Equity Method Investments

6 Months Ended

Sep. 30, 2022

Equity Method Investments and Joint Ventures [Abstract]

The Company’s investment in Insignia Systems, Inc. - NASDAQ: ISIG (“Insignia”) is accounted for under the equity method of accounting. The Company has elected a three-month lag upon adoption of the equity method. As of September 30, 2022, the number of Insignia's shares owned by the Company was 0.5 million, representing approximately 27% of the outstanding shares. During the fiscal year ended March 31, 2021, due to loss attributions and impairments taken in prior fiscal years, the Company's net investment basis in Insignia was reduced to $0. As such, the Company did not record as of September 30, 2022 any additional share of Insignia's net loss for the three months ended June 30, 2022. On August 23, 2021, Insignia restated its 10-K for the fiscal year ended December 31, 2020 and its 10-Q for the quarter ended March 31, 2021. The Company evaluated these restatements and determined that they would not result in any additional impact on the Company's condensed consolidated financial statements.

The Company's 20.91% 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 at cost, with a basis difference of $0.3 million. The Company recorded income of $0.4 million and $0.7 million as its share of CCI's net income for the three and six months ended September 30, 2022, along with a basis difference adjustment of $12.0 thousand and $25.0 thousand, respectively. The Company's net investment basis in CCI is $3.4 million as of September 30, 2022. The Company also executed a $2.0 million promissory note payable to CCI on September 30, 2022. See Note 12.

Summarized unaudited financial information for the Company's equity method investees for the three and six months ended June 30, 2022 and 2021 is as follows (in thousands):


	Three Months Ended				Six Months Ended
	June 30, 2022		June 30, 2021		June 30, 2022		June 30, 2021
Revenue	$	38,388	$	27,715	$	73,989	$	57,988
Gross Profit	4,791		1,097		9,166		1,904
Operating income (loss)	1,809		(2,110)		3,790		(5,205)
Net income (loss)	1,055		(2,268)		2,805		(4,413)
Net income (loss) attributable to Air T, Inc. stockholders	$	435	$	(273)	$	743	$	(568)