
Distributions$5,564 $2,112 $7,841 $3,460 
Investment balances for the Company's equity method investees as of December 31, 2024 and March 31, 2024 is as follows (in thousands):
InvestmentDecember 31, 2024March 31, 2024
Lendway$1,534 $2,339 
CCI4,208 3,723 
CAM10,864 7,397 
Other equity method investments2,137 3,194 
Total$18,743 $16,653 
Net income (loss) attributable to Air T, Inc. stockholders for the Company's equity method investees, included in non-operating (expense) income on the condensed consolidated statements of income (loss), including basis difference adjustments, during the three and nine months ended December 31, 2024 and 2023 is as follows (in thousands):
Three Months EndedNine Months Ended
InvestmentDecember 31, 2024December 31, 2023December 31, 2024December 31, 2023
Lendway$(320)$313 $(816)$750 
CCI(267)169 484 1,508 
CAM1,246 563 5,085 1 
Other equity method investments2 (7)177 218 
Total$661 $1,038 $4,930 $2,477 
The Company's equity method investees may, from time to time, make distributions and dividends to the Company in accordance with accumulated earnings at the investee. For the three and nine months ended December 31, 2024 and 2023, the Company received distributions and dividends from equity method investees as follows (in thousands):
Three Months EndedNine Months Ended
InvestmentDecember 31, 2024December 31, 2023December 31, 2024December 31, 2023
Lendway$— $— $— $— 
CCI— — — 452 
CAM1,624 225 3,901 1,421 
Other equity method investments180 45 1,231 214 
Total$1,804 $270 $5,132 $2,087