UNITED STATES

 

 

SECURITIES AND EXCHANGE COMMISSION

 

 

Washington, D.C. 20549

 

 

 

 

 

SCHEDULE 13D

 

 

Under the Securities Exchange Act of 1934
(Amendment No. 1)*

 

AEROCENTURY CORP.

(Name of Issuer)

 

Common Stock, par value $0.001 per share

(Title of Class of Securities)

 

007737109

(CUSIP Number)

 

Lee G. Beaumont

2090 Centro Street, East

Tiburon, California 94920

(415) 889-5198

 

with a copy to:

Bruce McNamara, Esq.
Haynes and Boone, LLP
525 University Avenue, Suite 400

Palo Alto, California 94301
(650) 687-8836

(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)

 

January 9, 2015

(Date of Event Which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. x

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7 for other parties to whom copies are to be sent.

* The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

 



 

CUSIP No. 902925106

 

 

1.

Names of Reporting Persons
Lee G. Beaumont

 

 

2.

Check the Appropriate Box if a Member of a Group (See Instructions)

 

 

(a)

 o

 

 

(b)

 o

 

 

3.

SEC Use Only

 

 

4.

Source of Funds (See Instructions)
PF

 

 

5.

Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)     o

 

 

6.

Citizenship or Place of Organization
United States of America

 

Number of
Shares
Beneficially
Owned by
Each
Reporting
Person With

7.

Sole Voting Power
150,000

 

8.

Shared Voting Power
0

 

9.

Sole Dispositive Power
150,000

 

10.

Shared Dispositive Power
0

 

 

11.

Aggregate Amount Beneficially Owned by Each Reporting Person
150,000

 

 

12.

Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions)   o

 

 

13.

Percent of Class Represented by Amount in Row (11)
9.7%

 

 

14.

Type of Reporting Person (See Instructions)
IN

 

2



 

This Amendment No. 1 to Schedule 13D (this “Amendment”) is filed by and on behalf of the Reporting Person to amend the Schedule 13D related to common stock, par value $0.001 per share (the “Common Stock”) of AeroCentury Corp., a Delaware corporation (the “Issuer”) previously filed by the Reporting Person with the Securities and Exchange Commission (the “Commission”) on December 5, 2014 (as amended, the “Schedule 13D”).  Each capitalized term used and not defined herein shall have the meaning assigned to such term in the Schedule 13D. Except as otherwise provided herein, each Item of the Schedule 13D remains unchanged.

 

Item 4. Purpose of Transaction

 

Item 4 is hereby amended and supplemented as follows:

 

As previously disclosed, on December 5, 2014, the Reporting Person sent a letter (the “Initial Letter”) to the Board of Directors of the Issuer (the “Board”) outlining the proposed terms of a transaction between the Issuer and BeauTech Power Systems, LLC, a Texas limited liability company of which the Reporting Person owns 51% of the outstanding equity (“BeauTech”). Pursuant to the Initial Letter, BeauTech proposed to enter into a merger agreement with the Issuer to exchange all of the outstanding Common Stock of the Issuer for $12.50 per share in cash, which price represented a premium of approximately 50% to the closing price of the Issuer’s Common Stock on December 3, 2014 (the “Proposal”).

 

On December 17, 2014, the Reporting Person received a response letter (the “Board Letter”) from Mr. Neal Crispin, Chairman of the Board, declining on behalf of the Board to engage in discussions with the Reporting Person regarding the Proposal, stating that the Board “has determined that continuing to implement the [Issuer’s] long-term corporate strategy objectives and business plan is the best way to increase stockholder value going forward.” The foregoing is qualified in its entirety by reference to the Board Letter, which is attached hereto as Exhibit 99.2 and incorporated by reference herein.

 

On January 9, 2015, the Reporting Person sent a response letter (the “Response Letter”) to the Independent Directors of the Issuer (the “Independent Directors”) expressing his disappointment in the Board’s response to the Initial Letter. The Reporting Person challenged the Board’s assertion that its long-term strategy for improved financial condition would be the best way to unlock shareholder value, highlighting the dramatic decline in stock price since August 2014. The Reporting Person believes that the Issuer’s stockholders will only be able to realize the value of their equity holdings through a sale of the Issuer. The Reporting Person stated in the Response Letter that although his previous offer of $12.50 per share represented a significant premium to the current and expected future price of the Issuer’s Common Stock, he would be willing to discuss a possible increase in the original offer with the Independent Directors’ commitment to engage in good faith negotiations, together with favorable results of additional due diligence investigation. The Reporting Person’s offer to discuss an acquisition at a higher price will remain open until January 14, 2015. If the Reporting Person does not receive a positive response from the Independent Directors by January 14, 2015, the Reporting Person will move forward with other alternative avenues to increasing the Issuer’s stock price, including seeking representation on the Board. The foregoing is qualified in its entirety by reference to the Response Letter, which is attached hereto as Exhibit 99.3 and incorporated by reference herein.

 

Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer

 

Item 6 is hereby amended and supplemented as follows:

 

The information set forth in Item 4 is incorporated by reference into this Item 6. Except as described herein, the Reporting Person does not have any contracts, arrangements, understandings or relationships (legal or otherwise) with respect to any securities of the Issuer.

 

Item 7. Material to be Filed as Exhibits

 

Item 7 of the Schedule 13D is hereby amended and restated in its entirety as follows:

 

“The following exhibits are filed as exhibits hereto:

 

3



 

Exhibit

 

Description of Exhibit

99.1

 

Letter to the Board of Directors of AeroCentury Corp., dated December 5, 2014, by Lee G. Beaumont (incorporated by reference to the Schedule 13D filed on December 5, 2014 by the Reporting Person with the Commission).

99.2

 

Letter to Lee G. Beaumont, dated December 17, 2014, by Neal Crispin, Chairman of the Board of Directors of AeroCentury Corp., on behalf of the Board of Directors of AeroCentury Corp. (filed herewith).

99.3

 

Letter to the Independent Directors of AeroCentruy Corp., dated January 9, 2015, by Lee G. Beaumont (filed herewith).”

 

4



 

SIGNATURE

 

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

 

Date: January 13, 2015

LEE G. BEAUMONT

 

 

 

/s/ Lee G. Beaumont

 

5



 

EXHIBIT INDEX

 

Exhibit

 

Description of Exhibit

99.1

 

Letter to the Board of Directors of AeroCentury Corp., dated December 5, 2014, by Lee G. Beaumont (incorporated by reference to the Schedule 13D filed on December 5, 2014 by the Reporting Person with the Commission).

99.2

 

Letter to Lee G. Beaumont, dated December 17, 2014, by Neal Crispin, Chairman of the Board of Directors of AeroCentury Corp., on behalf of the Board of Directors of AeroCentury Corp. (filed herewith).

99.3

 

Letter to the Independent Directors of AeroCentruy Corp., dated January 9, 2015, by Lee G. Beaumont (filed herewith).

 

6




EXHIBIT 99.2

 

1440 Chapin Avenue, Suite 310

Burlingame, California 94010

650/340-1888

Fax: 650/696-3929

 

December 17, 2014

 

Lee G. Beaumont

2090 Centro Street, East

Tiburon, California 94920

 

Re:   Letter dated December 5, 2014

 

Dear Mr. Beaumont:

 

I am writing on behalf and at the direction of the Board of Directors of AeroCentury Corp. (the “Company”) in response to your letter dated December 5, 2014.  The Board of Directors has reviewed your letter together with legal counsel.

 

After discussion and deliberation, the Board of Directors has concluded that it would not be in the best interests of the Company or its stockholders to engage in discussions with you at this time regarding the proposal described in your letter. The Board of Directors has determined that continuing to implement the Company’s long-term corporate strategy, objectives and business plan is the best way to increase stockholder value going forward.

 

 

Sincerely,

 

 

 

THE BOARD OF DIRECTORS OF AEROCENTURY CORP.

 

 

 

/s/ Neal Crispin

 

Neal Crispin

 

Chairman of the Board

 

cc:  Timothy J. Harris, Morrison & Foerster LLP

 




EXHIBIT 99.3

 

LEE G. BEAUMONT

2090 Centro Street, East

Tiburon, California 94920

(415) 889-5198

 

January 9, 2015

 

The Independent Directors of

AeroCentury Corp.

1440 Chapin Avenue, Suite 310

Burlingame, California 94010

 

Gentlemen,

 

I am writing this letter in response to Mr. Crispin’s letter dated December 17, 2014.  It is very disappointing to me that the Board has refused to engage in any discussion regarding my proposal to acquire AeroCentury, thereby unlocking stockholder value.

 

In Mr. Crispin’s letter he averred that “the Board of Directors has determined that continuing to implement the Company’s long-term corporate strategy objectives and business plan is the best way to increase stockholder value going forward.”  Need you be reminded that AeroCentury’s stock price plummeted in August 2014 from over $15.00 per share to the low-to-mid $11.00 range where it remained until November 2014.  Subsequent to the dismal third quarter earnings (loss) release in November 2014 the share price went into free-fall to eventually level into the $8.00 per share range where it has remained to this day.  This dramatic loss of approximately 50% of stockholder value over a 6 month period clearly reflects AeroCentury’s extraordinarily disappointing financial results and the lack of confidence in AeroCentury’s management and “strategic” business plan. Moreover, AeroCentury’s most recent announcements of new lease transactions have failed to ameliorate this situation.  Ostensibly the Company has not promulgated long-term strategy for improved financial condition that resonates with stockholders. Accordingly, I am hard-pressed to understand how refusing to engage with me in discussions to liberate value is in the best interests of AeroCentury’s stockholders.

 

AeroCentury’s stock price has traded at a substantial discount to book value for many years, culminating most recently at a nadir of below 40% of book value.  This is a direct result of a misguided strategic plan, and entrenched structural arrangements at AeroCentury that have done nothing to enhance stockholder value.  Even if AeroCentury were able to significantly retool its strategic plan, it is unlikely that AeroCentury’s Board can unlock meaningful value for AeroCentury’s stockholders due to the excessive fees being paid for management services and other structural arrangements at AeroCentury that not only hurt stockholder value and entrench management but are also contrary to basic principles of good corporate governance.

 



 

I believe that AeroCentury’s stockholders will only be able to realize the value of their equity holdings through a sale of the Company.  Although my previous offer of $12.50 per share represented a significant premium to the current and expected future price of AeroCentury’s stock, I would be willing to discuss a possible increase in my offer with your commitment to engage in good faith negotiations together with favorable results of additional due diligence investigation.

 

I strongly urge you to reconsider your uncooperative approach, and instead immediately engage seriously with me to explore my proposal and negotiate a transaction that will benefit all AeroCentury stockholders.  As a significant stockholder of AeroCentury, I am committed to finding avenues to maximize AeroCentury’s stock price.  My offer to discuss an acquisition at a higher price will remain open until January 14, 2015.  If I do not receive a positive response by this date, I will have no choice but to move forward with other alternative avenues to increasing AeroCentury’s stock price, including seeking representation on the Board of Directors.

 

I present this proposal as a viable option for enabling the stockholders of AeroCentury to realize the value of their AeroCentury equity interests. My intentions are directly aligned with the best interests of all AeroCentury stockholders and my actions have been consistent with what I believe should be the fiduciary duties of all directors — to obtain the highest value for AeroCentury. I will continue to take any and all actions that I believe are required to ensure that AeroCentury stockholders have the opportunity to realize immediate and value-maximizing liquidity for their investment, ensure that the Board is fairly evaluating my proposal and any other acquisition proposals in a manner consistent with the best interests of all stockholders, and allow the stockholders to express their views on the fate of AeroCentury.  As always, I stand ready to meet with you as soon as possible.

 

Regards,

 

 

 

/s/ Lee Beaumont

 

 

 

Lee Beaumont

 

 

cc:                                Neal D. Crispin

Toni M. Perazzo

Bruce McNamara, Esq., Haynes and Boone, LLP

 


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