Company: AIRTP
Filing Date: 2025-08-12
Form Type: 10-K/A
Source: 0000353184-25-000069
Chunk: 100

Company: AIR T INC
Filing Date: 2025-08-12
Form: 10-K/A
Chunk 100
---
ofA") with respect to the $ 2.3million loan made to MAC in February 2025. The purpose of the floating-to-fixed interest rate swap transaction was to effectively fix the loan interest rate at 5.99%. The Company elected not to apply hedge accounting on the interest rate swap with BofA, therefore, any changes in the fair value of the swap are recognized directly into earnings. These fair value changes are included in interest expense on the condensed consolidated statement of income (loss).

When the interest rate swaps were designated as effective hedges, the effective portion of changes in the fair value on these instruments were recorded in other comprehensive income (loss) and reclassified into the consolidated statement of income (loss) as interest expense in the same period in which the underlying hedged transaction affected earnings. The changes in the fair value of the instruments during the fiscal years ended March 31, 2025 and 2024, inclusive of Term Note D - MBT due to its effective hedge designation at the time, were not material. The interest rate swaps are considered Level 2 fair value measurements. The fair value of these interest-rate swap contracts was not material as of March 31, 2025. As of March 31, 2024, the fair value of these interest-rate swap contracts was an asset of $ 1.9million, which is included within other assets in the condensed consolidated balance sheets. Estimated net unrealized losses related to the interest rate swaps included in accumulated other comprehensive income (loss) that will be reclassified into earnings within the next twelve months are not material.

The Company may, from time to time, employ trading strategies designed to profit from market anomalies and opportunities it identifies. Management uses derivative financial instruments to execute those strategies, which may include options, and futures contracts. These derivative instruments are priced using publicly quoted market prices and are considered Level 1 fair value measurements. During the fiscal year ended March 31, 2025, gains and losses related to these derivative instruments were not material. During the fiscal year ended March 31, 2024, the Company recorded a $ 0.2million gain and $ 0.4million loss related to these derivative instruments. These gains and losses are included within Corporate and other's operating expenses in the consolidated statement of income (loss).

<div align='center'>64</div>

The Company also invests in exchange-traded marketable securities and accounts for that activity in accordance with ASC 321, Investments-Equity Securities.