Company: AIRTP
Filing Date: 2025-08-13
Form Type: 10-Q
Source: 0000353184-25-000073
Chunk: 30

Company: AIR T INC
Filing Date: 2025-08-13
Form: 10-Q
Item: Item 1
Chunk 30
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)— — (95)(50)145 — Operating income (loss)1,466 456 1,338 (250)3,010 (2,709)145 446 Three Months Ended June 30, 2024Overnight Air CargoCommercial Aircraft, Engines and PartsGround Support EquipmentDigital SolutionsReportable Segment TotalCorporate and OtherEliminationsTotalOperating income (loss) from external sources$1,839 $1,095 $(775)$(464)$1,695 $(2,272)$— $(577)Intersegment operating (loss) income(8)(13)— — (21)(74)95 — Operating income (loss)1,831 1,082 (775)(464)1,674 (2,346)95 (577)

17.    Commitments and Contingencies

Put/Call Options and EarnoutContrail entered into an Operating Agreement (the “Contrail Operating Agreement”) in connection with the acquisition of Contrail providing for the governance of and the terms of membership interests in Contrail and including put and call options with the Seller to require Contrail to purchase all of the Seller’s equity membership interests in Contrail, such options commencing on the fifth anniversary of the acquisition, which occurred on July 18, 2021. On May 30, 2024, Contrail entered into a Membership Interest Redemption and Earnout Agreement (the "Redemption Agreement") with the Seller. Pursuant to the Redemption Agreement, Contrail agreed to purchase and redeem from the Seller, 16% of its 21% interest in Contrail, with the earnout period being retroactive to April 1, 2024. The purchase price for the redeemed interest is $4.6 million in the form of a secured, subordinated promissory note, plus an earnout amount valued at $1.1 million. Under the Redemption Agreement, the Seller is entitled to an annual earnout payment equal to 9.14% of Contrail's adjusted EBITDA over $7.0 million in each fiscal year beginning on March 31, 2025 and continuing through 

35

March 31, 2029. Pursuant to the Redemption Agreement, Contrail is required to calculate the earnout payments annually within 30 days following the completion of the annual audits of the Company and Contrail and payment of any amount due is required following satisfaction of a