Company: AIRTP
Filing Date: 2025-11-12
Form Type: 10-Q
Source: 0000353184-25-000126
Chunk: 38

Company: AIR T INC
Filing Date: 2025-11-12
Form: 10-Q
Item: Item 8
Chunk 38
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 promissory notes totaling $4.0 million among three of the largest shareholders, where Air T provided $1.1 million of additional funding (the "Promissory Note"). The notes were issued to Lendway to assist with inventory purchase for the growing season and operating expenses as needed. The promissory note bears interest at a rate of 13.5% with all outstanding principal and accrued interest due on the maturity date, which is June 1, 2027. Prior to the maturity date, Lendway may prepay any accrued interest or principal outstanding without penalty. As of September 30, 2025, $1.1 million of the principal balance remains outstanding and minimal interest has been accrued.Due to the continued subordinated financial support, Lendway is a variable interest entity to which the Company holds several variable interests. The Company has determined that it is not the primary beneficiary, as it does not control Lendway's Board of Directors, which is the party with the power to direct the activities that most significantly impact the economic performance of Lendway. Additionally, the Company's exposure to variability of Lendway is limited to its 27.5% ownership in Lendway's common stock and a total of $3.6 million of notes receivable and accrued interest from Lendway. Accordingly, the Company does not consolidate Lendway and will continue to account for its investment using the equity method of accounting.Cadillac Casting, Inc. investmentThe 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 $25.0 thousand in each of the three and six months ended September 30, 2025.CCI and Lendway's combined summarized unaudited financial information for the three and six months ended June 30, 2025 and 2024 is as follows (in thousands):Three Months EndedSix Months EndedJune 30, 2025June 30, 2024June 30, 2025June 30, 2024Revenue$54,452 $52,662 $96,121 $98,419 Gross Profit7,108 7,434