Company: AIRTP
Filing Date: 2025-11-12
Form Type: 10-Q
Source: 0000353184-25-000126
Chunk: 40

Company: AIR T INC
Filing Date: 2025-11-12
Form: 10-Q
Item: Item 8
Chunk 40
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 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. As of September 30, 2025, $1.5 million of the principal balance remains outstanding with minimal accrued interest.CAM's HLBV net assets, including common interests and investor interests, was $33.2 million and $29.9 million as of September 30, 2025 and 2024, respectively. Additionally, contributions from and distributions to both Air T and MRC for the three and six months ended September 30, 2025 and 2024 is as follows (in thousands):Three Months EndedSix Months EndedSeptember 30, 2025September 30, 2024September 30, 2025September 30, 2024Contributions$3,520 $— $7,288 $— Distributions3,887 676 6,402 2,277 Investment balances for the Company's equity method investees as of September 30, 2025 and March 31, 202