Welcome to the Air T Annual Shareholder Meeting. At this time, all participants are in a listen-only mode. If you would like to ask a question during this presentation, please click on the Ask Question box on the left side of your screen, type in your question and hit Submit. Please note this conference is being recorded. I will now turn the conference over to your host, Nick Swenson, Air T Chairman and CEO. Please go ahead.
Thank you. Good morning, ladies and gentlemen. I'm Nick Swenson, Chairman of the Board, President, and CEO of your company. This meeting is now called to order, and it's my pleasure to welcome you to the 2026 Annual Meeting of Stockholders. Under our company's bylaws, as chairman of the board, I will preside as chairman of today's meeting. Phil Colton, who is our outside counsel, will act as secretary of the meeting. In addition, Wes Sowers from Deloitte & Touche will be with us on the line today. He's in fact, here in person. Deloitte serves as the company's independent registered public accounting firm, and Mr. Sowers will be available during the Q&A portion of the meeting to respond to any questions you may have. I'd also like to introduce Craig Colosso on the phone today from Equiniti Trust Company, which is the company's stock transfer agent.
Mr. Colosso has been appointed to serve as the voting inspector of this meeting. As voting inspector, he will determine the number of shares of the common stock represented at the meeting and determine if a quorum is present, assist in the tabulation of votes, and perform such duties as provided by the general corporate law of the State of Delaware if any such matter should arise. There are four items of business on the agenda for today's meeting as listed in the notice of annual meeting. As no other matters have been submitted to the company for vote in accordance with the terms of the bylaws of the company, only the items of business set forth in the notice of annual meeting shall be considered at today's meeting.
After the votes have been taken on the matters for which this annual meeting has been called, we will have an opportunity for stockholders to ask general questions or make comments about our company. Consistent with the rules of this meeting, in order to provide for the orderly conduct of this meeting, questions will only be addressed during the appropriate discussion period. The record date for determining the stockholders entitled to vote of and to vote at this meeting is the close of business on June 26, 2026. Will Mr. Colton please present the notice of annual meeting, the proxy statement in the form of a proxy card, and the list of stockholders entitled to vote at today's meeting?
Mr. Chairman, I present the notice of the annual meeting to stockholders to be held on August 25th, 2026, proxy statement of Air T, Inc., in the form of proxy card, which were sent by U.S. Mail or electronically on or about July 10th, 2026 to each stockholder of record of Air T at the close of business on June 26th, 2026, addressed to each stockholder at the address of such stockholder appearing on the books of the company at such time. I also present the list of holders of the shares of common stock and the company of record at the close of business on June 26th, 2026. This list is available upon stockholder request.
This list also shows the address and number of shares of the record owned by each stockholder on the record date, and it has been available at the principal office of the company for more than 10 days prior to the meeting.
At this time, any proxies that have not been submitted should be delivered to Mr. Phil Colton here in the front of the room. If you have already submitted a proxy, it will not be necessary to vote today on any matters to be decided in today's meetings. I now recognize Mr. Colosso for a report on the shares represented at this meeting.
Mr. Chairman, on the record date, the company had outstanding 2,696,509 shares of common stock, of which 2,483,550 shares or 92.1% are represented at the meeting.
Since more than a majority of the outstanding shares of the common stock of the company are represented either in person or by proxy, we have a quorum at this meeting, and I declare this meeting properly organized for the transaction of business. I now declare the polls open. The first item of business of this meeting is the election of members of the board of directors. The number of directors constituting the board of directors has been set at five by the resolution adopted by the board of directors pursuant to the company's bylaws. The board of directors has nominated five individuals for election at this meeting. The list of the board of director nominees, along with the biographical summaries, is included in the company's proxy statement for this meeting. Each of these nominees has agreed to serve as director if elected.
The nominees are myself, Nick Swenson, Raymond Cabillot, William Foudray, Gary Kohler, and Peter McClung. On behalf of the board, each of them is hereby nominated for election as a director. Directors are elected by a plurality. In other words, the five nominees receiving the most votes will be elected as directors. The board of directors recommends that you vote for the election of each of these nominees. The second item of business is the approval of the following resolution, which is presented to the stockholders. Resolve that the stockholders hereby approve on an advisory basis the compensation paid to the company's named executive officers as disclosed pursuant to Item 402 of Regulation S-K of the Securities and Exchange Commission, and the company's proxy statement for the 2026 annual meeting of stockholders. Unquote.
The stockholders vote on this resolution, which we refer to as say-on-pay vote, is advisory and non-binding in the company. The board of directors and the compensation committee expect to take the outcome of the say-on-pay vote into account when considering future executive compensation decisions. The board of directors recommends that you vote for adoption of this resolution. The third and final item of business is the proposed ratification of the appointment of Deloitte & Touche as the independent registered public accounting firm for the company for the fiscal year ending March 31, 2027. Deloitte was first appointed by the audit committee to serve as the company's independent registered public accounting firm on September 27, 2018, and Deloitte has rendered its report with respect to the company's annual financial statements for the fiscal year ended March 31, 2026.
As I'd mentioned earlier, representatives of Deloitte are in the room with us today and are available to respond to any questions you may have. The audit committee has appointed Deloitte as the company's independent registered public accountants for the fiscal year ended March 31, 2027, and the board of directors requests the ratification of that appointment by stockholders. Accordingly, the ratification of the appointment of Deloitte as the company's independent registered public accountants for the fiscal year ended March 31, 2027, is now presented for a vote at this meeting. This matter will be approved if more shares are voted in favor of ratification of the appointment of Deloitte than are cast against ratification. As set forth in the proxy statement, the board of directors recommends that you vote for the ratification of the appointment of Deloitte. I now declare the polls closed.
I will now ask the voting inspector to report the outcome of each of the votes at today's meeting.
Mr. Chairman, the ballots have been counted, and the five nominees for director have received the plurality of the votes cast at the meeting in person or by proxy. The number of votes that have been cast at the meeting in person or by proxy in favor of the advisory resolution approving the compensation paid to the company's named executive officers represent a majority of the shares entitled to vote. The number of votes that have been cast in favor of the ratification and appointment of Deloitte as the company's independent registered public accounting firm for the fiscal year ending March 31, 2027, represent a majority of the shares entitled to vote.
Thank you, Mr. Colosso. All items of business have been approved. A complete tally of votes will be reported in the company's Form 8-K to be filed with the SEC within the next four business days. With all official business completed, I adjourn the business portion of the meeting. I will now turn to Q&A from shareholders. We've been collecting questions on our website via Slido throughout the year and answering those questions in our investor presentations at quarter end. We will begin by answering questions received by Slido and then open the phone line for direct questions from shareholders at this meeting. As a reminder, you are able to submit additional questions via our website at this time under the Ask a Question box on the left side of your screen. We will try to answer as many of these questions as possible, time permitting. Right.
We received roughly three questions by Slido, and as I said, we can address additional questions if you want to submit them by our website or directly on the conference call here. The first question was, "Can you tell a bit more about supply chain issues facing Rex Regional Airlines?" Yeah, that's the first question. As we've disclosed, there are two primary restraints, constraints on the supply chain with Rex, and that is the supply of engine parts and then the capacity for MROs to overhaul and produce good engines for Rex. I would say that it's our opinion that at this time, we have mostly relieved the parts supply issue in the supply chain. That could change at any moment, but at this moment, we believe that the parts supply issue isn't the primary issue in the supply chain.
Rather now it's the MRO throughput and the production of good engines by MROs. The type of engine that Rex uses is overhauled by a limited number of shops in the world, and part of the problem is just the priority at those shops, and we think, at this time, that's the primary reason that we have been slow to produce good engines. The second question related to that one, "It seems like we are still flying only 30 Saab 340 planes against a goal of flying 40." Yes, we have a goal as part of our Rex Regional commitments with the Australian Commonwealth to fly or endeavor to fly 40+ Saab 340s by December of 2027. We're not behind since we haven't reached the final date of our goal assessment.
We are at 30 aircraft on the line and flying as of now, and that puts us slightly behind the Rex Regional commitments, which are, again, a commitment to endeavor to fly aircraft. Of course, we have every motivation to continue to improve and expand the number of planes that Rex is flying. Second question, "In your airline leasing and asset management segment, is the trend of investing in airline assets increasing? If so, why?" I'll answer that question in a couple of different ways. If the question is intended to ask if we're going to be investing or adding to the number of airlines that we own, that is looking for more regional airlines to buy it, I think the answer to that question is no, we don't have any intention at this time to be expanding our footprint in airline operations.
We have no intent at this point to do that. We are expanding our asset management or airline or aircraft asset management, pardon me, aircraft asset management business, of course, through Crestone and Contrail. That business has been well-supported by our capital partners, and we do see that business, at this point, you can see historically as having grown up to this time. The final question we received earlier is that Contrail debt has increased to $13.7 million from $6.2 million in the latest Q4 2027 presentation. What is behind this increase? The increase is caused by two things. One is a new teardown package was acquired in May of 2026, and also the redemption of the non-controlling interest following the retirement of our minority owner. Those were the two drivers that would have increased the debt, primary drivers for increase in Contrail's debt.
As long-term people who follow our financials will observe, there has been a movement around Contrail's debt, goes up and down depending on the inventory levels that it holds. Doesn't look like we have any further Slido questions submitted via the website, so I'll ask the operator if there are any other questions or people in the queue to ask questions directly on the phone this morning.
Ladies and gentlemen, the floor is now open for questions. If you have any questions or comments, please press star one on your phone at this time. Please hold while we poll for questions. There are no questions from the phone lines.
All right. Very good. Thank you for attending the meeting this morning, and have a great day.
This concludes today's conference, and you may disconnect at this time. Thank you for your participation.