AeroCentury Corp.

AeroCentury Corp. is engaged in the business of investing in used regional aircraft equipment leased to foreign and domestic regional air carriers and has been engaged in such business since its formation in 1997. The Company’s principal business objective is to increase stockholder value by acquiring aircraft assets and managing those assets in order to provide a return on investment through lease revenue and, eventually, sale proceeds. The Company strives to achieve its business objective by reinvesting cash flow and obtaining short-term and long-term debt and/or equity financing.

AeroCentury acquires additional assets in one of three ways.


 * 1) It may purchase an asset already subject to a lease and assume the rights of the seller, as lessor under the existing lease.
 * 2) It may purchase an asset, usually from an air carrier, and lease it back to the seller.
 * 3) It may purchase an asset from a seller and then immediately enter into a new lease for the aircraft with a third party lessee. In this last case, the AeroCentury typically does not purchase an asset unless a potential lessee has been identified and has committed to lease the aircraft.

AeroCentury generally targets used regional aircraft and engines with purchase prices between $1 million and $10 million, and lease terms less than five years. In determining assets for acquisition, the Company evaluates, among other things, the type of asset, its current price and projected future value, its versatility or specialized uses, the current and projected future availability of and demand for that asset, and the type and number of future potential lessees.

When considering whether to accept transactions with a lessee, the Company examines the creditworthiness of the lessee, its short- and long-term growth prospects, its financial status and backing, the impact of pending governmental regulation or de-regulation of the lessee’s market, all of which are weighed in determining the lease rate that is offered to the lessee. In addition, where applicable, it is the Company’s policy to monitor the lessee’s business and financial performance closely throughout the term of the lease, and if requested, provide assistance drawn from the experience of the Company’s management in many areas of the air carrier industry.