Company: AIRTP
Filing Date: 2025-02-12
Form Type: 10-Q
Source: 0000353184-25-000009
Chunk: 10

Company: AIR T INC
Filing Date: 2025-02-12
Form: 10-Q
Item: Item 2
Chunk 10
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 the Company’s consolidated financial statements are reasonable and supportable based on the information available as of December 31, 2024.

Liquidity and Capital Resources

As of December 31, 2024, the Company held approximately $18.8 million in cash and cash equivalents and restricted cash. The Company also held $1.2 million in restricted investments held as statutory reserve of SAIC. The Company has an aggregate of approximately $22.8 million in available funds under its lines of credit as of  December 31, 2024.

As of December 31, 2024, the Company’s working capital amounted to $42.8 million, a decrease of $13.3 million compared to March 31, 2024 primarily driven by a $22.2 million decrease in inventory along with a $3.2 million increase in short-term debt, partially offset by an increase in cash and cash equivalents of $11.4 million.

As mentioned in Note 12 of Notes to Condensed Consolidated Financial Statements included under Part I, Item 1 of this Report on Form 10-Q, on May 30, 2024, Contrail, a majority-owned subsidiary of the Company, entered in the Redemption Agreement with 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 through the 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 three 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 

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indebtedness