UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1997
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number: 333-24743
AEROCENTURY CORP.
(Exact name of small business issuer as specified in its charter)
CALIFORNIA
(State or other jurisdiction
of incorporation or organization)
94-3263974
(I.R.S. Employer Identification No.)
1440 CHAPIN AVE., SUITE 310
BURLINGAME, CALIFORNIA
(Address of principal executive office)
94010
(Zip Code)
Issuer's telephone number,
including area code: (650) 696-3900
Indicate by check mark whether the issuer: (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to the filing requirements
for the past 90 days. Yes /X/ No
On November 13, 1997, 150,000 shares of common stock were
outstanding.
Transitional Small Business Disclosure Format (check one):
Yes No /X/
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
AEROCENTURY CORP.
(A Development Stage Delaware Corporation)
Balance Sheet
September 30, 1997
(Unaudited)
ASSETS
Cash $ 127,898
Organization costs 453
-----------
Total Assets $ 128,351
===========
LIABILITIES AND SHAREHOLDER'S EQUITY
Liabilities
Accounts payable $ 167,000
Payable to affiliates 50,406
-----------
217,406
Shareholder's Equity:
Common Stock, $.001 par value,
3,000,000 shares authorized, 150,000
shares issued and outstanding 150
Paid in capital in excess of par 149,850
Accumulated deficit (239,055)
-----------
Total shareholder's equity ( 89,055)
-----------
Total Liabilities and
Shareholder's Equity $ 128,351
===========
See accompanying notes.
AeroCentury Corp.
(A Development Stage Delaware Corporation)
Statements of Operations
(Unaudited)
For the Period
from Inception
For the Quarter Ended (February 28, 1997)
September 30, 1997 to September 30, 1997
------------------ --------------------
Revenues -
Interest income $ 642 $ 1,523
Expenses -
Consolidation
offering costs 109,562 240,578
----------- ------------
Net Loss $ (108,920) $ (239,055)
=========== ============
Weighted average
common shares 150,000 150,000
=========== ============
Loss per common share (0.73) (1.59)
=========== ============
See accompanying notes.
AeroCentury Corp.
(A Development Stage Delaware Corporation)
Notes to Financial Statements
September 30, 1997
(Unaudited)
1. Basis of Presentation
AeroCentury Corp. (the "Company") was incorporated in the state
of Delaware on February 28, 1997. All of the Company's
outstanding stock is owned by JetFleet Management Corp. ("JMC"), a
California corporation formed in January 1994. JMC is an
integrated aircraft management, marketing and financing business
and also manages, on behalf of their general partners and
shareholders, respectively, the aircraft assets of JetFleet
Aircraft, L.P. and JetFleet Aircraft II, L.P. (collectively, the
"Partnerships"), and JetFleet III and AeroCentury IV, Inc.,
California corporations which are subsidiaries of JMC.
The accompanying balance sheet at September 30, 1997 and
statements of operations for the quarter ended September 30, 1997
and the period from inception (February 28, 1997) to September 30,
1997 reflect all adjustments (consisting of only normal recurring
accruals) which are, in the opinion of the Company, necessary for
a fair presentation of the financial results. The results of
operations of such period is not necessarily indicative of results
of operations for a full year.
2. Organization and Capitalization
The Company was formed solely for the purpose of acquiring the
Partnerships in a statutory merger (the "Consolidation"). The
Partnerships, formed under California law, invest in leased
aircraft equipment. A Registration Statement on Form S-4 for the
proposed Consolidation became effective on September 23, 1997 and
the proposed Consolidation has been submitted to the limited
partners of the Partnerships for their approval. Upon completion
of the Consolidation, the Company will continue in the aircraft
leasing business and plans to use leveraged financing to acquire
additional aircraft assets on lease.
The Company maintains its cash balance of $127,898 in a
regional bank headquartered in San Francisco. Of this amount,
$27,898 is not federally insured.
Accounts payable and payable to affiliates primarily consist of
offering costs incurred in connection with the proposed
Consolidation.
3. Related Party Transactions
At September 30, 1997 JMC had incurred $50,406 of Consolidation
costs on behalf of the Company.
Upon completion of the Consolidation, the Company's portfolio
of leased aircraft assets will be managed and administered under
the terms of a management agreement with JMC. Under this
agreement, JMC will receive a monthly management fee based on the
net asset value of the assets under management. In addition, JMC
may receive a brokerage fee for locating assets for the Company,
provided that such fee is not more than the customary and usual
brokerage fee that would be paid to an unaffiliated party for such
a transaction, and provided further that the aggregate purchase
price including chargeable acquisition costs and any brokerage fee
shall not exceed the fair market value of the asset based on
appraisal.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Capital Resources and Liquidity
The Company's cash and temporary investments were $127,898 at
September 30, 1997. The Company estimates that costs associated
with the Consolidation will approximate $325,000. Consolidation
costs of $240,578 have been incurred at September 30, 1997 of
which $217,406 is included in liabilties. It is anticipated that
such offering costs in excess of current cash balances will be
financed through short-term payables and paid at the time of the
Consolidation. Should the Consolidation not occur, the Company's
sole shareholder, JetFleet Management Corp., has committed to pay
such costs.
Results of Operations
The Company has yet to generate a profit due to the fact that
the Company is recently formed. For the remainder of 1997, the
Company does not anticipate significant operating activity, other
than incurring merger costs in connection with the proposed
consolidation of JetFleet Aircraft, L. P. and JetFleet Aircraft
II, L.P. with and into the Company (the "Consolidation").
Competition
Upon Consolidation, the Company will compete with aircraft
manufacturers, distributors, airlines and other operators,
equipment managers, leasing companies, equipment leasing programs,
financial institutions and other parties engaged in leasing,
managing or remarketing aircraft, many of which have significantly
greater financial resources and more experience than the Company.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Act of 1934, the Registrant has duly caused this report
to be signed on its behalf by the undersigned, thereunto duly
authorized on November 13, 1997.
AeroCentury Corp.
By: /s/ Neal D. Crispin
--------------------
Neal D. Crispin
Title: President
Pursuant to the requirements of the Securities Act of 1934,
this report has been signed below by the following persons in the
capacities indicated on November 13, 1997.
Signature Title
/S/ Toni M. Perazzo Vice President - Finance
- -------------------
Toni M. Perazzo
/s/ Neal D. Crispin President
- -------------------
Neal D. Crispin
EXHIBIT INDEX
Exhibit No. Description Page No.
- ------------ ------------ ---------
EX-27 Financial Data Schedule
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<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 127,898
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 127,898
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 128,351
<CURRENT-LIABILITIES> 217,406
<BONDS> 0
<COMMON> 150
0
0
<OTHER-SE> (89,205)
<TOTAL-LIABILITY-AND-EQUITY> 128,351
<SALES> 0
<TOTAL-REVENUES> 1,523
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 240,578
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (239,055)
<INCOME-TAX> 0
<INCOME-CONTINUING> (239,055)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (239,055)
<EPS-PRIMARY> (1.59)
<EPS-DILUTED> (1.59)
</TABLE>
