| | | Page | | |||
| | | | 1 | | | |
| | | | 5 | | | |
| | | | 13 | | | |
| | | | 18 | | | |
| | | | 20 | | | |
| | | | 24 | | | |
| | | | 26 | | | |
| | | | 32 | | | |
| | | | 54 | | | |
| | | | 66 | | | |
| | | | 68 | | | |
| | | | 71 | | | |
| | | | 73 | | | |
| | | | 74 | | | |
| | | | 75 | | | |
| | | | 76 | | | |
| | | | 77 | | | |
| | | | F-1 | | | |
| | | | A-1 | | | |
| | | | B-1 | | |
| AeroCentury Corp. 1440 Chapin Avenue, Suite 310 Burlingame, California 94010 | | | JetFleet Holding Corp. 1440 Chapin Avenue, Suite 310 Burlingame, California 94010 | |
| Falcon Landing, Inc. 1440 Chapin Avenue, Suite 310 Burlingame, California 94010 | | | Fortis Advisors LLC* 12526 High Bluff Drive, #280 San Diego, California 92130 | |
| | | Fiscal Years ended December 31 (dollars in thousands) | | |||||||||||||||||||||||||||
($ in thousands) | | | 2018 | | | 2019 | | | 2020 | | | 2021 | | | 2022 | | |||||||||||||||
Total Revenue | | | | $ | 33,438 | | | | | $ | 36,115 | | | | | $ | 37,860 | | | | | $ | 37,106 | | | | | $ | 38,691 | | |
EBITDA(1) | | | | $ | 24,837 | | | | | $ | 27,368 | | | | | $ | 28,805 | | | | | $ | 27,829 | | | | | $ | 29,143 | | |
Net Income | | | | $ | 1,516 | | | | | $ | 2,941 | | | | | $ | 3,542 | | | | | $ | 3,727 | | | | | $ | 4,438 | | |
Levered Free Cash Flow(2) | | | | $ | (752) | | | | | $ | 472 | | | | | $ | 435 | | | | | $ | 303 | | | | | $ | 57 | | |
| | | Fiscal Years ended December 31 (dollars in thousands) | | |||||||||||||||||||||||||||||||||||||||||||||
($ in thousands) | | | 2018 | | | 2019 | | | 2020 | | | 2021 | | | 2022 | | | 2023 | | | 2024 | | | 2025 | | ||||||||||||||||||||||||
Total Revenue | | | | $ | 7,288 | | | | | $ | 7,553 | | | | | $ | 7,992 | | | | | $ | 8,433 | | | | | $ | 8,419 | | | | | $ | 8,672 | | | | | $ | 8,932 | | | | | $ | 6,517 | | |
EBITDA(1) | | | | $ | 1,975 | | | | | $ | 2,036 | | | | | $ | 2,261 | | | | | $ | 2,464 | | | | | $ | 2,202 | | | | | $ | 2,207 | | | | | $ | 2,208 | | | | | $ | 1,562 | | |
Net Income | | | | $ | 1,182 | | | | | $ | 1,218 | | | | | $ | 1,353 | | | | | $ | 1,473 | | | | | $ | 1,316 | | | | | $ | 1,318 | | | | | $ | 1,318 | | | | | $ | 932 | | |
Free Cash Flow(2) | | | | $ | 1,177 | | | | | $ | 1,214 | | | | | $ | 1,349 | | | | | $ | 1,470 | | | | | $ | 1,313 | | | | | $ | 1,316 | | | | | $ | 1,316 | | | | | $ | 931 | | |
| | | ACY Historical & Projected Financial Performance | | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| | | ($ in thousands) | | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| | | For the Years Ended December 31 | | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| | | Actual | | | Estimate | | | ACY Projections | | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| | | 2013 | | | 2014 | | | 2015 | | | 2016 | | | LTM | | | 2017 | | | 2018 | | | 2019 | | | 2020 | | | 2021 | | | 2022 | | |||||||||||||||||||||||||||||||||
Operating Leases | | | | $ | 18,794 | | | | | $ | 21,913 | | | | | $ | 25,467 | | | | | $ | 24,464 | | | | | $ | 29,551 | | | | | $ | 29,081 | | | | | $ | 30,267 | | | | | $ | 34,660 | | | | | $ | 36,818 | | | | | $ | 36,470 | | | | | $ | 38,539 | | |
Op. Leases as a % of Average NBV | | | | | 12.7% | | | | | | 12.9% | | | | | | 14.9% | | | | | | 14.1% | | | | | | 15.2% | | | | | | 15.2% | | | | | | 15.2% | | | | | | 15.8% | | | | | | 15.8% | | | | | | 15.0% | | | | | | 15.0% | | |
Maintenance Reserves(1) | | | | $ | 14,910 | | | | | $ | 3,394 | | | | | $ | 589 | | | | | $ | 0 | | | | | $ | 1,014 | | | | | $ | 3,366 | | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 0 | | | | | $ | 0 | | |
Net Gain in Disposal of Assets | | | | | 3,808 | | | | | | 3,147 | | | | | | 6,791 | | | | | | 2,195 | | | | | | 167 | | | | | | 0 | | | | | | 0 | | | | | | 0 | | | | | | 0 | | | | | | 0 | | | | | | 0 | | |
Net Gain on Sale-Type Finance Leases | | | | | 0 | | | | | | 0 | | | | | | 5,179 | | | | | | 1,187 | | | | | | 1,725 | | | | | | 167 | | | | | | 1,287 | | | | | | 0 | | | | | | 0 | | | | | | 0 | | | | | | 0 | | |
Finance Leases | | | | | 719 | | | | | | 252 | | | | | | 508 | | | | | | 870 | | | | | | 870 | | | | | | 1,597 | | | | | | 1,884 | | | | | | 1,456 | | | | | | 1,042 | | | | | | 637 | | | | | | 152 | | |
Total Revenue | | | | $ | 38,232 | | | | | $ | 28,707 | | | | | $ | 38,534 | | | | | $ | 28,716 | | | | | $ | 33,328 | | | | | $ | 34,211 | | | | | $ | 33,438 | | | | | $ | 36,115 | | | | | $ | 37,860 | | | | | $ | 37,106 | | | | | $ | 38,691 | | |
Growth | | | | | | | | | | | (24.9)% | | | | | | 34.2% | | | | | | (25.5)% | | | | | | NA | | | | | | 19.1% | | | | | | (2.3)% | | | | | | 8.0% | | | | | | 4.8% | | | | | | (2.0)% | | | | | | 4.3% | | |
Total Fees to JHC(2) | | | | $ | (5,746) | | | | | $ | (6,063) | | | | | $ | (6,466) | | | | | $ | (6,888) | | | | | $ | (8,225) | | | | | $ | (6,953) | | | ��� | | $ | (7,288) | | | | | $ | (7,553) | | | | | $ | (7,992) | | | | | $ | (8,433) | | | | | $ | (8,419) | | |
Growth | | | | | NA | | | | | | 5.5% | | | | | | 6.6% | | | | | | 6.5% | | | | | | NA | | | | | | 1.0% | | | | | | 4.8% | | | | | | 3.6% | | | | | | 5.8% | | | | | | 5.5% | | | | | | (0.2)% | | |
Total Operating Expenses | | | | $ | (25,559) | | | | | $ | (45,952) | | | | | $ | (28,512) | | | | | $ | (26,744) | | | | | $ | (30,595) | | | | | $ | (30,119) | | | | | $ | (31,921) | | | | | $ | (33,174) | | | | | $ | (34,317) | | | | | $ | (33,380) | | | | | $ | (34,253) | | |
Growth | | | | | NA | | | | | | 79.8% | | | | | | (38.0)% | | | | | | (6.2)% | | | | | | NA | | | | | | 12.6% | | | | | | 6.0% | | | | | | 3.9% | | | | | | 3.4% | | | | | | (2.7)% | | | | | | 2.6% | | |
Adjusted EBITDA | | | | $ | 24,469 | | | | | $ | 13,924 | | | | | $ | 26,507 | | | | | $ | 18,514 | | | | | $ | 23,582 | | | | | $ | 24,653 | | | | | $ | 24,837 | | | | | $ | 27,368 | | | | | $ | 28,805 | | | | | $ | 27,829 | | | | | $ | 29,143 | | |
Margin | | | | | 64.0% | | | | | | 48.5% | | | | | | 68.8% | | | | | | 64.5% | | | | | | 70.8% | | | | | | 72.1% | | | | | | 74.3% | | | | | | 75.8% | | | | | | 76.1% | | | | | | 75.0% | | | | | | 75.3% | | |
Growth | | | | | NA | | | | | | NM | | | | | | NM | | | | | | (30.2)% | | | | | | NA | | | | | | 33.2% | | | | | | 0.7% | | | | | | 10.2% | | | | | | 5.3% | | | | | | (3.4)% | | | | | | 4.7% | | |
Adjusted Net Income | | | | $ | 8,702 | | | | | $ | 7,443 | | | | | $ | 7,720 | | | | | $ | 3,284 | | | | | $ | 3,629 | | | | | $ | 4,803 | | | | | $ | 1,516 | | | | | $ | 2,941 | | | | | $ | 3,542 | | | | | $ | 3,727 | | | | | $ | 4,438 | | |
Margin | | | | | 22.8% | | | | | | 25.9% | | | | | | 20.0% | | | | | | 11.4% | | | | | | 10.9% | | | | | | 14.0% | | | | | | 4.5% | | | | | | 8.1% | | | | | | 9.4% | | | | | | 10.0% | | | | | | 11.5% | | |
Growth | | | | | NA | | | | | | (14.5)% | | | | | | 3.7% | | | | | | (57.5)% | | | | | | NA | | | | | | 46.2% | | | | | | (68.4)% | | | | | | 94.0% | | | | | | 20.4% | | | | | | 5.2% | | | | | | 19.1% | | |
| | | ACY Discounted Cash Flow Analysis | | ||||||||||||||||||||||||||||||||||||||||||||||
| | | ($ in thousands) | | ||||||||||||||||||||||||||||||||||||||||||||||
| | | For the Years Ended December 31 | | ||||||||||||||||||||||||||||||||||||||||||||||
| | | Estimate | | | | ACY Projections | | | 5-YR CAGR | | | 5-YR Average | | ||||||||||||||||||||||||||||||||||||
| | | 2017E | | | | 2018P | | | 2019P | | | 2020P | | | 2021P | | | 2022P | | ||||||||||||||||||||||||||||||
Revenue | | | | $ | 34,211 | | | | | | $ | 33,438 | | | | | $ | 36,115 | | | | | $ | 37,860 | | | | | $ | 37,106 | | | | | $ | 38,691 | | | | | | 3.7% | | | | | | | | |
Growth | | | | | 19.1% | | | | | | | (2.3)% | | | | | | 8.0% | | | | | | 4.8% | | | | | | (2.0)% | | | | | | 4.3% | | | | | | | | | | | | 2.6% | | |
EBITDA | | | | $ | 23,943 | | | | | | $ | 24,837 | | | | | $ | 27,368 | | | | | $ | 28,805 | | | | | $ | 27,829 | | | | | $ | 29,143 | | | | | | 4.1% | | | | | | | | |
EBITDA Margin | | | | | 70.0% | | | | | | | 74.3% | | | | | | 75.8% | | | | | | 76.1% | | | | | | 75.0% | | | | | | 75.3% | | | | | | | | | | | | 75.3% | | |
| | | 2018P | | | 2019P | | | 2020P | | | 2021P | | | 2022P | | |||||||||||||||
Net Income | | | | $ | 1,516 | | | | | $ | 2,941 | | | | | $ | 3,542 | | | | | $ | 3,727 | | | | | $ | 4,438 | | |
Plus: Depreciation | | | | | 13,907 | | | | | | 15,176 | | | | | | 15,905 | | | | | | 14,889 | | | | | | 15,722 | | |
Plus: Cash Sales Proceeds | | | | | 5,702 | | | | | | 6,955 | | | | | | 22,111 | | | | | | 21,284 | | | | | | 7,578 | | |
Less: Debt Repayments | | | | | (12,801) | | | | | | (24,498) | | | | | | (38,713) | | | | | | (35,500) | | | | | | (25,000) | | |
Plus: Debt Borrowings | | | | | 23,150 | | | | | | 34,050 | | | | | | 34,770 | | | | | | 35,350 | | | | | | 25,160 | | |
Less: Capital Expenditures | | | | | (38,000) | | | | | | (39,000) | | | | | | (42,000) | | | | | | (45,000) | | | | | | (34,000) | | |
Plus: Finance Lease Principal Payments | | | | | 5,278 | | | | | | 7,102 | | | | | | 5,465 | | | | | | 6,214 | | | | | | 6,664 | | |
Plus: Other Cash Flow Adjustments | | | | | 495 | | | | | | (2,254) | | | | | | (645) | | | | | | (661) | | | | | | (505) | | |
Levered Free Cash Flow | | | | $ | (752) | | | | | $ | 472 | | | | | $ | 435 | | | | | $ | 303 | | | | | $ | 57 | | |
Equity Value | | | Low | | | Mid | | | High | | |||||||||
Price to Book Value (“P/BV”) Multiple(1) | | | | | 0.95x | | | | | | 1.00x | | | | | | 1.05x | | |
Cost of Equity | | | | | 15.50% | | | | | | 15.00% | | | | | | 14.50% | | |
Present Value of Terminal Value | | | | $ | 24,543 | | | | | $ | 26,401 | | | | | $ | 28,332 | | |
PV of Discrete Cash Flow – Annual | | | | | 198 | | | | | | 205 | | | | | | 213 | | |
Indicated Equity Value Range | | | | $ | 24,700 | | | | | $ | 26,600 | | | | | $ | 28,500 | | |
|
| | | Implied Multiples | | |||||||||||||||||||||
Book Value of Equity | | | | $ | 41,461 | | | | | | 0.60x | | | | | | 0.64x | | | | | | 0.69x | | |
LTM Net Income | | | | | 3,629 | | | | | | 6.8x | | | | | | 7.3x | | | | | | 7.9x | | |
2017 Net Income | | | | | 4,803 | | | | | | 5.1x | | | | | | 5.5x | | | | | | 5.9x | | |
2018 Net Income | | | | | 1,516 | | | | | | 16.3x | | | | | | 17.5x | | | | | | 18.8x | | |
LTM Revenue(2) | | | | | 33,328 | | | | | | 5.24x | | | | | | 5.29x | | | | | | 5.35x | | |
2017 Revenue(2) | | | | | 34,211 | | | | | | 5.10x | | | | | | 5.16x | | | | | | 5.21x | | |
LTM Adj. EBITDA(2) | | | | | 23,582 | | | | | | 7.4x | | | | | | 7.5x | | | | | | 7.6x | | |
2017 Adj. EBITDA(2) | | | | | 24,653 | | | | | | 7.1x | | | | | | 7.2x | | | | | | 7.2x | | |
| • ALAFCO Aviation Lease and Finance • Avation PLC • DP Aircraft I Limited • AerCap Holdings N.V. | | | • Air Lease Corporation • FLY Leasing Limited • Willis Lease Finance Corporation • Aircastle Limited | |
| | | Selected Public Companies Analysis | | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
COMPANY INFORMATION | | | REVENUE GROWTH | | | LTM RETURNS | | | EBITDA MARGIN | | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Company Name | | | 3-YR CAGR | | | LTM | | | 2017 | | | 2018 | | | ROA | | | ROE | | | EBT to Equity | | | 3-YR AVG | | | LTM | | | 2017 | | | 2018 | | |||||||||||||||||||||||||||||||||
ALAFCO Aviation Lease and Finance | | | | | 6.0% | | | | | | 22.7% | | | | | | NA | | | | | | NA | | | | | | 4.3% | | | | | | 9.0% | | | | | | 9.0% | | | | | | 90.7% | | | | | | 92.8% | | | | | | NA | | | | | | NA | | |
Avation PLC | | | | | 24.7 | | | | | | 32.7 | | | | | | 15.1 | | | | | | 10.7 | | | | | | 7.3 | | | | | | 14.2 | | | | | | 14.2 | | | | | | 93.0 | | | | | | 103.1 | | | | | | NA | | | | | | NA | | |
DP Aircraft I Limited | | | | | NM | | | | | | 0.1 | | | | | | NA | | | | | | NA | | | | | | 6.0 | | | | | | 9.0 | | | | | | 9.0 | | | | | | 92.8 | | | | | | 96.5 | | | | | | NA | | | | | | NA | | |
AerCap Holdings N.V. | | | | | 67.5 | | | | | | -3.8 | | | | | | -2.1 | | | | | | 2.9 | | | | | | 4.4 | | | | | | 11.5 | | | | | | 13.7 | | | | | | 60.9 | | | | | | 81.3 | | | | | | 81.3 | | | | | | 84.6 | | |
Air Lease Corporation | | | | | 16.9 | | | | | | 7.2 | | | | | | 9.5 | | | | | | 15.8 | | | | | | 3.8 | | | | | | 9.7 | | | | | | 15.9 | | | | | | 70.4 | | | | | | 92.3 | | | | | | 92.7 | | | | | | 93.2 | | |
FLY Leasing Limited | | | | | -1.4 | | | | | | -12.9 | | | | | | 0.2 | | | | | | 13.9 | | | | | | 4.3 | | | | | | 6.8 | | | | | | 5.5 | | | | | | 69.1 | | | | | | 86.8 | | | | | | 89.7 | | | | | | 94.6 | | |
Willis Lease Finance Corporation | | | | | 8.7 | | | | | | 16.4 | | | | | | NA | | | | ��� | | NA | | | | | | 4.8 | | | | | | 10.3 | | | | | | 17.6 | | | | | | 65.7 | | | | | | 70.8 | | | | | | NA | | | | | | NA | | |
Aircastle Limited | | | | | 4.7 | | | | | | 9.2 | | | | | | 0.2 | | | | | | 4.7 | | | | | | 6.5 | | | | | | 12.5 | | | | | | 13.0 | | | | | | 67.9 | | | | | | 93.1 | | | | | | 95.6 | | | | | | 91.3 | | |
Mean | | | | | 18.1% | | | | | | 9.0% | | | | | | 4.6% | | | | | | 9.6% | | | | | | 5.2% | | | | | | 10.4% | | | | | | 12.2% | | | | | | 76.3% | | | | | | 89.6% | | | | | | 89.8% | | | | | | 90.9% | | |
Median | | | | | 8.7% | | | | | | 8.2% | | | | | | 0.2% | | | | | | 10.7% | | | | | | 4.6% | | | | | | 10.0% | | | | | | 13.3% | | | | | | 69.7% | | | | | | 92.5% | | | | | | 91.2% | | | | | | 92.2% | | |
High | | | | | 67.5% | | | | | | 32.7% | | | | | | 15.1% | | | | | | 15.8% | | | | | | 7.3% | | | | | | 14.2% | | | | | | 17.6% | | | | | | 93.0% | | | | | | 103.1% | | | | | | 95.6% | | | | | | 94.6% | | |
Low | | | | | -1.4% | | | | | | -12.9% | | | | | | -2.1% | | | | | | 2.9% | | | | | | 3.8% | | | | | | 6.8% | | | | | | 5.5% | | | | | | 60.9% | | | | | | 70.8% | | | | | | 81.3% | | | | | | 84.6% | | |
ACY(1) | | | | | -9.1% | | | | | | NA | | | | | | 19.1% | | | | | | -2.3% | | | | | | 1.8% | | | | | | 8.7% | | | | | | 6.6% | | | | | | 35.3% | | | | | | 70.8% | | | | | | 72.1% | | | | | | 74.3% | | |
ACY & JHC(1) | | | | | -9.1% | | | | | | NA | | | | | | 19.1% | | | | | | -2.3% | | | | | | 3.3% | | | | | | 15.6% | | | | | | 14.9% | | | | | | NA | | | | | | 81.1% | | | | | | 77.0% | | | | | | 80.3% | | |
|
| | | Selected Public Companies Analysis | | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| | | (US$ in millions, except per share data) | | | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
COMPANY INFORMATION | | | MARKET DATA | | | EQUITY VALUE AS A MULITPLE OF | | | ENTERPRISE VALUE AS A MULITPLE OF | | | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Company Name | | | Common Stock Price on 10/20/2017 | | | % of 52-Week High | | | Market Capitalization | | | Enterprise Value | | | Book Value of Equity | | | Tangible Book Value of Equity | | | LTM Net Income | | | 2017 Net Income | | | 2018 Net Income | | | LTM EBITDA | | | 2017 EBITDA | | | 2018 EBITDA | | | LTM Revenue | | | 2017 Revenue | | | 2018 Revenue | | | |||||||||||||||||||||||||||||||||||||||||||||||
ALAFCO Aviation Lease and Finance | | | | $ | 1.28 | | | | | | 99.2% | | | | | $ | 1,218 | | | | | $ | 2,690 | | | | | | 1.36x | | | | | | 1.36x | | | | | | 15.6x | | | | | | NA | | | | | | NA | | | | | | 10.8x | | | | | | NA | | | | | | NA | | | | | | 10.01x | | | | | | NA | | | | | | NA | | | | ||
Avation PLC | | | | | 3.02 | | | | | | 93.5 | | | | | | 186 | | | | | | 745 | | | | | | 0.92 | | | | | | 0.93 | | | | | | 8.5 | | | | | | 10.9 | | | | | | 10.8x | | | | | | 7.6 | | | | | | NA | | | | | | NA | | | | | | 7.88 | | | | | | 7.60 | | | | | | 6.87 | | | | ||
DP Aircraft I Limited | | | | | 1.11 | | | | | | 98.9 | | | | | | 232 | | | | | | 478 | | | | | | 1.11 | | | | | | 1.36 | | | | | | 12.6 | | | | | | NA | | | | | | NA | | | | | | 8.6 | | | | | | NA | | | | | | NA | | | | | | 8.34 | | | | | | NA | | | | | | NA | | | | ||
AerCap Holdings N.V. | | | | | 53.06 | | | | | | 100.4 | | | | | | 8,671 | | | | | | 34,290 | | | | | | 1.11 | | | | | | 1.55 | | | | | | 9.8 | | | | | | 8.7 | | | | | | 7.9 | | | | | | 8.6 | | | | | | 8.5x | | | | | | 8.0x | | | | | | 6.97 | | | | | | 6.95 | | | | | | 6.75 | | | | ||
Air Lease Corporation | | | | | 44.14 | | | | | | 98.6 | | | | | | 4,556 | | | | | | 13,667 | | | | | | 1.38 | | | | | | 1.38 | | | | | | 15.0 | | | | | | 12.7 | | | | | | 10.6 | | | | | | 10.6 | | | | | | 9.8 | | | | | | 8.4 | | | | | | 9.82 | | | | | | 9.11 | | | | | | 7.87 | | | | ||
FLY Leasing Limited | | | | | 14.03 | | | | | | 95.8 | | | | | | 423 | | | | | | 2,670 | | | | | | 0.78 | | | | | | 0.96 | | | | | | 11.0 | | | | | | 14.7 | | | | | | 7.0 | | | | | | 9.0 | | | | | | 8.7 | | | | | | 7.2 | | | | | | 7.80 | | | | | | 7.77 | | | | | | 6.83 | | | | ||
Willis Lease Finance Corporation | | | | | 25.25 | | | | | | 90.0 | | | | | | 162 | | | | | | 1,047 | | | | | | 0.76 | | | | | | 0.83 | | | | | | 8.0 | | | | | | NA | | | | | | NA | | | | | | 6.0 | | | | | | NA | | | | | | NA | | | | | | 4.22 | | | | | | NA | | | | | | NA | | | | ||
Aircastle Limited | | | | | 23.56 | | | | | | 90.7 | | | | | | 1,854 | | | | | | 5,634 | | | | | | 1.00 | | | | | | 1.00 | | | | | | 8.1 | | | | | | 12.3 | | | | | | 10.1 | | | | | | 7.1 | | | | | | 7.3 | | | | | | 7.3 | | | | | | 6.60 | | | | | | 7.02 | | | | | | 6.70 | | | | ||
Mean | | | | | | | | | | | 95.9% | | | | | $ | 2,163 | | | | | $ | 7,652 | | | | | | 1.05x | | | | | | 1.17x | | | | | | 11.1x | | | | | | 11.9x | | | | | | 9.3x | | | | | | 8.5x | | | | | | 8.6x | | | | | | 7.7x | | | | | | 7.70x | | | | | | 7.69x | | | | | | 7.00x | | | | ||
Median | | | | | | | | | | | 97.2% | | | | | $ | 821 | | | | | $ | 2,680 | | | | | | 1.06x | | | | | | 1.18x | | | | | | 10.4x | | | | | | 12.3x | | | | | | 10.1x | | | | | | 8.6x | | | | | | 8.6x | | | | | | 7.7x | | | | | | 7.84x | | | | | | 7.60x | | | | | | 6.83x | | | | ||
High | | | | | | | | | | | 100.4% | | | | | $ | 8,671 | | | | | $ | 34,290 | | | | | | 1.38x | | | | | | 1.55x | | | | | | 15.6x | | | | | | 14.7x | | | | | | 10.8x | | | | | | 10.8x | | | | | | 9.8x | | | | | | 8.4x | | | | | | 10.01x | | | | | | 9.11x | | | | | | 7.87x | | | | ||
Low | | | | | | | | | | | 90.0% | | | | | $ | 162 | | | | | $ | 478 | | | | | | 0.76x | | | | | | 0.83x | | | | | | 8.0x | | | | | | 8.7x | | | | | | 7.0x | | | | | | 6.0x | | | | | | 7.3x | | | | | | 7.2x | | | | | | 4.22x | | | | | | 6.95x | | | | | | 6.70x | | | | ||
Aerocentury Corp. (1)(2) | | | | $ | 13.55 | | | | | | 84.2% | | | | | $ | 19 | | | | | $ | 162 | | | | | | 0.46x | | | | | | 0.46x | | | | | | 5.3x | | | | | | 4.0x | | | | | | 12.7x | | | | | | 7.2x | | | | | | 6.9x | | | | | | 6.8x | | | | | | 5.07x | | | | | | 4.94x | | | | | | 5.06x | | | | ||
|
| | | Selected M&A Transaction Analysis | | ||||||||||||||||||||||||||||||||||||||||||||||||
| | | ($ in millions) | | ||||||||||||||||||||||||||||||||||||||||||||||||
Announced | | | Target Name | | | Target Business Description | | | Acquirer Name | | | Enterprise Value | | | LTM Revenue | | | LTM EBITDA | | | EBITDA Margin | | | EV/ Revenue | | | EV/ EBITDA | | | Price/ Book Value | | |||||||||||||||||||||
12/11/2016 | | | Deao Import & Export Co., Ltd. | | | Deao Import & Export Co., Ltd. engages in trading of aircraft, engines, and other related parts. | | | Zhuhai Jinyu Investment Consulting Co., Ltd. | | | | $ | 6.5 | | | | | $ | 0.2 | | | | | | NM | | | | | | NA | | | | | | NM | | | | | | NA | | | | | | NA | | |
12/02/2016 | | | CK Capital Limited | | | CK Capital Limited is an investment holding company, which through its subsidiaries, owns and leases aircraft. | | | Accipiter Investments Limited | | | | $ | 973.0 | | | | | | NA | | | | | | NM | | | | | | NA | | | | | | NA | | | | | | NA | | | | | | 0.70x | | |
10/06/2016 | | | C2 Aviation Capital, Inc. | | | C2 Aviation Capital, Inc., an aircraft leasing company, focuses on acquiring, leasing, and managing commercial aircraft in the United States and internationally. | | | Avolon Holdings Limited | | | | $ | 13,355.5 | | | | | $ | 1,234.3 | | | | | $ | 619.4 | | | | | | 50.2% | | | | | | 10.82x | | | | | | 21.6x | | | | | | 1.40x | | |
07/14/2015 | | | Avolon Holdings Limited | | | Avolon Holdings Limited acquires, manages, leases, and sells commercial jet aircraft to various airlines and lessees in the United States and internationally. | | | Global Aviation Leasing Co., Ltd. | | | | $ | 7,504.7 | | | | | $ | 696.6 | | | | | $ | 628.2 | | | | | | 90.2% | | | | | | 10.77x | | | | | | 11.9x | | | | | | 1.70x | | |
9/22/2014 | | | Capital Lease Aviation Plc (nka:Capital Lease Aviation Limited) | | | Capital Lease Aviation Limited owns and leases a portfolio of commercial jet aircrafts to regional and international airlines in Singapore. | | | Avation PLC | | | | $ | 76.4 | | | | | $ | 11.7 | | | | | $ | 10.4 | | | | | | 89.2% | | | | | | 6.53x | | | | | | 7.3x | | | | | | 0.80x | | |
12/16/2013 | | | International Lease Finance Corporation | | | AerCap Global Aviation Trust, together with its subsidiaries, acquires, leases, and sells commercial aircraft worldwide. | | | AerCap Ireland Limited | | | | $ | 26,090.6 | | | | | $ | 4,347.1 | | | | | | NM | | | | | | NA | | | | | | 6.00x | | | | | | NA | | | | | | 0.70x | | |
| | | | | | | | | Mean | | | | $ | 8,001.1 | | | | | $ | 1,258.0 | | | | | $ | 419.4 | | | | | | 76.5% | | | | | | 8.53x | | | | | | 13.6x | | | | | | 1.06x | | |
Source: Capital IQ and company filings | | | Median | | | | $ | 4,238.9 | | | | | $ | 696.6 | | | | | $ | 619.4 | | | | | | 89.2% | | | | | | 8.65x | | | | | | 11.9x | | | | | | 0.80x | | |
| | | ACY Orderly Liquidation(1) | | |||||||||||||||
| | | ($ in thousands) | | |||||||||||||||
| | | Book Value(2) | | | Adjustment(3) | | | Estimated Liquidation Value | | |||||||||
Cash | | | | $ | 8,280 | | | | | | 100.0% | | | | | $ | 8,280 | | |
Accounts Receivable | | | | | 4,664 | | | | | | 100.0% | | | | | | 4,664 | | |
Finance Leases Receivable | | | | | 24,673 | | | | | | 75.0% | | | | | | 18,505 | | |
Aircraft and Aircraft Engines | | | | | 206,096 | | | | | | 106.0% | | | | | | 218,385 | | |
Assets Held for Sale | | | | | 7,429 | | | | | | 80.0% | | | | | | 5,943 | | |
Prepaid Expenses and Other | | | | | 362 | | | | | | 0.0% | | | | | | 0 | | |
Total Assets | | | | $ | 251,504 | | | | | | | | | | | $ | 255,777 | | |
Accounts Payable and Accrued | | | | $ | 713 | | | | | | 100.0% | | | | | $ | 713 | | |
Note Payable | | | | | 158,149 | | | | | | 100.0% | | | | | | 158,149 | | |
Maintenance reserves | | | | | 29,700 | | | | | | 100.0% | | | | | | 29,700 | | |
Accrued Maintenance Costs | | | | | 363 | | | | | | 100.0% | | | | | | 363 | | |
Security Deposits | | | | | 3,968 | | | | | | 100.0% | | | | | | 3,968 | | |
Unearned Revenues | | | | | 3,343 | | | | | | 100.0% | | | | | | 3,343 | | |
Deferred Income Taxes | | | | | 13,481 | | | | | | 100.0% | | | | | | 13,481 | | |
Taxes Payable | | | | | 326 | | | | | | 100.0% | | | | | | 326 | | |
Total Liabilities | | | | $ | 210,042 | | | | | | | | | | | $ | 210,042 | | |
Shareholders’ Equity (Net Asset Value) | | | | | 41,461 | | | | | | | | | | | | 45,734 | | |
Total Liabilities and Shareholders’ Equity | | | | $ | 251,504 | | | | | | | | | | | $ | 255,777 | | |
|
| | | Estimated Liquidation Value | | |||
Net Asset Value | | | | $ | 45,700 | | |
Less: Estimated Fees to the Manager(4) | | | | | (18,300) | | |
Less: Estimated Costs to Liquidate the Assets(5) | | | | | (7,300) | | |
Estimated Liquidation Value | | | | $ | 20,100 | | |
Percentage of Book Value | | | | | 48.5% | | |
| | | Preliminary ACY Valuation Indications | | |||||||||||||||||||||||||||
| | | ($ in thousands, except per share values) | | |||||||||||||||||||||||||||
| | | Current Market Value | | |||||||||||||||||||||||||||
| | | Low | | | Mid | | | High | | | 30-day | | | 10/20/2017 | | |||||||||||||||
Equity Value | | | | | | | | | | | | | | | | | | | | | | | (1 ) | | | | | | (2 ) | | |
Discounted Cash Flow Analysis | | | | $ | 24,700 | | | | | $ | 26,600 | | | | | $ | 28,500 | | | | | | | | | | | | | | |
Estimated Orderly Liquidation Value | | | | | | | | | | | 20,100 | | | | | | | | | | | | | | | | | | | | |
Indicated Equity Value | | | | $ | 24,700 | | | | | $ | 26,600 | | | | | $ | 28,500 | | | | | $ | 20,200 | | | | | $ | 19,200 | | |
Fully Diluted Shares Outstanding(3) | | | | | 1,416,699 | | | | | | 1,416,699 | | | | | | 1,416,699 | | | | | | 1,416,699 | | | | | | 1,416,699 | | |
Resulting Implied Per Share Price | | | | $ | 17.43 | | | | | $ | 18.78 | | | | | $ | 20.12 | | | | | $ | 14.26 | | | | | $ | 13.55 | | |
| | | Implied Multiples | | |||||||||||||||||||||||||||||||||
Book Value of Equity(4) | | | | $ | 41,461 | | | | | | 0.60x | | | | | | 0.64x | | | | | | 0.69x | | | | | | 0.49x | | | | | | 0.46x | | |
LTM Adj. Net Income(4) | | | | | 3,629 | | | | | | 6.8x | | | | | | 7.3x | | | | | | 7.9x | | | | | | 5.6x | | | | | | 5.3x | | |
2017 Est. Net Income(4) | | | | | 4,803 | | | | | | 5.1x | | | | | | 5.5x | | | | | | 5.9x | | | | | | 4.2x | | | | | | 4.0x | | |
2018 Proj. Net Income(4) | | | | | 1,516 | | | | | | 16.3x | | | | | | 17.5x | | | | | | 18.8x | | | | | | 13.3x | | | | | | 12.7x | | |
LTM Revenue(5) | | | | | 33,328 | | | | | | 5.24x | | | | | | 5.29x | | | | | | 5.35x | | | | | | 5.10x | | | | | | 5.07x | | |
2017 Est. Revenue(5) | | | | | 34,211 | | | | | | 5.10x | | | | | | 5.16x | | | | | | 5.21x | | | | | | 4.97x | | | | | | 4.94x | | |
2018 Proj. Revenue(5) | | | | | 33,438 | | | | | | 5.22x | | | | | | 5.28x | | | | | | 5.33x | | | | | | 5.09x | | | | | | 5.06x | | |
LTM Adj. EBITDA(5) | | | | | 23,582 | | | | | | 7.4x | | | | | | 7.5x | | | | | | 7.6x | | | | | | 7.2x | | | | | | 7.2x | | |
2017 Est. Adj. EBITDA(5) | | | | | 24,653 | | | | | | 7.1x | | | | | | 7.2x | | | | | | 7.2x | | | | | | 6.9x | | | | | | 6.9x | | |
2018 Proj. EBITDA(5) | | | | | 24,837 | | | | | | 7.0x | | | | | | 7.1x | | | | | | 7.2x | | | | | | 6.8x | | | | | | 6.8x | | |
| | | Merger Consideration | | |||||||||
| | | ($ in thousands, except per share values) | | |||||||||
| | | 30-day Avg. Trading Value(1) | | | D&P per-Share Value Estimate(2) | | ||||||
Stock Consideration | | | | | | | | | | | | | |
Number of Shares(3) | | | | | 129,286 | | | | | | 129,286 | | |
Price per Share | | | | $ | 14.26 | | | | | $ | 18.78 | | |
Stock Consideration | | | | $ | 1,844 | | | | | $ | 2,427 | | |
Cash Consideration | | | | $ | 3,500 | | | | | $ | 3,500 | | |
Merger Consideration (rounded) | | | | $ | 5,350 | | | | | $ | 5,950 | | |
|
JHC Historical & Projected Financial Performance | JHC Historical & Projected Financial Performance | | JHC Historical & Projected Financial Performance | | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
($ in thousands) | | For the Years Ended December 31 | | | | For the Years Ended December 31 | | | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Actual | | | | | | | Estimate | | Management Projections | | Long-Term Projections | | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| | Actual | | | | | | | Estimate | | Management Projections | | Long-Term Projections | | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| | 2013A | | 2014A | | 2015A | | �� | 2016A | | LTM(1) | | 2017E | | 2018P | | 2019P | | 2020P | | 2021P | | 2022P | | 2023P | | 2024P | | 2025P(2) | | | 2013A | | 2014A | | 2015A | | 2016A | | LTM(1) | | 2017E | | 2018P | | 2019P | | 2020P | | 2021P | | 2022P | | 2023P | | 2024P | | 2025P(2) | | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Management Fees | | | $ | 4,352 | | | | $ | 3,892 | | | | $ | 5,581 | | | | $ | 5,205 | | | | $ | 6,109 | | | | $ | 6,103 | | | | $ | 6,148 | | | | $ | 6,383 | | | | $ | 6,732 | | | | $ | 7,083 | | | | $ | 7,399 | | | | $ | 7,621 | | | | $ | 7,850 | | | | $ | 5,727 | | | | | $ | 4,352 | | | | $ | 3,892 | | | | $ | 5,581 | | | | $ | 5,205 | | | | $ | 6,109 | | | | $ | 6,103 | | | | $ | 6,148 | | | | $ | 6,383 | | | | $ | 6,732 | | | | $ | 7,083 | | | | $ | 7,399 | | | | $ | 7,621 | | | | $ | 7,850 | | | | $ | 5,727 | | | ||||||||||||||||||||||||||||
Growth | | | | NA | | | | | (10.6)% | | | | | 43.4% | | | | | (6.8)% | | | | | NA | | | | | 17.3% | | | | | 0.7% | | | | | 3.8% | | | | | 5.5% | | | | | 5.2% | | | | | 4.5% | | | | | 3.0% | | | | | 3.0% | | | | | 3.0% | | | | | | NA | | | | | (10.6)% | | | | | 43.4% | | | | | (6.8)% | | | | | NA | | | | | 17.3% | | | | | 0.7% | | | | | 3.8% | | | | | 5.5% | | | | | 5.2% | | | | | 4.5% | | | | | 3.0% | | | | | 3.0% | | | | | 3.0% | | | ||||||||||||||||||||||||||||
% of Average NBV | | | | NA | | | | | 2.3% | | | | | 3.3% | | | | | 2.0% | | | | | 2.4% | | | | | 2.3% | | | | | 2.3% | | | | | 2.3% | | | | | 2.4% | | | | | 2.4% | | | | | 2.5% | | | | | 2.5% | | | | | 2.5% | | | | | 2.5% | | | | | | NA | | | | | 2.3% | | | | | 3.3% | | | | | 2.0% | | | | | 2.4% | | | | | 2.3% | | | | | 2.3% | | | | | 2.3% | | | | | 2.4% | | | | | 2.4% | | | | | 2.5% | | | | | 2.5% | | | | | 2.5% | | | | | 2.5% | | | ||||||||||||||||||||||||||||
Acquisition & Other Fees | | | $ | 1,393 | | | | $ | 2,171 | | | | $ | 885 | | | | $ | 1,683 | | | | $ | 2,116 | | | | $ | 851 | | | | $ | 1,140 | | | | $ | 1,170 | | | | $ | 1,260 | | | | $ | 1,350 | | | | $ | 1,020 | | | | $ | 1,051 | | | | $ | 1,082 | | | | $ | 789 | | | | | $ | 1,393 | | | | $ | 2,171 | | | | $ | 885 | | | | $ | 1,683 | | | | $ | 2,116 | | | | $ | 851 | | | | $ | 1,140 | | | | $ | 1,170 | | | | $ | 1,260 | | | | $ | 1,350 | | | | $ | 1,020 | | | | $ | 1,051 | | | | $ | 1,082 | | | | $ | 789 | | | ||||||||||||||||||||||||||||
Growth | | | | NA | | | | | 55.8% | | | | | (59.3)% | | | | | 90.3% | | | | | NA | | | | | (49.5)% | | | | | 34.0% | | | | | 2.6% | | | | | 7.7% | | | | | 7.1% | | | | | (24.4)% | | | | | 3.0% | | | | | 3.0% | | | | | 3.0% | | | | | | NA | | | | | 55.8% | | | | | (59.3)% | | | | | 90.3% | | | | | NA | | | | | (49.5)% | | | | | 34.0% | | | | | 2.6% | | | | | 7.7% | | | | | 7.1% | | | | | (24.4)% | | | | | 3.0% | | | | | 3.0% | | | | | 3.0% | | | ||||||||||||||||||||||||||||
Total Revenue | | | $ | 5,746 | | | | $ | 6,063 | | | | $ | 6,466 | | | | $ | 6,888 | | | | $ | 8,225 | | | | $ | 7,017 | | | | $ | 7,288 | | | | $ | 7,553 | | | | $ | 7,992 | | | | $ | 8,433 | | | | $ | 8,419 | | | | $ | 8,672 | | | | $ | 8,932 | | | | $ | 6,517 | | | | | $ | 5,746 | | | | $ | 6,063 | | | | $ | 6,466 | | | | $ | 6,888 | | | | $ | 8,225 | | | | $ | 7,017 | | | | $ | 7,288 | | | | $ | 7,553 | | | | $ | 7,992 | | | | $ | 8,433 | | | | $ | 8,419 | | | | $ | 8,672 | | | | $ | 8,932 | | | | $ | 6,517 | | | ||||||||||||||||||||||||||||
Growth | | | | NA | | | | | 5.5% | | | | | 6.6% | | | | | 6.5% | | | | | NA | | | | | 1.9% | | | | | 3.9% | | | | | 3.6% | | | | | 5.8% | | | | | 5.5% | | | | | (0.2)% | | | | | 3.0% | | | | | 3.0% | | | | | 3.0% | | | | | | NA | | | | | 5.5% | | | | | 6.6% | | | | | 6.5% | | | | | NA | | | | | 1.9% | | | | | 3.9% | | | | | 3.6% | | | | | 5.8% | | | | | 5.5% | | | | | (0.2)% | | | | | 3.0% | | | | | 3.0% | | | | | 3.0% | | | ||||||||||||||||||||||||||||
Operating Expenses(3) | | | $ | (4,778) | | | | $ | (4,949) | | | | $ | (5,011) | | | | $ | (5,293) | | | | $ | (4,788) | | | | $ | (5,346) | | | | $ | (5,319) | | | | $ | (5,523) | | | | $ | (5,738) | | | | $ | (5,977) | | | | $ | (6,227) | | | | $ | (6,475) | | | | $ | (6,735) | | | | $ | (4,963) | | | | | $ | (4,778) | | | | $ | (4,949) | | | | $ | (5,011) | | | | $ | (5,293) | | | | $ | (4,788) | | | | $ | (5,346) | | | | $ | (5,319) | | | | $ | (5,523) | | | | $ | (5,738) | | | | $ | (5,977) | | | | $ | (6,227) | | | | $ | (6,475) | | | | $ | (6,735) | | | | $ | (4,963) | | | ||||||||||||||||||||||||||||
Margin | | | | 83.2% | | | | | 81.6% | | | | | 77.5% | | | | | 76.8% | | | | | 58.2% | | | | | 76.2% | | | | | 73.0% | | | | | 73.1% | | | | | 71.8% | | | | | 70.9% | | | | | 74.0% | | | | | 74.7% | | | | | 75.4% | | | | | 76.2% | | | | | | 83.2% | | | | | 81.6% | | | | | 77.5% | | | | | 76.8% | | | | | 58.2% | | | | | 76.2% | | | | | 73.0% | | | | | 73.1% | | | | | 71.8% | | | | | 70.9% | | | | | 74.0% | | | | | 74.7% | | | | | 75.4% | | | | | 76.2% | | | ||||||||||||||||||||||||||||
Growth | | | | NA | | | | | 3.6% | | | | | 1.3% | | | | | 5.6% | | | | | NA | | | | | 1.0% | | | | | (0.5)% | | | | | 3.9% | | | | | 3.9% | | | | | 4.2% | | | | | 4.2% | | | | | 4.0% | | | | | 4.0% | | | | | 4.0% | | | | | | NA | | | | | 3.6% | | | | | 1.3% | | | | | 5.6% | | | | | NA | | | | | 1.0% | | | | | (0.5)% | | | | | 3.9% | | | | | 3.9% | | | | | 4.2% | | | | | 4.2% | | | | | 4.0% | | | | | 4.0% | | | | | 4.0% | | | ||||||||||||||||||||||||||||
EBITDA | | | $ | 975 | | | | $ | 1,122 | | | | $ | 1,463 | | | | $ | 1,601 | | | | $ | 3,436 | | | | $ | 1,675 | | | | $ | 1,975 | | | | $ | 2,036 | | | | $ | 2,261 | | | | $ | 2,464 | | | | $ | 2,202 | | | | $ | 2,207 | | | | $ | 2,208 | | | | $ | 1,562 | | | | | $ | 975 | | | | $ | 1,122 | | | | $ | 1,463 | | | | $ | 1,601 | | | | $ | 3,436 | | | | $ | 1,675 | | | | $ | 1,975 | | | | $ | 2,036 | | | | $ | 2,261 | | | | $ | 2,464 | | | | $ | 2,202 | | | | $ | 2,207 | | | | $ | 2,208 | | | | $ | 1,562 | | | ||||||||||||||||||||||||||||
Margin | | | | 17.0% | | | | | 18.5% | | | | | 22.6% | | | | | 23.2% | | | | | 41.8% | | | | | 23.9% | | | | | 27.1% | | | | | 27.0% | | | | | 28.3% | | | | | 29.2% | | | | | 26.2% | | | | | 25.4% | | | | | 24.7% | | | | | 24.0% | | | | | | 17.0% | | | | | 18.5% | | | | | 22.6% | | | | | 23.2% | | | | | 41.8% | | | | | 23.9% | | | | | 27.1% | | | | | 27.0% | | | | | 28.3% | | | | | 29.2% | | | | | 26.2% | | | | | 25.4% | | | | | 24.7% | | | | | 24.0% | | | ||||||||||||||||||||||||||||
Growth | | | | NA | | | | | 15.0% | | | | | 30.4% | | | | | 9.4% | | | | | NA | | | | | 4.7% | | | | | 17.9% | | | | | 3.1% | | | | | 11.1% | | | | | 8.9% | | | | | (10.6)% | | | | | 0.2% | | | | | 0.1% | | | | | (0.1)% | | | | | | NA | | | | | 15.0% | | | | | 30.4% | | | | | 9.4% | | | | | NA | | | | | 4.7% | | | | | 17.9% | | | | | 3.1% | | | | | 11.1% | | | | | 8.9% | | | | | (10.6)% | | | | | 0.2% | | | | | 0.1% | | | | | (0.1)% | | | ||||||||||||||||||||||||||||
Net Income | | | $ | 595 | | | | $ | 667 | | | | $ | 918 | | | | $ | 1,008 | | | | $ | 2,855 | | | | $ | 1,002 | | | | $ | 1,182 | | | | $ | 1,218 | | | | $ | 1,353 | | | | $ | 1,473 | | | | $ | 1,316 | | | | $ | 1,318 | | | | $ | 1,318 | | | | $ | 932 | | | | | $ | 595 | | | | $ | 667 | | | | $ | 918 | | | | $ | 1,008 | | | | $ | 2,855 | | | | $ | 1,002 | | | | $ | 1,182 | | | | $ | 1,218 | | | | $ | 1,353 | | | | $ | 1,473 | | | | $ | 1,316 | | | | $ | 1,318 | | | | $ | 1,318 | | | | $ | 932 | | | ||||||||||||||||||||||||||||
Margin | | | | 10.4% | | | | | 11.0% | | | | | 14.2% | | | | | 14.6% | | | | | 34.7% | | | | | 14.3% | | | | | 16.2% | | | | | 16.1% | | | | | 16.9% | | | | | 17.5% | | | | | 15.6% | | | | | 15.2% | | | | | 14.8% | | | | | 14.3% | | | | | | 10.4% | | | | | 11.0% | | | | | 14.2% | | | | | 14.6% | | | | | 34.7% | | | | | 14.3% | | | | | 16.2% | | | | | 16.1% | | | | | 16.9% | | | | | 17.5% | | | | | 15.6% | | | | | 15.2% | | | | | 14.8% | | | | | 14.3% | | | ||||||||||||||||||||||||||||
Growth | | | | NA | | | | | 12.1% | | | | | 37.6% | | | | | 9.7% | | | | | NA | | | | | (0.5)% | | | | | 17.9% | | | | | 3.1% | | | | | 11.1% | | | | | 8.9% | | | | | (10.7)% | | | | | 0.2% | | | | | 0.0% | | | | | (0.2)% | | | | | | NA | | | | | 12.1% | | | | | 37.6% | | | | | 9.7% | | | | | NA | | | | | (0.5)% | | | | | 17.9% | | | | | 3.1% | | | | | 11.1% | | | | | 8.9% | | | | | (10.7)% | | | | | 0.2% | | | | | 0.0% | | | | | (0.2)% | | |
Discounted Cash Flow Analysis | | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
($ in thousands) | | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| | | Estimate | | | | Management Projections | | | Long-Term Projections | | |||||||||||||||||||||||||||||||||||||||||||||
| | | 2017E | | | | 2018P | | | 2019P | | | 2020P | | | 2021P | | | 2022P | | | 2023P | | | 2024P | | | 2025P(1) | | |||||||||||||||||||||||||||
Total Revenue | | | | $ | 7,017 | | | | | | $ | 7,288 | | | | | $ | 7,553 | | | | | $ | 7,992 | | | | | $ | 8,433 | | | | | $ | 8,419 | | | | | $ | 8,672 | | | | | $ | 8,932 | | | | | $ | 6,517 | | |
Growth | | | | | 1.9% | | | | | | | 3.9% | | | | | | 3.6% | | | | | | 5.8% | | | | | | 5.5% | | | | | | (0.2)% | | | | | | 3.0% | | | | | | 3.0% | | | | | | (27.0)% | | |
EBITDA | | | | | 1,675 | | | | | | | 1,975 | | | | | | 2,036 | | | | | | 2,261 | | | | | | 2,464 | | | | | | 2,202 | | | | | | 2,207 | | | | | | 2,208 | | | | | | 1,562 | | |
EBITDA Margin | | | | | 23.9% | | | | | | | 27.1% | | | | | | 27.0% | | | | | | 28.3% | | | | | | 29.2% | | | | | | 26.2% | | | | | | 25.4% | | | | | | 24.7% | | | | | | 24.0% | | |
| | | | | | 2018P | | | 2019P | | | 2020P | | | 2021P | | | 2022P | | | 2023P | | | 2024P | | | 2025P(1) | | ||||||||||||||||||||||||
Earnings Before Interest and Taxes | | | | | | | $ | 1,969 | | | | | $ | 2,030 | | | | | $ | 2,254 | | | | | $ | 2,456 | | | | | $ | 2,193 | | | | | $ | 2,197 | | | | | $ | 2,197 | | | | | $ | 1,554 | | |
Pro Forma Taxes @ 40.0% | | | | | | | | (788) | | | | | | (812) | | | | | | (902) | | | | | | (982) | | | | | | (877) | | | | | | (879) | | | | | | (879) | | | | | | (621) | | |
Net Operating Profit After Tax | | | | | | | | 1,182 | | | | | | 1,218 | | | | | | 1,353 | | | | | | 1,473 | | | | | | 1,316 | | | | | | 1,318 | | | | | | 1,318 | | | | | | 932 | | |
Depreciation | | | | | | | | 6 | | | | | | 6 | | | | | | 7 | | | | | | 8 | | | | | | 9 | | | | | | 10 | | | | | | 11 | | | | | | 8 | | |
Capital Expenditures | | | | | | | | (10) | | | | | | (10) | | | | | | (11) | | | | | | (12) | | | | | | (12) | | | | | | (12) | | | | | | (13) | | | | | | (9) | | |
(Increase) Decrease in Working Capital | | | | | | | | 0 | | | | | | 0 | | | | | | 0 | | | | | | 0 | | | | | | 0 | | | | | | 0 | | | | | | 0 | | | | | | 0 | | |
Free Cash Flow | | | | | | | $ | 1,177 | | | | | $ | 1,214 | | | | | $ | 1,349 | | | | | $ | 1,470 | | | | | $ | 1,313 | | | | | $ | 1,316 | | | | | $ | 1,316 | | | | | $ | 931 | | |
| | | | No Renewal(2) | | | | 25% Renewal Probability(3) | | | | 50% Renewal Probability(4) | | |||||||||||||||||||||||||||||||||||||||||||||
Equity Value | | | | Low | | | Mid | | | High | | | | Low | | | Mid | | | High | | | | Low | | | Mid | | | High | | |||||||||||||||||||||||||||
Probability of Renewal | | | | | | 0.0% | | | | | | 0.0% | | | | | | 0.0% | | | | | | | 25.0% | | | | | | 25.0% | | | | | | 25.0% | | | | | | | 50.0% | | | | | | 50.0% | | | | | | 50.0% | | |
Terminal Growth Rate | | | | | | NA | | | | | | NA | | | | | | NA | | | | | | | 2.00% | | | | | | 2.00% | | | | | | 2.00% | | | | | | | 2.00% | | | | | | 2.00% | | | | | | 2.00% | | |
Cost of Equity | | | | | | 15.50% | | | | | | 15.00% | | | | | | 14.50% | | | | | | | 15.50% | | | | | | 15.00% | | | | | | 14.50% | | | | | | | 15.50% | | | | | | 15.00% | | | | | | 14.50% | | |
Indicated Equity Value Ranges | | | | | $ | 6,000 | | | | | $ | 6,100 | | | | | $ | 6,200 | | | | | | $ | 7,000 | | | | | $ | 7,150 | | | | | $ | 7,300 | | | | | | $ | 7,850 | | | | | $ | 8,050 | | | | | $ | 8,250 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Implied Multiples | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| LTM Revenue | | | | | 8,225 | | | | | | | 0.73x | | | | | | 0.74x | | | | | | 0.75x | | | | | | | 0.85x | | | | | | 0.87x | | | | | | 0.89x | | | | | | | 0.95x | | | | | | 0.98x | | | | | | 1.00x | | | | | | | | | | | | | ||||||||||||||||||||
| 2017 Revenue | | | | | 7,017 | | | | | | | 0.86x | | | | | | 0.87x | | | | | | 0.88x | | | | | | | 1.00x | | | | | | 1.02x | | | | | | 1.04x | | | | | | | 1.12x | | | | | | 1.15x | | | | | | 1.18x | | | | | | | | | | | | | ||||||||||||||||||||
| 2018 Revenue | | | | | 7,288 | | | | | | | 0.82x | | | | | | 0.84x | | | | | | 0.85x | | | | | | | 0.96x | | | | | | 0.98x | | | | | | 1.00x | | | | | | | 1.08x | | | | | | 1.10x | | | | | | 1.13x | | | | | | | | | | | | | ||||||||||||||||||||
| LTM EBITDA | | | | | 3,436 | | | | | | | 1.7x | | | | | | 1.8x | | | | | | 1.8x | | | | | | | 2.0x | | | | | | 2.1x | | | | | | 2.1x | | | | | | | 2.3x | | | | | | 2.3x | | | | | | 2.4x | | | | | | | | | | | | | ||||||||||||||||||||
| 2017 EBITDA | | | | | 1,675 | | | | | | | 3.6x | | | | | | 3.6x | | | | | | 3.7x | | | | | | | 4.2x | | | | | | 4.3x | | | | | | 4.4x | | | | | | | 4.7x | | | | | | 4.8x | | | | | | 4.9x | | | | | | | | | | | | | ||||||||||||||||||||
| 2018 EBITDA | | | | | 1,975 | | | | | | | 3.0x | | | | | | 3.1x | | | | | | 3.1x | | | | | | | 3.5x | | | | | | 3.6x | | | | | | 3.7x | | | | | | | 4.0x | | | | | | 4.1x | | | | | | 4.2x | | | | | | | | | | | | |
Accretion/Dilution Analysis | | ||||||||||||||||||||||||||||||||||||
($ in thousands, except per share values) | | ||||||||||||||||||||||||||||||||||||
PRE-TRANSACTION | | | 2018(1) | | | 2019 | | | 2020 | | | 2021 | | | 2022 | | | Cumulative | | ||||||||||||||||||
ACY Projected Pre-Tax Income(2) | | | | $ | 1,516 | | | | | $ | 2,941 | | | | | $ | 3,542 | | | | | $ | 3,727 | | | | | $ | 4,438 | | | | | | | | |
Less: Taxes(3) | | | | | (525) | | | | | | (1,018) | | | | | | (1,226) | | | | | | (1,289) | | | | | | (1,536) | | | | | | | | |
ACY Net Income | | | | $ | 992 | | | | | $ | 1,924 | | | | | $ | 2,317 | | | | | $ | 2,437 | | | | | $ | 2,903 | | | | | | | | |
Number of Shares (ACY)(4) | | | | | 1,417 | | | | | | 1,417 | | | | | | 1,417 | | | | | | 1,417 | | | | | | 1,417 | | | | | | | | |
EPS – Standalone | | | | $ | 0.70 | | | | | $ | 1.36 | | | | | $ | 1.64 | | | | | $ | 1.72 | | | | | $ | 2.05 | | | | | $ | 7.46 | | |
POST-TRANSACTION(5) | | | 2018 | | | 2019 | | | 2020 | | | 2021 | | | 2022 | | | ||||||||||||||||||||
ACY Projected Pre-Tax Income(2) | | | | $ | 1,516 | | | | | $ | 2,941 | | | | | $ | 3,542 | | | | | $ | 3,727 | | | | | $ | 4,438 | | | | | | | | |
Add: JHC’s Projected Pre-Tax Income(2) | | | | | 1,969 | | | | | | 2,030 | | | | | | 2,254 | | | | | | 2,456 | | | | | | 2,193 | | | | | | | | |
Combined ACY+JHC Pre-Tax Income | | | | $ | 3,486 | | | | | $ | 4,971 | | | | | $ | 5,796 | | | | | $ | 6,182 | | | | | $ | 6,631 | | | | | | | | |
Less: Taxes(3) | | | | | (1,206) | | | | | | (1,720) | | | | | | (2,006) | | | | | | (2,139) | | | | | | (2,294) | | | | | | | | |
Net Income (Combined) | | | | $ | 2,280 | | | | | $ | 3,251 | | | | | $ | 3,791 | | | | | $ | 4,043 | | | | | $ | 4,337 | | | | | | | | |
Number of Shares (Combined)(5) | | | | | 1,546 | | | | | | 1,546 | | | | | | 1,546 | | | | | | 1,546 | | | | | | 1,546 | | | | | | | | |
EPS – Pro-Forma | | | | $ | 1.47 | | | | | $ | 2.10 | | | | | $ | 2.45 | | | | | $ | 2.62 | | | | | $ | 2.81 | | | | | $ | 11.45 | | |
Cumulative 5-year Accretion/(Dilution) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 53.4% | | |
JHC Valuation Range Conclusions | | ||||||||||||||||||||||||||||||
($ in thousands, except per share values) | | ||||||||||||||||||||||||||||||
| | | D&P Estimate | | | Merger Consideration | | ||||||||||||||||||||||||
| | | 30-day Avg. Trading Value(1) | | | D&P per-Share Value Estimate | | ||||||||||||||||||||||||
| | | Low | | | | | | | | | High | | ||||||||||||||||||
JHC Indicated Equity Value | | | | | | | |||||||||||||||||||||||||
No Renewal of Management Agreement(2) | | | | $ | 6,000 | | | | | | - | | | | | $ | 6,200 | | | | | ||||||||||
25% Renewal Probability(2) | | | | | 7,000 | | | | | | - | | | | | | 7,300 | | | | | ||||||||||
50% Renewal Probability(2) | | | | | 7,850 | | | | | | - | | | | | | 8,250 | | | | | | | | | | | | | | |
Concluded JHC Equity Value Range(3) | | | | $ | 6,000 | | | | | | - | | | | | $ | 8,250 | | | | | $ | 5,350 | | | | | $ | 5,950 | | |
|
| Implied Multiples | | ||||||||||||||||||||||||||||||
| LTM Revenue | | | | $ | 8,225 | | | | | | 0.73x | | | | | | 1.00x | | | | | | 0.65x | | | | | | 0.72x | | |
| 2017 Est. Revenue | | | | | 7,017 | | | | | | 0.86x | | | | | | 1.18x | | | | | | 0.76x | | | | | | 0.85x | | |
| 2018 Proj. Revenue | | | | | 7,288 | | | | | | 0.82x | | | | | | 1.13x | | | | | | 0.73x | | | | | | 0.82x | | |
| LTM EBITDA | | | | | 3,436 | | | | | | 1.7x | | | | | | 2.4x | | | | | | 1.6x | | | | | | 1.7x | | |
| 2017 Est. EBITDA | | | | | 1,675 | | | | | | 3.6x | | | | | | 4.9x | | | | | | 3.2x | | | | | | 3.6x | | |
| 2018 Proj. EBITDA | | | | | 1,975 | | | | | | 3.0x | | | | | | 4.2x | | | | | | 2.7x | | | | | | 3.0x | | |
| Year Ended December 31, 2015 (Unaudited) | | Year Ended December 31, 2016 | | Year Ended December 31, 2017 | | Quarter Ended March 31, 2018 (Unaudited) | | ||||||||||||||||||||||||||||||||||||||||||
| | Year Ended December 31, 2015 (Unaudited) | | Year Ended December 31, 2016 | | Year Ended December 31, 2017 | | Quarter Ended March 31, 2018 (Unaudited) | | |||||||||||||||||||||||||||||||||||||||||
| | (in thousands) | | (in thousands) | | (in thousands) | | (in thousands) | | | (in thousands) | | (in thousands) | | (in thousands) | | (in thousands) | | ||||||||||||||||||||||||||||||||
Total Revenues | | | $ | 6,466 | | | | $ | 6,888 | | | | $ | 7,023 | | | | $ | 1,449,800 | | | | | $ | 6,466 | | | | $ | 6,888 | | | | $ | 7,023 | | | | $ | 1,449,800 | | | ||||||||
Total Expenses | | | $ | 5,011 | | | | $ | 5,296 | | | | $ | 5,327 | | | | $ | 1,140,700 | | | | | $ | 5,011 | | | | $ | 5,296 | | | | $ | 5,327 | | | | $ | 1,140,700 | | | ||||||||
Income Tax Expense | | | $ | 537 | | | | $ | 585 | | | | $ | 481 | | | | $ | 83,000 | | | | | $ | 537 | | | | $ | 585 | | | | $ | 481 | | | | $ | 83,000 | | | ||||||||
Net Income | | | $ | 918 | | | | $ | 1,007 | | | | $ | 1,215 | | | | $ | 226,100 | | | | | $ | 918 | | | | $ | 1,007 | | | | $ | 1,215 | | | | $ | 226,100 | | | ||||||||
Total Assets | | | $ | 5,893 | | | | $ | 6,437 | | | | $ | 8,975 | | | | $ | 8,877,300 | | | | | $ | 5,893 | | | | $ | 6,437 | | | | $ | 8,975 | | | | $ | 8,877,300 | | | ||||||||
Total Liabilities | | | $ | 1,171 | | | | $ | 1,180 | | | | $ | 1,743 | | | | $ | 1,101,900 | | | | | $ | 1,171 | | | | $ | 1,180 | | | | $ | 1,743 | | | | $ | 1,101,900 | | | ||||||||
Shareholders’ Equity | | | $ | 4,722 | | | | $ | 5,257 | | | | $ | 7,232 | | | | $ | 7,775,400 | | | | | $ | 4,722 | | | | $ | 5,257 | | | | $ | 7,232 | | | | $ | 7,775,400 | | |
Name | | | JetFleet Position | | | Biography | |
Toni M. Perazzo | | | Chairman, President, Secretary & Treasurer | | | Chief Financial Officer & Member, Board of Directors of AeroCentury Corp. | |
Christopher J. Hughes | | | Director and Vice President Finance | | | Tax Manager, AeroCentury Corp. | |
Hurdle H. Lee, III | | | Director | | | Co-founder, Chief Financial Officer & Secretary, NuCapital Inc. BV | |
| | | As of March 1, 2018 | | | As of Immediately Following the Closing | | ||||||||||||||||||
Name, Position & Address of Beneficial Owner | | | No. of Shares(1) | | | % of Common Stock(2) | | | No. of Shares(3) | | | % of Common Stock(4) | | ||||||||||||
Michael G. Magnusson, President(5) | | | | | 0 | | | | | | * | | | | | | 0 | | | | | | * | | |
Toni M. Perazzo Director, Sr. Vice President-Finance, Secretary and Principal Stockholder(5)(6)(7) | | | | | 366,554 | | | | | | 25.9% | | | | | | 343,665 | | | | | | 22.2% | | |
Evan M. Wallach Director(5) | | | | | 770 | | | | | | * | | | | | �� | 770 | | | | | | * | | |
Roy E. Hahn Director(5) | | | | | 0 | | | | | | * | | | | | | 0 | | | | | | * | | |
David P. Wilson Director(5) | | | | | 215 | | | | | | * | | | | | | 215 | | | | | | * | | |
All directors and executive officers as a group (5 persons) | | | | | 367,539 | | | | | | 25.9% | | | | | | 344,650 | | | | | | 22.3% | | |
JetFleet Holding Corp. Principal Stockholder(8) | | | | | 214,876 | | | | | | 15.2% | | | | | | 0 | | | | | | * | | |
Dimensional Fund Advisors LP(8) | | | | | 77,485 | | | | | | 5.5% | | | | | | 77,485 | | | | | | 5.01% | | |
| | | Page | | |||
JetFleet Audited Financial Statements | | | | | | | |
| | | | F-2 | | | |
| | | | F-16 | | | |
JetFleet Unaudited Financial Statements | | | | | | | |
| | | | F-30 | | | |
| | | | F-42 | | | |
| | | | F-55 | | | |
| | | | F-57 | | | |
| | | | F-58 | | | |
| | | | F-59 | | |
| ASSETS | | ||||||
| Assets: | | | | | | | |
| Cash and cash equivalents | | | | $ | 4,866,000 | | |
| Marketable securities | | | | | 3,407,600 | | |
| Receivable from affiliates | | | | | 496,600 | | |
| Accounts receivable | | | | | 3,400 | | |
| Taxes receivable | | | | | 24,600 | | |
| Note receivable | | | | | 32,800 | | |
| Prepaid expenses and other assets | | | | | 121,300 | | |
| Equipment (net of accumulated depreciation of $62,200) | | | | | 22,700 | | |
| Total assets | | | | $ | 8,975,000 | | |
| LIABILITIES AND SHAREHOLDERS’ EQUITY | | ||||||
| Liabilities: | | | | | | | |
| Accounts payable and accrued liabilities | | | | $ | 202,300 | | |
| Accrued payroll | | | | | 908,400 | | |
| Income taxes payable | | | | | 600 | | |
| Deferred tax liabilities | | | | | 631,900 | | |
| Total liabilities | | | | | 1,743,200 | | |
| Shareholders’ equity: | | | |||||
| Series A Redeemable Preferred stock, 200,000 shares authorized, no shares issued and outstanding | | | | | — | | |
| Common stock, no par value, 1,000,000 shares authorized, 362,194 issued and outstanding | | | | | 1,261,600 | | |
| Retained earnings | | | | | 4,267,100 | | |
| Accumulated other comprehensive income: | | | |||||
| Foreign currency translation adjustments | | | | | 300 | | |
| Unrealized gain on marketable securities | | | | | 1,702,800 | | |
| Total shareholders’ equity | | | | | 7,231,800 | | |
| Total liabilities and shareholders’ equity | | | | $ | 8,975,000 | | |
|
| Revenues: | | | |||||
| Management fees | | | | $ | 6,109,100 | | |
| Acquisition and remarketing fees | | | | | 901,600 | | |
| Dividends, interest and other income | | | | | 12,700 | | |
| Total revenues | | | | | 7,023,400 | | |
| Costs and expenses: | | | |||||
| Salaries and employee benefits | | | | | 3,459,700 | | |
| Rent | | | | | 423,600 | | |
| Consulting fees | | | | | 524,700 | | |
| Travel, meals and entertainment | | | | | 334,500 | | |
| Interest | | | | | 19,600 | | |
| General and administrative | | | | | 564,600 | | |
| Total costs and expenses | | | | | 5,326,700 | | |
| Income before income taxes | | | | | 1,696,700 | | |
| Income tax expense | | | | | 481,400 | | |
| Net income | | | | $ | 1,215,300 | | |
|
| Net income | | | | $ | 1,215,300 | | |
| Other comprehensive income, net of tax: | | | |||||
| Foreign currency translation adjustments | | | | | 300 | | |
| Unrealized gain on securities | | | | | 759,200 | | |
| Other comprehensive income | | | | | 759,500 | | |
| Comprehensive income | | | | $ | 1,974,800 | | |
|
| | | Common Stock Number of Shares | | | Common Stock Amount | | | Retained Earnings | | | Accumulated Other Comprehensive Income | | | Total | | |||||||||||||||
Balance at December 31, 2016 | | | | | 362,194 | | | | | $ | 1,261,600 | | | | | $ | 3,319,200 | | | | | $ | 676,200 | | | | | $ | 5,257,000 | | |
Net income | | | | | — | | | | | | — | | | | | | 1,215,300 | | | | | | — | | | | | | 1,215,300 | | |
Foreign currency translation adjustments, net of tax expense of $100 | | | | | — | | | | | | — | | | | | | — | | | | | | 300 | | | | | | 300 | | |
Unrealized gain on securities, net of tax expense of $481,300 | | | | | — | | | | | | — | | | | | | — | | | | | | 759,200 | | | | | | 759,200 | | |
Reclassification of stranded tax effects pursuant to ASU 2018-02 | | | | | — | | | | | | — | | | | | | (267,400) | | | | | | 267,400 | | | | | | — | | |
Balance at December 31, 2017 | | | | | 362,194 | | | | | $ | 1,261,600 | | | | | $ | 4,267,100 | | | | | $ | 1,703,100 | | | | | $ | 7,231,800 | | |
|
| Operating activities: | | | | | | | |
| Net income | | | | $ | 1,215,300 | | |
| Adjustments to reconcile net income tonet cash provided by operating activities: | | | |||||
| Depreciation | | | | | 5,300 | | |
| Deferred income taxes | | | | | (243,900) | | |
| Changes in operating assets and liabilities: | | | |||||
| Receivable from affiliates | | | | | 517,100 | | |
| Accounts receivable | | | | | 6,900 | | |
| Taxes receivable | | | | | (24,600) | | |
| Prepaid expenses and other assets | | | | | (17,100) | | |
| Accounts payable and accrued liabilities | | | | | 121,900 | | |
| Accrued payroll | | | | | 310,400 | | |
| Income taxes payable | | | | | (106,300) | | |
| Net cash provided by operating activities | | | | | 1,785,000 | | |
| Investing activities: | | | | | | | |
| Investment in capital assets | | | | | (11,000) | | |
| Repayments on note receivable | | | | | 8,700 | | |
| Net cash used in investing activities | | | | | (2,300) | | |
| Net increase in cash and cash equivalents | | | | | 1,782,700 | | |
| Exchange gains on cash and cash equivalents | | | | | 500 | | |
| Cash and cash equivalents, beginning of period | | | | | 3,082,800 | | |
| Cash and cash equivalents, end of period | | | | $ | 4,866,000 | | |
| Supplemental disclosures of cash flow information: | | | | | | | |
| Cash paid during the year for: | | | |||||
| Income taxes | | | | $ | 790,200 | | |
| Foreign taxes | | | | | 600 | | |
| | | December 31, 2017 | | |||||||||||||||||||||
| | | Total | | | Level 1 | | | Level 2 | | | Level 3 | | ||||||||||||
Marketable securities | | | | $ | 3,407,600 | | | | | $ | 3,274,700 | | | | | $ | 0 | | | | | $ | 132,900 | | |
Money market funds | | | | | 273,000 | | | | | | 273,000 | | | | | | 0 | | | | | | 0 | | |
Total | | | | $ | 3,680,600 | | | | | $ | 3,547,700 | | | | | $ | 0 | | | | | $ | 132,900 | | |
|
Description | | | Total Cost | | | Fair Market Value | | | Gross Unrealized Gain | | |||||||||
Cumulative gross unrealized gains on marketable securities | | | | $ | 1,043,300 | | | | | $ | 3,407,600 | | | | | $ | 2,364,400 | | |
|
Year Ended December 31: | | | Amount | | |||
2018 | | | | $ | 440,300 | | |
2019 | | | | | 442,000 | | |
2020 | | | | | 222,600 | | |
Total | | | | $ | 1,104,900 | | |
|
| Current tax provision: | | | | | | | |
| Federal | | | | $ | 552,400 | | |
| State | | | | | 106,300 | | |
| Foreign | | | | | 66,600 | | |
| Current tax provision | | | | | 725,300 | | |
| Deferred tax provision: | | | |||||
| Federal | | | | $ | 2,300 | | |
| State | | | | | 500 | | |
| Foreign | | | | | 1,300 | | |
| Net legislative change in corporate tax rate | | | | | (246,400) | | |
| Change in valuation allowance | | | | | (1,600) | | |
| Deferred tax provision | | | | | (243,900) | | |
| Total provision for income taxes | | | | $ | 481,400 | | |
|
| Income tax expense at thestatutory federal income tax rate | | | | $ | 576,900 | | |
| State tax expense net of federal benefit | | | | | 66,500 | | |
| Non-deductible expenses | | | | | 19,500 | | |
| Non-taxable income | | | | | (3,200) | | |
| Net legislative change in corporate tax rate | | | | | (246,400) | | |
| Foreign tax on Canadian operations | | | | | 66,000 | | |
| Other tax rate differences | | | | | 3,700 | | |
| Change in valuation allowance | | | | | (1,600) | | |
| Total income tax provision | | | | $ | 481,400 | | |
|
| Gross deferred tax assets: | | | | | | | |
| Franchise taxes | | | | $ | 20,600 | | |
| Deferred compensation | | | | | 15,400 | | |
| Deferred tax assets | | | | | 36,000 | | |
| Valuation allowance | | | | | — | | |
| Net deferred tax asset | | | | | 36,000 | | |
| Gross deferred tax liabilities: | | | |||||
| Unrealized gains on securities | | | | | (661,700) | | |
| Depreciation and impairment | | | | | (6,200) | | |
| Net deferred tax liabilities | | | | $ | (631,900) | | |
|
| | | Before-tax Amount | | | Tax (Expense) | | | Net-of-tax Amount | | |||||||||
Foreign currency translation adjustments | | | | $ | 400 | | | | | $ | (100) | | | | | $ | 300 | | |
Unrealized gains on securities | | | | | 2,364,400 | | | | | | (661,600) | | | | | | 1,702,800 | | |
Total accumulated comprehensive income | | | | $ | 2,364,800 | | | | | $ | (661,700) | | | | | $ | 1,703,100 | | |
|
| ASSETS | | ||||||
| Assets: | | | | | | | |
| Cash and cash equivalents | | | | $ | 3,082,800 | | |
| Marketable securities | | | | | 2,167,100 | | |
| Receivable from affiliates | | | | | 1,013,700 | | |
| Accounts receivable and other receivables | | | | | 10,300 | | |
| Note receivable | | | | | 41,500 | | |
| Prepaid expense and other assets | | | | | 104,200 | | |
| Equipment (net of accumulated depreciation of $56,200) | | | | | 17,100 | | |
| Total assets | | | | $ | 6,436,700 | | |
| LIABILITIES AND SHAREHOLDERS’ EQUITY | | ||||||
| Liabilities: | | | | | | | |
| Accounts payable | | | | $ | 80,400 | | |
| Accrued payroll | | | | | 598,000 | | |
| Taxes payable | | | | | 106,900 | | |
| Deferred tax liabilities | | | | | 394,400 | | |
| Total liabilities | | | | | 1,179,700 | | |
| Shareholders’ equity: | | | | | | | |
| Series A Redeemable Preferred stock, 200,000 shares authorized, no shares issued and outstanding | | | | | — | | |
| Common stock, no par value, 1,000,000 shares authorized, 362,194 issued and outstanding | | | | | 1,261,600 | | |
| Retained earnings | | | | | 3,319,200 | | |
| Accumulated other comprehensive income: | | | | | | | |
| Foreign currency translation adjustments | | | | | 100 | | |
| Unrealized gain on securities | | | | | 676,100 | | |
| Total shareholders’ equity | | | | | 5,257,000 | | |
| Total liabilities and shareholders’ equity | | | | $ | 6,436,700 | | |
|
| Revenues: | | | | | | | |
| Management fees | | | | $ | 5,204,400 | | |
| Acquisition and remarketing fees | | | | | 1,408,700 | | |
| Gain on sale of assets | | | | | 154,200 | | |
| Income from partnership investment | | | | | 107,200 | | |
| Dividends, interest and other income | | | | | 13,000 | | |
| Total revenues | | | | | 6,887,500 | | |
| Costs and expenses: | | | | | | | |
| Salaries and employee benefits | | | | | 2,947,900 | | |
| Rent | | | | | 433,000 | | |
| Consulting fees | | | | | 870,500 | | |
| Travel, meals and entertainment | | | | | 327,700 | | |
| General and administrative | | | | | 716,600 | | |
| Total costs and expenses | | | | | 5,295,700 | | |
| Income before income taxes | | | | | 1,591,800 | | |
| Income tax expense | | | | | 584,800 | | |
| Net income | | | | $ | 1,007,000 | | |
|
| Net income | | | | $ | 1,007,000 | | |
| Other comprehensive income (loss), net of tax: | | | | | | | |
| Foreign currency translation adjustments | | | | | (200) | | |
| Unrealized loss on securities | | | | | (421,700) | | |
| Other comprehensive loss | | | | | (421,900) | | |
| Comprehensive income | | | | $ | 585,100 | | |
|
| | | Number of Shares | | | Common Stock | | | Retained Earnings | | | Accumulated Other Comprehensive Income | | | Total | | |||||||||||||||
Balance at December 31, 2015 | | | | | 362,194 | | | | | $ | 1,261,600 | | | | | $ | 2,312,200 | | | | | $ | 1,098,100 | | | | | $ | 4,671,900 | | |
Net income | | | | | — | | | | | | — | | | | | | 1,007,000 | | | | | | — | | | | | | 1,007,000 | | |
Foreign currency translation adjustments, net of tax benefit of $100 | | | | | — | | | | | | — | | | | | | — | | | | | | (200) | | | | | | (200) | | |
Unrealized loss on securities, net of tax benefit of $279,100 | | | | | — | | | | | | — | | | | | | — | | | | | | (421,700) | | | | | | (421,700) | | |
Balance at December 31, 2016 | | | | | 362,194 | | | | | $ | 1,261,600 | | | | | $ | 3,319,200 | | | | | $ | 676,200 | | | | | $ | 5,257,000 | | |
|
| Operating activities: | | | | | | | |
| Net income | | | | $ | 1,007,000 | | |
| Adjustments to reconcile net income to net cash provided by operating activities: | | | | | | | |
| Gain on sale of assets | | | | | (154,200) | | |
| Depreciation | | | | | 5,900 | | |
| Share of income upon termination of partnership investment | | | | | (107,200) | | |
| Deferred income taxes | | | | | 2,000 | | |
| Changes in operating assets and liabilities: | | | | | | | |
| Receivable from affiliates | | | | | (609,100) | | |
| Accounts receivable and other receivables | | | | | (1,700) | | |
| Taxes receivable | | | | | 82,900 | | |
| Prepaid expenses and other assets | | | | | 2,700 | | |
| Accounts payable | | | | | (27,300) | | |
| Accrued payroll | | | | | 156,400 | | |
| Income taxes payable | | | | | 106,900 | | |
| Net cash provided by operating activities | | | | | 464,300 | | |
| Investing activities: | | | | | | | |
| Proceeds from asset sales | | | | | 211,500 | | |
| Investment in capital assets | | | | | (15,600) | | |
| Repayments on note receivable | | | | | 16,100 | | |
| Distribution upon termination of partnership investment | | | | | 208,600 | | |
| Net cash provided by investing activities | | | | | 420,600 | | |
| Net increase in cash and cash equivalents | | | | | 884,900 | | |
| Cash and cash equivalents, beginning of year | | | | | 2,198,300 | | |
| Exchange losses on cash and cash equivalents | | | | | (400) | | |
| Cash and cash equivalents, end of year | | | | $ | 3,082,800 | | |
| Supplemental disclosures of cash flow information: | | | | | | | |
| Cash paid during the year for: | | | | | | | |
| Income taxes | | | | $ | 391,900 | | |
| Foreign taxes | | | | | 1,300 | | |
| | | December 31, 2016 | | |||||||||||||||||||||
| | | Total | | | Level 1 | | | Level 2 | | | Level 3 | | ||||||||||||
Marketable securities | | | | $ | 2,167,100 | | | | | $ | 2,030,600 | | | | | $ | 0 | | | | | $ | 136,500 | | |
Money market funds | | | | | 272,700 | | | | | | 272,700 | | | | | | 0 | | | | | | 0 | | |
Total | | | | $ | 2,439,800 | | | | | $ | 2,303,300 | | | | | $ | 0 | | | | | $ | 136,500 | | |
|
Description | | | Total Cost | | | Fair Market Value | | | Gross Unrealized Gain | | |||||||||
Cumulative gross unrealized gains on marketable securities | | | | $ | 1,043,300 | | | | | $ | 2,167,100 | | | | | $ | 1,123,800 | | |
|
Year Ended December 31: | | | Amount | | |||
2017 | | | | $ | 437,700 | | |
2018 | | | | | 441,800 | | |
2019 | | | | | 449,100 | | |
2020 | | | | | 230,700 | | |
Total | | | | $ | 1,559,300 | | |
|
| Current tax provision: | | | | | | | |
| Federal | | | | $ | 476,700 | | |
| State | | | | | 104,800 | | |
| Foreign | | | | | 1,300 | | |
| Current tax provision | | | | | 582,800 | | |
|
| Deferred tax provision: | | | | | | | |
| Federal | | | | | 3,000 | | |
| State | | | | | 500 | | |
| Change in valuation allowance | | | | | (1,500) | | |
| Deferred tax provision | | | | | 2,000 | | |
| Total provision for income taxes | | | | $ | 584,800 | | |
|
| Income tax benefit statutory federal income tax rate | | | | $ | 541,200 | | |
| State tax benefit net of federal benefit | | | | | 66,100 | | |
| Meals and entertainment | | | | | 11,400 | | |
| Non-taxable income | | | | | (40,900) | | |
| Tax rate differences | | | | | 8,500 | | |
| Change in valuation allowance | | | | | (1,500) | | |
| Total income tax provision | | | | $ | 584,800 | | |
|
| Gross deferred tax assets: | | | | | | | |
| Net operating loss carry-forwards | | | | $ | 3,000 | | |
| Deferred compensation | | | | | 28,900 | | |
| Franchise taxes and other | | | | | 32,600 | | |
| Deferred tax assets | | | | | 64,500 | | |
| Valuation allowance | | | | | (1,700) | | |
| Net deferred tax asset | | | | | 62,800 | | |
| Gross deferred tax liabilities: | | | | | | | |
| Unrealized gains on securities | | | | | (447,600) | | |
| Depreciation and impairment | | | | | (9,600) | | |
| Net deferred tax liabilities | | | | $ | (394,400) | | |
|
| | | Before-tax Amount | | | Tax (Expense) | | | Net-of-tax Amount | | |||||||||
Foreign currency translation adjustments | | | | $ | 100 | | | | | $ | 0 | | | | | $ | 100 | | |
Unrealized gains on securities | | | | | 1,123,800 | | | | | | (447,700) | | | | | | 676,100 | | |
Total accumulated comprehensive income | | | | $ | 1,123,900 | | | | | $ | (447,700) | | | | | $ | 676,200 | | |
|
| ASSETS | | ||||||
| Assets: | | | |||||
| Cash and cash equivalents | | | | $ | 4,283,600 | | |
| Marketable securities | | | | | 3,848,600 | | |
| Receivable from affiliates | | | | | 479,000 | | |
| Accounts receivable | | | | | 1,100 | | |
| Taxes receivable | | | | | 200 | | |
| Note receivable | | | | | 27,500 | | |
| Prepaid expenses and other assets | | | | | 215,700 | | |
| Equipment (net of accumulated depreciation of $63,100) | | | | | 21,600 | | |
| Total assets | | | | $ | 8,877,300 | | |
| LIABILITIES AND SHAREHOLDERS’ EQUITY | | ||||||
| Liabilities: | | | |||||
| Accounts payable and accrued liabilities | | | | $ | 189,100 | | |
| Accrued payroll | | | | | 99,500 | | |
| Income taxes payable | | | | | 56,000 | | |
| Deferred tax liabilities | | | | | 757,300 | | |
| Total liabilities | | | | | 1,101,900 | | |
| Shareholders’ equity: | | | |||||
| Series A Redeemable Preferred stock, 200,000 shares authorized, no shares issued and outstanding | | | | | — | | |
| Common stock, no par value, 1,000,000 shares authorized, 362,194 issued and outstanding | | | | | 1,261,600 | | |
| Retained earnings | | | | | 4,493,200 | | |
| Accumulated other comprehensive income: | | | |||||
| Foreign currency translation adjustments | | | | | 300 | | |
| Unrealized gain on marketable securities | | | | | 2,020,300 | | |
| Total shareholders’ equity | | | | | 7,775,400 | | |
| Total liabilities and shareholders’ equity | | | | $ | 8,877,300 | | |
|
| Revenues and other income: | | | |||||
| Management fees | | | | $ | 1,446,700 | | |
| Dividends, interest and other income | | | | | 3,100 | | |
| Total revenues and other income | | | | | 1,449,800 | | |
| Costs and expenses: | | | |||||
| Salaries and employee benefits | | | | | 739,800 | | |
| Rent | | | | | 101,700 | | |
| Consulting fees | | | | | 62,000 | | |
| Travel, meals and entertainment | | | | | 95,500 | | |
| General and administrative | | | | | 141,700 | | |
| Total costs and expenses | | | | | 1,140,700 | | |
| Income before income taxes | | | | | 309,100 | | |
| Income tax expense | | | | | 83,000 | | |
| Net income | | | | $ | 226,100 | | |
|
| Net income | | | | $ | 226,100 | | |
| Other comprehensive income, net of tax: | | | |||||
| Unrealized gain on securities | | | | | 317,500 | | |
| Comprehensive income | | | | $ | 543,600 | | |
|
| | | Common Stock Number of Shares | | | Common Stock Amount | | | Retained Earnings | | | Accumulated Other Comprehensive Income | | | Total | | |||||||||||||||
Balance at December 31, 2017 | | | | | 362,194 | | | | | $ | 1,261,600 | | | | | $ | 4,267,100 | | | | | $ | 1,703,100 | | | | | $ | 7,231,800 | | |
Net income | | | | | — | | | | | | — | | | | | | 226,100 | | | | | | — | | | | | | 226,100 | | |
Unrealized gain on securities, net of tax expense of $123,400 | | | | | — | | | | | | — | | | | | | — | | | | | | 317,500 | | | | | | 317,500 | | |
Balance at March 31, 2018 | | | | | 362,194 | | | | | $ | 1,261,600 | | | | | $ | 4,493,200 | | | | | $ | 2,020,600 | | | | | $ | 7,775,400 | | |
|
| Operating activities: | | | |||||
| Net income | | | | $ | 226,100 | | |
| Adjustments to reconcile net income to net cash used in operating activities: | | | |||||
| Depreciation | | | | | 1,100 | | |
| Deferred income taxes | | | | | 2,000 | | |
| Changes in operating assets and liabilities: | | | |||||
| Receivable from affiliates | | | | | 17,600 | | |
| Accounts receivable | | | | | 2,300 | | |
| Taxes receivable | | | | | 24,400 | | |
| Prepaid expenses and other assets | | | | | (94,400) | | |
| Accounts payable and accrued liabilities | | | | | (13,200) | | |
| Accrued payroll | | | | | (808,900) | | |
| Income taxes payable | | | | | 55,400 | | |
| Net cash used in operating activities | | | | | (587,600) | | |
| Investing activities: | | | |||||
| Repayments on note receivable | | | | | 5,300 | | |
| Net cash provided by investing activities | | | | | 5,300 | | |
| Net decrease in cash and cash equivalents | | | | | (582,300) | | |
| Exchange losses on cash and cash equivalents | | | | | (100) | | |
| Cash and cash equivalents, beginning of period | | | | | 4,866,000 | | |
| Cash and cash equivalents, end of period | | | | $ | 4,283,600 | | |
| Supplemental disclosures of cash flow information: | | | |||||
| Cash paid during the period for: | | | |||||
| Income taxes | | | | $ | 900 | | |
| Foreign taxes | | | | | 300 | | |
| | | March 31, 2018 | | |||||||||||||||||||||
| | | Total | | | Level 1 | | | Level 2 | | | Level 3 | | ||||||||||||
Marketable securities | | | | $ | 3,848,600 | | | | | $ | 3,717,400 | | | | | $ | — | | | | | $ | 131,200 | | |
Money market funds | | | | | 273,000 | | | | | | 273,000 | | | | | | — | | | | | | — | | |
Total | | | | $ | 4,121,600 | | | | | $ | 3,990,400 | | | | | $ | — | | | | | $ | 131,200 | | |
|
Description | | | Total Cost | | | Fair Market Value | | | Gross Unrealized Gain | | |||||||||
Cumulative gross unrealized gains on marketable securities | | | | $ | 1,043,300 | | | | | $ | 3,848,600 | | | | | $ | 2,805,300 | | |
|
Year Ended December 31: | | | Amount | | |||
2018 (9 months remaining) | | | | $ | 330,200 | | |
2019 | | | | | 442,000 | | |
2020 | | | | | 222,600 | | |
Total | | | | $ | 994,800 | | |
|
| Current tax provision: | | | |||||
| Federal | | | | $ | 54,400 | | |
| State | | | | | 24,500 | | |
| Foreign | | | | | 2,100 | | |
| Current tax provision | | | | | 81,000 | | |
| Deferred tax provision: | | | |||||
| Federal | | | | $ | 11,200 | | |
| Foreign | | | | | (9,200) | | |
| Deferred tax provision | | | | | 2,000 | | |
| Total provision for income taxes | | | | $ | 83,000 | | |
|
| Income tax expense at the statutory federal income tax rate | | | | $ | 64,900 | | |
| State tax expense net of federal benefit | | | | | 15,800 | | |
| Non-deductible expenses | | | | | 500 | | |
| Non-taxable income | | | | | (400) | | |
| Other tax rate differences | | | | | 2,200 | | |
| Total income tax provision | | | | $ | 83,000 | | |
|
| Deferred tax assets: | | | |||||
| Franchise taxes | | | | $ | 4,800 | | |
| Prepaid income | | | | | 7,400 | | |
| Deferred compensation | | | | | 21,600 | | |
| Deferred tax assets | | | | | 33,800 | | |
| Deferred tax liabilities: | | | |||||
| Unrealized gains on securities | | | | | (785,100) | | |
| Depreciation and impairment | | | | | (6,000) | | |
| Net deferred tax liabilities | | | | $ | (757,300) | | |
|
| | | Before-tax Amount | | | Tax (Expense) | | | Net-of-tax Amount | | |||||||||
Foreign currency translation adjustments | | | | $ | 400 | | | | | $ | (100) | | | | | $ | 300 | | |
Unrealized gains on securities | | | | | 2,805,300 | | | | | | (785,000) | | | | | | 2,020,300 | | |
Total accumulated comprehensive income | | | | $ | 2,805,700 | | | | | $ | (785,100) | | | | | $ | 2,020,600 | | |
|
| ASSETS | | ||||||
| Assets: | | | | | | | |
| Cash and cash equivalents | | | | $ | 2,198,300 | | |
| Marketable securities | | | | | 2,867,900 | | |
| Receivable from affiliates | | | | | 404,600 | | |
| Accounts receivable | | | | | 6,000 | | |
| Taxes receivable | | | | | 85,500 | | |
| Note receivable | | | | | 57,600 | | |
| Other investments | | | | | 101,400 | | |
| Equipment (net of accumulated depreciation of $120,600) | | | | | 108,000 | | |
| Prepaid expenses and other assets | | | | | 63,600 | | |
| Total assets | | | | $ | 5,892,900 | | |
| LIABILITIES AND SHAREHOLDERS’ EQUITY | | ||||||
| Liabilities: | | | | | | | |
| Accounts payable | | | | $ | 107,700 | | |
| Accrued payroll | | | | | 355,300 | | |
| Deferred tax liabilities | | | | | 707,700 | | |
| Total liabilities | | | | | 1,170,700 | | |
| Shareholders’ equity: | | | | | | | |
| Series A Redeemable Preferred stock, 200,000 shares authorized, no shares issued and outstanding | | | | | — | | |
| Common stock, no par value, 1,000,000 shares authorized, 363,791 issued and outstanding | | | | | 1,261,600 | | |
| Retained earnings | | | | | 2,356,400 | | |
| Accumulated other comprehensive income: | | | | | | | |
| Foreign currency translation adjustments | | | | | 6,400 | | |
| Unrealized gain on securities | | | | | 1,097,800 | | |
| Total shareholders’ equity | | | | | 4,722,200 | | |
| Total liabilities and shareholders’ equity | | | | $ | 5,892,900 | | |
|
| Revenues: | | | | | | | |
| Management fees | | | | $ | 5,581,400 | | |
| Acquisition and remarketing fees | | | | | 871,600 | | |
| Dividends, interest and other income | | | | | 13,100 | | |
| Equity in subsidiary | | | | | (100) | | |
| Total revenues | | | | | 6,466,000 | | |
| Costs and expenses: | | | | | | | |
| Salaries and employee benefits | | | | | 2,645,300 | | |
| Rent | | | | | 449,600 | | |
| Consulting fees | | | | | 858,500 | | |
| Travel, meals and entertainment | | | | | 412,400 | | |
| Depreciation | | | | | 6,100 | | |
| Interest | | | | | 1,500 | | |
| General and administrative | | | | | 637,800 | | |
| Total costs and expenses | | | | | 5,011,200 | | |
| Income before income taxes | | | | | 1,454,800 | | |
| Income tax expense | | | | | 537,100 | | |
| Net income | | | | $ | 917,700 | | |
|
| Net income | | | | $ | 917,700 | | |
| Other comprehensive income, net of tax: | | | | | | | |
| Foreign currency translation adjustments | | | | | (1,300) | | |
| Unrealized gain on securities | | | | | 462,000 | | |
| Other comprehensive income | | | | | 460,700 | | |
| Comprehensive income | | | | $ | 1,378,400 | | |
|
| | | Number of Shares | | | Common Stock | | | Preferred Stock | | | Retained Earnings/ (Deficit) | | | Accumulated Other Comprehensive Income | | | Total | | ||||||||||||||||||
Balance at December 31, 2014 | | | | | 363,791 | | | | | $ | 1,261,600 | | | | | $ | — | | | | | $ | 1,438,700 | | | | | $ | 643,500 | | | | | $ | 3,343,800 | | |
Net income for the year | | | | | — | | | | | | — | | | | | | — | | | | | | 917,700 | | | | | | — | | | | | | 917,700 | | |
Foreign currency translation adjustments, net of tax benefit of $700 | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (1,300) | | | | | | (1,300) | | |
Unrealized gain on securities, net of tax expense of $305,900 | | | | | — | | | | | | — | | | | | | — | | | | | | | | | | | | 462,000 | | | | | | 462,000 | | |
Balance at December 31, 2015 | | | | | 363,791 | | | | | $ | 1,261,600 | | | | | $ | — | | | | | $ | 2,356,400 | �� | | | | $ | 1,104,200 | | | | | $ | 4,722,200 | | |
|
| Operating activities: | | | | | | | |
| Net income from operations | | | | $ | 917,700 | | |
| Adjustments to reconcile net income to net cash provided by operating activities: | | | | | | | |
| Depreciation | | | | | 6,100 | | |
| Share of loss of partnership investment | | | | | 100 | | |
| Changes in operating assets and liabilities: | | | | | | | |
| Receivable from affiliates | | | | | 1,089,400 | | |
| Accounts receivable | | | | | (6,000) | | |
| Taxes receivable | | | | | (82,100) | | |
| Prepaid expenses | | | | | (11,100) | | |
| Accounts payable | | | | | 4,800 | | |
| Accrued payroll | | | | | (30,600) | | |
| Income taxes payable | | | | | (186,900) | | |
| Deferred income taxes | | | | | 1,000 | | |
| Net cash provided by operating activities | | | | | 1,702,400 | | |
| Investing activities: | | | | | | | |
| Investment in marketable securities | | | | | (228,400) | | |
| Investment in capital assets | | | | | (13,900) | | |
| Repayments on note receivable | | | | | 15,900 | | |
| Net cash used by investing activities | | | | | (226,400) | | |
| Net increase in cash | | | | | 1,476,000 | | |
| Cash and cash equivalents, beginning of period | | | | | 724,200 | | |
| Exchange losses on cash | | | | | (1,900) | | |
| Cash and cash equivalents, end of period | | | | $ | 2,198,300 | | |
| Supplemental disclosures of cash flow information: | | | | | | | |
| Cash paid during the period for: | | | | | | | |
| Income taxes paid, net of refund of $25,800 | | | | $ | 801,700 | | |
| Foreign taxes | | | | | 3,600 | | |
| Interest expense | | | | | 1,500 | | |
| | | | | | | | | December 31, 2015 | | |||||||||||||||
| | | Total | | | Level 1 | | | Level 2 | | | Level 3 | | ||||||||||||
Marketable securities | | | | $ | 2,867,900 | | | | | $ | 2,728,900 | | | | | $ | 0 | | | | | $ | 139,000 | | |
Limited partnership investment | | | | | 101,400 | | | | | | 0 | | | | | | 0 | | | | | | 101,400 | | |
Money market funds | | | | | 272,600 | | | | | | 272,600 | | | | | | 0 | | | | | | 0 | | |
Total | | | | $ | 3,241,900 | | | | | $ | 3,001,500 | | | | | $ | 0 | | | | | $ | 240.400 | | |
|
| | | Comprehensive Income | | |||
Change in unrealized gains or losses relating to assets still held at reporting date (before income tax) | | | | $ | 767,900 | | |
|
| Total assets | | | | $ | 2,028,000 | | |
| Total liabilities | | | | | 0 | | |
| Net Assets | | | | $ | 2,028,000 | | |
| Revenues | | | | $ | 0 | | |
| Expenses | | | | | 1,075 | | |
| Net loss | | | | $ | (1,075) | | |
| Company’s interest: | | | | | | | |
| Share of net loss | | | | $ | (100) | | |
| Share of net equity | | | | $ | 101,400 | | |
|
Year Ended December 31: | | | Amount | | |||
2016 | | | | $ | 409,400 | | |
2017 | | | | | 415,600 | | |
2018 | | | | | 421,700 | | |
2019 | | | | | 428,100 | | |
2020 | | | | | 217,200 | | |
Total | | | | $ | 1,892,000 | | |
|
| JHC | | | | $ | 0 | | |
| JMC | | | | | 1,842,100 | | |
| EZLease | | | | | (29,600) | | |
| JetFleet Canada | | | | | (345,000) | | |
| JMC USVI | | | | | (25,700) | | |
| Total | | | | $ | 1,441,800 | | |
|
| Current tax provision: | | | | | | | |
| Federal | | | | $ | 467,300 | | |
| State | | | | | 65,000 | | |
| Foreign | | | | | 3,800 | | |
| Current tax provision | | | | | 536,100 | | |
| Deferred tax provision: | | | | | | | |
| Federal | | | | | 2,000 | | |
| State | | | | | 200 | | |
| Change in valuation allowance | | | | | (1,200) | | |
| Deferred tax provision | | | | | 1,000 | | |
| Total provision for income taxes | | | | $ | 537,100 | | |
|
| Income tax benefit statutory federal income tax rate | | | | $ | 494,600 | | |
| State tax benefit net of federal benefit | | | | | 57,500 | | |
| Meals and entertainment | | | | | 13,000 | | |
| Tax rate differences | | | | | (26,800) | | |
| Change in valuation allowance | | | | | (1,200) | | |
| Total income tax provision | | | | $ | 537,100 | | |
|
| Gross deferred tax assets: | | | | | | | |
| Net operating loss carry-forwards | | | | $ | 3,200 | | |
| Franchise taxes and other | | | | | 31,000 | | |
| Deferred tax assets | | | | | 34,200 | | |
| Valuation allowance | | | | | (3,100) | | |
| Net deferred tax asset | | | | | 31,100 | | |
| Gross deferred tax liabilities: | | | | | | | |
| Unrealized gains on securities | | | | | (726,800) | | |
| Depreciation and impairment | | | | | (8,700) | | |
| Other | | | | | (3,300) | | |
| Net deferred tax liabilities | | | | $ | (707,700) | | |
|
| | | Before-tax Amount | | | Tax (Expense) | | | Net-of-tax Amount | | |||||||||
Foreign currency translation adjustments | | | | $ | 9,700 | | | | | $ | (3,300) | | | | | $ | 6,400 | | |
Unrealized gains on securities | | | | | 1,824,600 | | | | | | (726,800) | | | | | | 1,097,800 | | |
Total accumulated comprehensive income | | | | $ | 1,834,300 | | | | | $ | (730,100) | | | | | $ | 1,104,200 | | |
|
| | | AeroCentury historical | | | JetFleet historical | | | Pro forma adjustments | | | Notes | | | Pro forma combined | | ||||||||||||
ASSETS | | |||||||||||||||||||||||||||
Cash and cash equivalents | | | | $ | 4,793,100 | | | | | $ | 4,283,600 | | | | | $ | (6,927,700) | | | | (a) | | | | $ | 2,149,000 | | |
Marketable securities | | | | | — | | | | | | 3,848,600 | | | | | | (3,713,200) | | | | (b) | | | | | 135,400 | | |
Accounts receivable | | | | | 3,159,000 | | | | | | 1,300 | | | | | | — | | | | | | | | | 3,160,300 | | |
Receivable – AeroCentury | | | | | — | | | | | | 479,000 | | | | | | (479,000) | | | | (c) | | | | | — | | |
Finance leases receivable | | | | | 22,893,400 | | | | | | — | | | | | | — | | | | | | | | | 22,893,400 | | |
Note receivable | | | | | — | | | | | | 27,500 | | | | | | — | | | | | | | | | 27,500 | | |
Aircraft, net of accumulated depreciation | | | | | 188,858,000 | | | | | | — | | | | | | — | | | | | | | | | 188,858,000 | | |
Assets held for sale | | | | | 4,821,800 | | | | | | — | | | | | | — | | | | | | | | | 4,821,800 | | |
Equipment, net of depreciation | | | | | — | | | | | | 21,600 | | | | | | — | | | | | | | | | 21,600 | | |
Prepaid expenses and other | | | | | 1,662,600 | | | | | | 215,700 | | | | | | — | | | | | | | | | 1,878,300 | | |
Total assets | | | | $ | 226,187,900 | | | | | $ | 8,877,300 | | | | | $ | (11,119,900) | | | | | | | | $ | 223,945,300 | | |
LIABILITIES AND STOCKHOLDERS’ EQUITY | | |||||||||||||||||||||||||||
Accounts payable and accrued expenses | | | | $ | 341,100 | | | | | $ | 189,100 | | | | | $ | 500,000 | | | | (d) | | | | $ | 1,030,200 | | |
Payable – JetFleet | | | | | 479,000 | | | | | | — | | | | | | (479,000) | | | | (c) | | | | | — | | |
Accrued payroll | | | | | — | | | | | | 99,500 | | | | | | — | | | | | | | | | 99,500 | | |
Notes payable and accrued interest | | | | | 133,768,100 | | | | | | — | | | | | | — | | | | | | | | | 133,768,100 | | |
Security deposits | | | | | 2,968,800 | | | | | | — | | | | | | — | | | | | | | | | 2,968,800 | | |
Unearned revenues | | | | | 4,398,600 | | | | | | — | | | | | | — | | | | | | | | | 4,398,600 | | |
Maintenance reserves | | | | | 27,113,600 | | | | | | — | | | | | | — | | | | | | | | | 27,113,600 | | |
Accrued maintenance costs | | | | | 294,300 | | | | | | — | | | | | | — | | | | | | | | | 294,300 | | |
Deferred income taxes | | | | | 8,583,900 | | | | | | 757,300 | | | | | | (785,000) | | | | (e) | | | | | 8,556,200 | | |
Income taxes payable | | | | | 556,500 | | | | | | 56,000 | | | | | | 785,000 | | | | (e) | | | | | 1,397,500 | | |
Total liabilities | | | | | 178,503,900 | | | | | | 1,101,900 | | | | | | 21,000 | | | | | | | | | 179,626,800 | | |
Stockholders’ equity: | | | | | | | ||||||||||||||||||||||
Common stock | | | | | 1,600 | | | | | | 1,261,600 | | | | | | (1,261,500) | | | | (f) | | | | | 1,700 | | |
Paid-in capital | | | | | 14,780,100 | | | | | | — | | | | | | 2,236,500 | | | | (g) | | | | | 17,016,600 | | |
Retained earnings | | | | | 35,939,100 | | | | | | 4,493,200 | | | | | | (10,095,300) | | | | (h) | | | | | 30,337,000 | | |
Foreign currency translation adjustments | | | | | — | | | | | | 300 | | | | | | (300) | | | | (i) | | | | | — | | |
Unrealized gain on securities | | | | | — | | | | | | 2,020,300 | | | | | | (2,020,300) | | | | (j) | | | | | — | | |
| | | | | 50,720,800 | | | | | | 7,775,400 | | | | | | (11,140,900) | | | | | | | | | 47,355,300 | | |
Treasury stock | | | | | (3,036,800) | | | | | | — | | | | | | — | | | | | | | | | (3,036,800) | | |
Total stockholders’ equity | | | | | 47,684,000 | | | | | | 7,775,400 | | | | | | (11,140,900) | | | | | | | | | 44,318,500 | | |
Total liabilities and stockholders’ equity | | | | $ | 226,187,900 | | | | | $ | 8,877,300 | | | | | $ | (11,119,900) | | | | | | | | $ | 223,945,300 | | |
|
| | | AeroCentury historical | | | JetFleet historical | | | Pro forma adjustments | | | Notes | | | Pro forma combined | | ||||||||||||
Revenues and other income: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Operating lease revenue | | | | $ | 29,002,700 | | | | | $ | — | | | | | $ | — | | | | | | | | $ | 29,002,700 | | |
Maintenance reserves revenue | | | | | 3,886,900 | | | | | | — | | | | | | — | | | | | | | | | 3,886,900 | | |
Finance lease revenue | | | | | 1,571,500 | | | | | | — | | | | | | 60,000 | | | | (k) | | | | | 1,631,500 | | |
Net loss on disposal of assets | | | | | 791,500 | | | | | | — | | | | | | — | | | | | | | | | 791,500 | | |
Net gain on sales-type finance leases | | | | | 297,400 | | | | | | — | | | | | | 51,100 | | | | (k) | | | | | 348,500 | | |
Other income | | | | | 3,800 | | | | | | 12,700 | | | | | | — | | | | | | | | | 16,500 | | |
Management fee income | | | | | | | | | | | 6,109,100 | | | | | | (6,109,100) | | | | (l) | | | | | — | | |
Acquisition and re-sale fee income | | | | | | | | | | | 901,600 | | | | | | (901,600) | | | | (k) | | | | | — | | |
| | | | | 35,553,800 | | | | | | 7,023,400 | | | | | | (6,899,600) | | | | | | | | | 35,677,600 | | |
Expenses: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Management fees | | | | | 6,109,200 | | | | | | — | | | | | | (6,109,200) | | | | (l) | | | | | — | | |
Depreciation | | | | | 12,025,600 | | | | | | — | | | | | | (39,000) | | | | (k) | | | | | 11,986,600 | | |
Provision for impairment | | | | | 1,002,100 | | | | | | — | | | | | | — | | | | | | | | | 1,002,100 | | |
Interest | | | | | 7,753,200 | | | | | | 19,600 | | | | | | — | | | | | | | | | 7,772,800 | | |
Maintenance | | | | | 2,924,300 | | | | | | — | | | | | | — | | | | | | | | | 2,924,300 | | |
Professional fees, general and administrative and other | | | | | 1,945,100 | | | | | | 899,100 | | | | | | (619,400) | | | | (m) | | | | | 2,224,800 | | |
Other taxes | | | | | 90,300 | | | | | | — | | | | | | — | | | | | | | | | 90,300 | | |
Insurance | | | | | 271,300 | | | | | | — | | | | | | — | | | | | | | | | 271,300 | | |
Salaries and employee benefits | | | | | — | | | | | | 3,459,700 | | | | | | — | | | | | | | | | 3,459,700 | | |
Rent | | | | | — | | | | | | 423,600 | | | | | | — | | | | | | | | | 423,600 | | |
Consulting fees | | | | | — | | | | | | 524,700 | | | | | | — | | | | | | | | | 524,700 | | |
| | | | | 32,121,100 | | | | | | 5,326,700 | | | | | | (6,767,600) | | | | | | | | | 30,680,200 | | |
Income before income tax provision | | | | | 3,432,700 | | | | | | 1,696,700 | | | | | | (132,000) | | | | | | | | | 4,997,400 | | |
Income tax provision | | | | | (3,966,500) | | | | | | 481,400 | | | | | | (262,900) | | | | (n) | | | | | (3,748,000) | | |
Net income | | | | $ | 7,399,200 | | | | | $ | 1,215,300 | | | | | $ | 130,900 | | | | | | | | $ | 8,745,400 | | |
Earnings per share | | | | | 5.10 | | | | | | | | | | | | | | | | | | | | | 5.54 | | |
Weighted average shares outstanding | | | | | 1,449,576 | | | | | | | | | | | | 129,286 | | | | (o) | | | | | 1,578,862 | | |
|
| | | AeroCetury historical | | | JetFleet historical | | | Pro forma adjustments | | | Notes | | | Pro forma combined | | ||||||||||||
Revenues and other income: | | | | | | | ||||||||||||||||||||||
Operating lease revenue | | | | $ | 6,462,900 | | | | | $ | — | | | | | $ | — | | | | | | | | $ | 6,462,900 | | |
Maintenance reserves revenue | | | | | — | | | | | | — | | | | | | — | | | | | | | | | — | | |
Finance lease revenue | | | | | 379,000 | | | | | | — | | | | | | 18,000 | | | | (k) | | | | | 397,000 | | |
Net loss on disposal of assets | | | | | (8,200) | | | | | | — | | | | | | — | | | | | | | | | (8,200) | | |
Net gain on sales-type finance leases | | | | | — | | | | | | — | | | | | | — | | | | (k) | | | | | — | | |
Other income | | | | | 1,051,400 | | | | | | 3,100 | | | | | | — | | | | | | | | | 1,054,500 | | |
Management fee income | | | | | — | | | | | | 1,446,700 | | | | | | (1,446,700) | | | | (l) | | | | | — | | |
Acquisition and re-sale fee income | | | | | — | | | | | | — | | | | | | — | | | | (k) | | | | | — | | |
| | | | | 7,885,100 | | | | | | 1,449,800 | | | | | | (1,428,700) | | | | | | | | | 7,906,200 | | |
Expenses: | | | | | | | ||||||||||||||||||||||
Management fees | | | | | 1,446,800 | | | | | | — | | | | | | (1,446,800) | | | | (l) | | | | | — | | |
Depreciation | | | | | 2,941,900 | | | | | | — | | | | | | (20,000) | | | | (k) | | | | | 2,921,900 | | |
Provision for impairment | | | | | — | | | | | | — | | | | | | — | | | | | | | | | — | | |
Interest | | | | | 2,254,100 | | | | | | — | | | | | | — | | | | | | | | | 2,254,100 | | |
Maintenance | | | | | 91,200 | | | | | | — | | | | | | — | | | | | | | | | 91,200 | | |
Professional fees, general and administrative and other | | | | | 577,400 | | | | | | 237,200 | | | | | | (200,000) | | | | (m) | | | | | 614,600 | | |
Other taxes | | | | | 22,600 | | | | | | — | | | | | | — | | | | | | | | | 22,600 | | |
Insurance | | | | | 79,700 | | | | | | — | | | | | | — | | | | | | | | | 79,700 | | |
Bad debt expense | | | | | — | | | | | | — | | | | | | — | | | | | | | | | — | | |
Salaries and employee benefits | | | | | — | | | | | | 739,800 | | | | | | — | | | | | | | | | 739,800 | | |
Rent | | | | | — | | | | | | 101,700 | | | | | | — | | | | | | | | | 101,700 | | |
Consulting fees | | | | | — | | | | | | 62,000 | | | | | | — | | | | | | | | | 62,000 | | |
| | | | | 7,413,700 | | | | | | 1,140,700 | | | | | | (1,666,800) | | | | | | | | | 6,887,600 | | |
Income before income tax provision | | | | | 471,400 | | | | | | 309,100 | | | | | | 238,100 | | | | | | | | | 1,018,600 | | |
Income tax provision | | | | | 154,100 | | | | | | 83,000 | | | | | | 13,400 | | | | (n) | | | | | 250,500 | | |
Net income | | | | $ | 317,300 | | | | | $ | 226,100 | | | | | $ | 224,700 | | | | | | | | $ | 768,100 | | |
Earnings per share | | | | | 0.22 | | | | | | | | | | | | | | | | | | | | | 0.50 | | |
Weighted average shares outstanding | | | | | 1,416,699 | | | | | | | | | | | | 129,286 | | | | (o) | | | | | 1,545,985 | | |
|
| | | December 31, 2017 | | |||
Cash | | | | $ | 3,500,000 | | |
AeroCentury common stock (129,286 shares) | | | | | 2,236,600 | | |
Total purchase price | | | | | 5,736,600 | | |
Cash | | | | | 841,000 | | |
Marketable securities | | | | | 135,400 | | |
Accounts receivable, net | | | | | 1,300 | | |
Receivable-AeroCentury | | | | | 493,900 | | |
Note receivable | | | | | 27,500 | | |
Deferred taxes | | | | | 27,700 | | |
Equipment | | | | | 21,600 | | |
Other assets | | | | | 215,700 | | |
Total identifiable assets(*) | | | | | 1,764,100 | | |
Accounts payable | | | | | (189,100) | | |
Accrued payroll | | | | | (99,500) | | |
Taxes payable | | | | | (841,000) | | |
Total identifiable liabilities(*) | | | | | (1,129,600) | | |
Total pro forma settlement loss(**) | | | | $ | 5,102,100 | | |
|
| AeroCentury | | | JetFleet | | | Total | | |||||||||||||||
| Accrued management and acquisition fees due to JetFleet | | | | $ | (479,000) | | | | Accrued management and acquisition fees due from AeroCentury | | | | $ | 479,000 | | | | | | | | |
| Cash consideration related to acquisition | | | | | (3,500,000) | | | | Cash consideration related to acquisition | | | | | 3,500,000 | | | | | | | | |
| | | | | | | | | | Pre-Closing Cash Dividend to JetFleet shareholders prior to acquisition | | | | | (6,927,700) | | | | | | | | |
| | | | | $ | (3,979,000) | | | | | | | | $ | (2,948,700) | | | | | $ | (6,927,700) | | |
|
| AeroCentury | | | JetFleet | | | Total | | |||||||||||||||
| Common stock issued to JetFleet, $0.001 par value | | | | $ | 100 | | | | Elimination of subsidiary equity on consolidation | | | | $ | (1,261,600) | | | | | $ | (1,261,500) | | |
| AeroCentury | | | JetFleet | | | Total | | |||||||||||||||
| Estimated settlement loss | | | | | (5,102,100) | | | | Cumulative effect of JetFleet portion of pro forma adjustments (notes a, b, c, d, f, i and j), net of taxes | | | | | (3,858,700) | | | | |||||
| Estimated non-recurring transaction costs | | | | | (500,000) | | | | Net effect of the identifiable assets acquired and liabilities assumed by AeroCentury as a result of its acquisition of JetFleet | | | | | (634,500) | | | | |||||
| | | | | $ | (5,602,100) | | | | | | | | $ | (4,493,200) | | | | | $ | (10,095,300) | | |
|
| | | | | A-2 | | | |
| | | | | A-2 | | | |
| | | | | A-10 | | | |
| | | | | A-10 | | | |
| | | | | A-10 | | | |
| | | | | A-11 | | | |
| | | | | A-12 | | | |
| | | | | A-15 | | | |
| | | | | A-15 | | | |
| | | | | A-18 | | | |
| | | | | A-18 | | | |
| | | | | A-18 | | | |
| | | | | A-19 | | | |
| | | | | A-19 | | | |
| | | | | A-19 | | | |
| | | | | A-19 | | | |
| | | | | A-19 | | | |
| | | | | A-20 | | | |
| | | | | A-20 | | | |
| | | | | A-20 | | | |
| | | | | A-20 | | | |
| | | | | A-20 | | | |
| | | | | A-20 | | | |
| | | | | A-20 | | | |
| | | | | A-21 | | | |
| | | | | A-21 | | | |
| | | | | A-21 | | | |
| | | | | A-21 | | | |
| | | | | A-21 | | | |
| | | | | A-22 | | | |
| | | | | A-22 | | | |
| | | | | A-22 | | | |
| | | | | A-24 | | | |
| | | | | A-25 | | | |
| | | | | A-25 | | | |
| | | | | A-26 | | | |
| | | | | A-26 | | | |
| | | | | A-26 | | | |
| | | | | A-26 | | | |
| | | | | A-27 | | | |
| | | | | A-27 | | |
| | | | | A-28 | | | |
| | | | | A-28 | | | |
| | | | | A-28 | | | |
| | | | | A-28 | | | |
| | | | | A-28 | | | |
| | | | | A-28 | | | |
| | | | | A-28 | | | |
| | | | | A-29 | | | |
| | | | | A-29 | | | |
| | | | | A-30 | | | |
| | | | | A-31 | | | |
| | | | | A-31 | | | |
| | | | | A-31 | | | |
| | | | | A-31 | | | |
| | | | | A-31 | | | |
| | | | | A-31 | | | |
| | | | | A-31 | | | |
| | | | | A-32 | | | |
| | | | | A-33 | | | |
| | | | | A-33 | | | |
| | | | | A-34 | | | |
| | | | | A-35 | | | |
| | | | | A-35 | | | |
| | | | | A-35 | | | |
| | | | | A-36 | | | |
| | | | | A-36 | | | |
| | | | | A-37 | | | |
| | | | | A-38 | | | |
| | | | | A-39 | | | |
| | | | | A-39 | | | |
| | | | | A-40 | | | |
| | | | | A-41 | | | |
| | | | | A-41 | | | |
| | | | | A-41 | | | |
| | | | | A-42 | | | |
| | | | | A-42 | | | |
| | | | | A-43 | | | |
| | | | | A-44 | | | |
| | | | | A-44 | | | |
| | | | | A-44 | | |
| | | | | A-47 | | | |
| | | | | A-47 | | | |
| | | | | A-49 | | | |
| | | | | A-49 | | | |
| | | | | A-49 | | | |
| | | | | A-49 | | | |
| | | | | A-50 | | | |
| | | | | A-50 | | | |
| | | | | A-51 | | | |
| | | | | A-51 | | | |
| | | | | A-52 | | |
Term | | | Section | |
Advisory Group | | | Section 9.1(c) | |
Aggregate Number of Released Parent Shares | | | Section 8.8(g)(i) | |
Aggregate Pending Claim Amount | | | Section 8.8(e) | |
Aggregate Release Amount | | | Section 8.8(g) | |
Agreement | | | Preamble | |
Agreement of Merger | | | Section 2.2(a) | |
Audited Company Financial Statements | | | Section 3.4 | |
Breach | | | Section 8.4(b) | |
California Commissioner | | | Section 5.2(a) | |
California Permit | | | Section 5.2(a) | |
Claimed Amount | | | Section 8.8(a) | |
Closing | | | Section 2.2(a) | |
Closing Consideration Schedule | | | Section 2.5(a) | |
Closing Date | | | Section 2.2(a) | |
Closing Tax Liability | | | Section 5.12(g) | |
Company | | | Preamble | |
Company Balance Sheet | | | Section 3.4 | |
Company Board | | | Recitals | |
Company Calculated Purchase Price | | | Section 2.5 | |
Company Compliance Certificate | | | Section 2.2(b)(ii) | |
Company Financial Statements | | | Section 3.4 | |
Company IP Rights | | | Section 3.8(a) | |
Company Returns | | | Section 3.19(a) | |
Company Shareholder Notices | | | Section 5.4 | |
Conclusive Cash Consideration Shortfall | | | Section 2.6(e) | |
Conclusive Cash True-Up Amount | | | Section 2.6(e) | |
Confidentiality Obligation | | | Section 5.5 | |
Contested Amount | | | Section 8.8(b) | |
Credit Agreement | | | Section 5.11 | |
Dissenting Shares | | | Section 2.4(k) | |
D&O Tail Policy | | | Section 5.10(d) | |
Effective Time | | | Section 2.2(a) | |
End Date | | | Section 7.1(b) | |
Environmental Requirements | | | Section 3.21 | |
Escrow Agent | | | Recitals | |
Escrow Agreement | | | Recitals | |
Escrow Release Date | | | Section 8.1 | |
Estimated Aggregate Cash Consideration | | | Section 2.5(a) | |
Estimated Cash Consideration Adjustment Amount | | | Section 2.5(a) | |
Estimated Consideration Adjustment Amount | | | Section 2.5(a) | |
Estimated Stock Consideration Adjustment Amount | | | Section 2.5(a) | |
Exchange Agent | | | Section 2.3(a) | |
Term | | | Section | |
Exchange Agent | | | Section 2.3(a) | |
Exchange Fund | | | Section 2.3(a) | |
Exchange Fund | | | Section 2.3(a) | |
Fairness Hearing | | | Section 5.2(a) | |
Fairness Hearing Law | | | Section 5.2(a) | |
Indemnification Claim | | | Section 8.8(a) | |
Indemnified Parties | | | Section 5.10(a) | |
Information Statement | | | Section 5.3 | |
Letter of Transmittal | | | Section 2.4(g) | |
Loss and Losses | | | Section 8.2 | |
Lubin Olson | | | Section 9.1(g) | |
Merger | | | Recitals | |
Merger Sub | | | Preamble | |
Merger Sub | | | Recitals | |
Neutral Accounting Arbitrator | | | Section 2.6(c) | |
Non-Compete Agreement | | | Recitals | |
Non-Merger D&O Claims | | | Section 8.2(h) | |
Non-Solicit Agreement | | | Recitals | |
Notice of Indemnification Claim | | | Section 8.8(a) | |
Objection Statement | | | Section 2.6(b) | |
Parent | | | Preamble | |
Parent Board | | | Recitals | |
Parent Calculated Cash Consideration Shortfall | | | Section 2.6(a) | |
Parent Calculated Cash True-Up Amount | | | Section 2.6(a) | |
Parent Prepared Consideration Schedule | | | Section 2.6(a) | |
Payoff Letter | | | Section 6.1(d) | |
Permit Information Statement | | | Section 5.2(a) | |
Pre-Closing Dividend | | | Section 5.9 | |
Pre-Closing Period | | | Section 5.1 | |
Requisite Bank Consent | | | Section 5.11 | |
Resolution Period | | | Section 2.6(b) | |
Response Notice | | | Section 8.8(b) | |
Schedule of Escrow Participants | | | Section 2.5(b) | |
Shareholder Representative | | | Section 9.1(a) | |
Shareholder Representative Engagement Agreement | | | Section 9.1(c) | |
Shareholder Representative Group | | | Section 9.1(c) | |
Significant Breach | | | Section 8.4(b) | |
Significant Contract | | | Section 3.16(a) | |
Straddle Period | | | Section 5.12(c) | |
Subsidiary Shares | | | Section 3.3(a) | |
Supplemental Disclosure Schedule | | | Section 5.14 | |
Surviving Corporation | | | Section 2.1(a) | |
Tax Reserve | | | Section 5.12(f) | |
Third-Party Claim | | | Section 8.5 | |
Transaction Documents | | | Section 8.2 | |
Unresolved Escrow Claim | | | Section 8.8(e) | |
Written Consent | | | Recitals | |
| Confidential | | | October 26, 2017 | |
|