Attached files
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| 8-K/A - AMEND#1 TO 8-K FILED 3/22/21 - AEROCENTURY CORP | acy8kree75sale.htm |
Pro Forma Statements
On
March 16, 2021, AeroCentury Corp. (the Company") sold its 100%
membership interest in ACY E-175 LLC (the"LLC"), which owned three
E-175 aircraft and was the obligee under certain debt to
Norddeutsche Landesbank Girozentrale, New York Branch ("Nord"), and
a party to an interest rate swap agreement with Norddeutsche
Landesbank Girozentrale. The buyer assumed the notes payable to
Nord and liability for the swap contract, and made a total cash
payment of $13.1 million, of which $2.1 million was retained by the
Company and $11 million was used to reduce other corporate notes
payable. The buyer acquired $2.34 million cash from the
LLC.
In
connection with completion of the sale transaction, the Company has
prepared the accompanying Unaudited Pro Forma Condensed
Consolidated Financial Statements ("Pro Forma Statements"), which
are based on the Company's historical financial information as of
and for the nine months ended September 30, 2020, and the year
ended December 31, 2019. The Unaudited Pro Forma Condensed
Consolidated Statement of Operations for the nine months ended
September 30, 2020, has been prepared with the assumption that the
sale transaction occurred on January 1, 2020, and the Pro Forma
Condensed Consolidated Statement of Operations for the year ended
December 31, 2019, has been prepared with the assumption that the
sale occurred on January 1, 2019. The Unaudited Pro Forma Condensed
Consolidated Balance Sheet for September 30, 2020, has been
prepared as if the sale transaction occurred on the balance sheet
date. The Company does not expect this transaction to qualify for
discontinued operations presentation.
The Pro
Forma Statements do not necessarily reflect what the Company's
financial condition or results of operations would have been had
the sale transaction occurred on the dates indicated or which may
result in the future. The actual financial position and results of
operations may differ significantly from the pro forma. The Pro
Forma Statements have been prepared by the Company based on
assumptions deemed appropriate by management. An explanation of
certain assumptions is set forth under the Notes to Unaudited Pro
Forma Condensed Consolidated Financial Statements.
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Unaudited Pro Forma
Condensed Consolidated Statement of Operations
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For the
Nine Months Ended September 30, 2020
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Historical
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Adjustment
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Notes
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Pro
Forma
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Revenues and other
income
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$12,659,000
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$(2,700,000)
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(a)
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$9,959,000
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Expenses
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43,827,400
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(1,776,500)
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(a)
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42,050,900
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Loss before income
taxes
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(31,168,400)
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(923,500)
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(32,091,900)
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Income tax
benefit
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3,391,200
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100,479
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(a)
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3,491,679
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Net
loss
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$(27,777,200)
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$(823,021)
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$(28,600,221)
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Income/(loss) per
share, basic and diluted
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$(17.97)
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$(0.53)
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$(18.50)
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Weighted number of
shares, basic and diluted
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1,545,884
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1,545,884
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1,545,884
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Unaudited Pro Forma
Condensed Consolidated Statement of Operations
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For the
Year Ended December 31, 2019
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Historical
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Adjustment
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Notes
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Pro
Forma
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Revenues and other
income
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$43,599,100
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$(3,600,000)
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(a)
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$39,999,100
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Expenses
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64,765,400
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(2,649,689)
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(a)
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62,115,711
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Loss before income
taxes
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(21,166,300)
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(950,311)
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(22,116,611)
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Income tax
benefit
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4,507,800
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202,388
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(a)
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4,710,188
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Net
loss
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$(16,658,500)
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$(747,923)
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$(17,406,423)
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Income/(loss) per
share, basic and diluted
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$(10.78)
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$(0.48)
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$(11.26)
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Weighted number of
shares, basic and diluted
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1,545,884
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1,545,884
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1,545,884
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Unaudited Pro Forma
Condensed Consolidated Balance Sheet
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At
September 30, 2020
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Cash and cash
equivalents
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$4,863,800
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$(582,000)
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(b)
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$4,281,800
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Restricted
cash
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50,000
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-
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50,000
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Aircraft net of
accumulated depreciation
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&
impairment
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96,052,100
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(27,606,700)
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(c)
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68,445,400
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Other
assets
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18,869,500
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-
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18,869,500
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Deferred
tax
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1,185,300
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-
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(d)
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1,185,300
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Total
Assets
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$121,020,700
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$(28,188,700)
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$92,832,000
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Accounts payable
and other labilities
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$12,201,200
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$-
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$12,201,200
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Notes payable incl.
accrued interest net of
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unamortized
discount costs
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111,575,400
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(24,051,500)
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(e)
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87,523,900
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Derivative
liability
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874,700
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(858,100)
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(f)
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16,600
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Deferred
taxes
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0
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0
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0
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Total
liabilities
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124,651,300
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(24,909,600)
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99,741,700
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Common stock and
paid in capital
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16,784,600
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0
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16,784,600
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Accumulated
deficit
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(16,895,100)
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(3,279,100)
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(g)
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(20,174,200)
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Accumulated other
comprehensive income
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(482,800)
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0
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(482,800)
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Treasury stock at
cost
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(3,037,300)
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0
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(3,037,300)
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Stockholders'
deficit
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(3,630,600)
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(3,279,100)
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(6,909,700)
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Total liabilities
and stockholders' equity
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$121,020,700
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$(28,188,700)
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$92,832,000
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These
adjustments relate to:
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(a)
elimination of revenues and expenses related to the assets
sold.
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(b)
elimination of cash balance transferred in the sale transaction,
seller cash contributed, and cash
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retained
from the sale.
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Cash balance
transferred
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$(336,000)
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Seller cash
contributed
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(2,346,000)
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Cash retained from
sale
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2,100,000
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$(582,000)
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(c)
elimination of assets sold in the sales transaction.
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(d)
deferred taxes related to assets sold, net of valuation allowance
($0).
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(e)
elimination of notes payable assumed by buyer and use of sale
proceeds to reduce non-LLC notes
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payable
of the Company.
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Gross sales
price
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$26,500,000
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Notes payable
assumed by buyer
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(13,388,255)
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Cash
retained
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(2,100,000)
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cash
used to paydown notes payable
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$ 11,011,745
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Paydown of notes
payable
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$ (11,011,745)
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Reduction in
apportioned discount on corporate debt
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348,500
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Notes payable
assumed by buyer
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(13,388,255)
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total
debt reduction
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$ (24,051,500)
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(f) elimination of derivative liability assumed by
purchaser.
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(g)
equity adjustment related to effect of above
adjustments.
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Cash
retained
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$2,100,000
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Cash used to
paydown notes payable
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11,011,745
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Cash
proceeds received
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$13,111,745
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(w)
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Elimination of cash
balance
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$336,000
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Seller cash
contributed
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2,346,000
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Elimination of
assets sold
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27,606,700
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Notes payable
assumed by buyer
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(13,388,255)
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Elimination of
derivative liability
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(858,100)
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net
assets sold
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$16,042,345
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(x)
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Net
(loss) on sale
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(w)
- (x)
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$(2,930,600)
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(y)
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Net book value of
notes payable
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$10,663,245
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Cash used to
paydown notes payable
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11,011,745
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Reduction
in apportioned discount on notes payable
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(348,500)
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(z)
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Impact on retained
earnings
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(y)
+ (z)
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$(3,279,100)
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