RISK FACTORS

The Consolidation involves certain risks and other adverse factors. Investors should read this entire Prospectus, including all Appendices and Supplements thereto, and consider carefully the following factors in evaluating the Consolidation, the Company and its business before completing the enclosed form of Consent Card. Although the risks described below are materially similar for the Investors in each of the Partnerships, Investors should carefully review the Supplement regarding their particular Partnership for specific considerations relating to the Investor's Partnership.

RISKS AND OTHER ADVERSE FACTORS RELATING TO CONSOLIDATION

Changes in Form of Investment Will Change Rights of Participating Investors. Participating Investors will become Stockholders and their rights as such will be substantially different from their rights as Investors of a Partnership. Specifically, Investors currently hold Units in a Partnership which intended to hold properties for nineteen to twenty-five years after commencement of operations, and then depending on market conditions, liquidate the entirety of the Partnerships' assets. Upon liquidation of a Partnership, the Investors in the Partnerships would realize the value of the Partnerships' asset investments, less the expenses of liquidation and liquidation fees payable to the General Partner. After the Consolidation, Participating Investors, as holders of Common Stock of the Company listed on the AMEX would be able to sell such shares received in the Consolidation in the public market to liquidate their investment, but the market value of the Shares may never reflect the fair market value of such assets of the Company. Unlike the Partnerships, which were required to distribute cash flow to the Investors, the Company will not be required to distribute its cash flow to stockholders. Dividends on the Common Stock will be made only when, as and if declared by the Company's Board of Directors. The Company does not intend to pay any dividend on its Common Stock in the near future, and anticipates that income and cash flow will be reinvested in assets to promote growth of the Company. The Company is not required to, nor is it likely that the Company will, at any time in the future dissolve and liquidate its assets. In addition, it is unlikely that the Company will be sold in its entirety to another entity unless the Board of Directors decides to do so. See "COMPARISON OF LIMITED PARTNERSHIP AND CORPORATE STRUCTURE."

Conflicts of Interest; No Fairness Opinion. There are a number of conflicts of interest that arise out of the proposed Consolidation and certain compensation to be paid to affiliates of the General Partner. Specifically, due to financial interests of the General Partner in the Consolidation, conflicts of interests may arise with respect to the following transactions or items of compensation: (i) allocation of the Shares between the Investors and the General Partner; (ii) the founding share issuance of 150,000 shares of Common Stock of the Company to JMC; (iii) the compensation payable by the Company for management and other services rendered by JMC to the Company and
(iv) compensation for the investment banking services with the Dealer Manager, an affiliated of the General Partner. While none of these items of compensation were negotiated at arm's length and no independent third party opinion on fairness of the Consolidation has been obtained by the General Partner, the General Partner, consistent with its fiduciary duties to the Investors and the Partnerships, believes that the terms and condition of these compensation items are fair and reasonable to the Investors and the Company.
See "CONFLICTS OF INTEREST"; "FAIRNESS"; "COMPARISON OF COMPENSATION PAID TO CORPORATE GENERAL PARTNER AND AFFILIATES AND TO MANAGEMENT COMPANY"; and "MANAGEMENT OF THE COMPANY."

The proposed management agreement between the Company and JMC provides that JMC shall receive from the Company 0.25% of the Asset Value of the Company's assets on a monthly basis and ordinary and customary re-lease and re-marketing fees payable on a per transaction basis. See "MANAGEMENT OF THE COMPANY -- The Management Company -- Compensation." JMC will also receive the acquisition, re-lease and re-marketing fees but these will not be widely disparate from those currently payable to the General Partner by the Partnerships. CKS will receive an investment banking fee of $80,000 and warrants to purchase up to 35,000 shares of Common Stock at a purchase price of $3.00 per share. Under the Management Agreement, if it were in effect for calendar year 1996, for the assets held by the Partnerships, the Company would have paid $493,600 in management fees to JMC (JMC will not receive cash distributions or overhead expense reimbursement); this is in contrast to $697,363 in management fees, cash distributions and overhead reimbursement actually paid to the General Partner by the Partnerships. The General Partner and management of the Company believe these fees are no more favorable than could have been obtained from an independent third party. In addition, in connection with JMC's engagement as the management company for the Company and as the founding initial capitalization of the Company, JMC has purchased 150,000 shares of Common Stock of the Company at $1.00 per share. This issuance may have a dilutive impact on the Investors once the Consolidation is consummated.
See "DILUTION"

No Independent Representative for the Partnerships or Investors. The General Partner initiated the Consolidation with the Company and the terms were not the result of arm's length negotiations among the General Partner, JMC, the Partnerships and the Investors and the Company. While the General Partner believes that the Consolidation is fair as between the Partnerships and their respective Investors, on the one hand, and the Company, on the other, no independent representative has acted on behalf of the Partnerships in connection with the Consolidation, nor did the General Partner negotiate the terms of the Consolidation with any Investor. If an independent representative had been retained, the terms and conditions of the Consolidation may have been different for both the Partnerships and the Investors.

No Prior Market for Common Stock; Market Price May Decrease After Consolidation. There has been no prior market for the Common Stock of the Company and it is possible that the Common Stock may trade at prices substantially below the per Share Exchange Value or the book value of the assets of the Company. The Company has applied for the listing of the Common Stock on the American Stock Exchange, subject to official notice of issuance. The market price of the Common Stock may be subject to significant volatility after the Consolidation and could substantially decrease as a result of increased selling activity following issuance of the Shares, and the fluctuating interest level of investors in purchasing the Common Stock after the Consolidation.

Secondary Market Value Not Reflective of Relative Value of Partnership Assets. Since the Partnership Units were not listed on any national or regional stock exchange, nor quoted on the National Association of Securities Dealers Automated Quotations System ("NASDAQ"), there has been limited liquidity available to Investors. Secondary sales activity for the Units has been limited and sporadic, with less than one percent of all outstanding Partnership Units traded during 1996. As of June, 1997, the Units in JetFleet I and JetFleet II are selling at $______ per Unit as compared to the book value of $______ and $______ respectively per Unit. There is no guarantee that there will be a similar relationship between the trading price of the Common Stock and the book value of the Company assets on a per share basis. See "SECONDARY MARKET AND OWNERSHIP OF PARTNERSHIP UNITS." Consequently, while the secondary market may indicate an objective market value of the Partnership Units, these values were not taken into account when determining the relative values of the Partnerships. There is no assurance that the listing of the Company's Common Stock on the American Stock Exchange will provide greater liquidity to holders thereof or that the price of such Common Stock will accurately reflect the value of the Company's assets.

Dilution. At the founding of the Company, JMC was issued 150,000 shares of Common Stock at a purchase price of $1.00 per share. This price was arbitrarily determined since at the founding the Company had no assets and there was no assurance that the Consolidation would be consummated. In addition, in connection with investment banking services to be rendered to the Company by CKS, the Dealer Manager, a warrant to purchase 35,000 Shares at a price of $3.00 per Share will be issued to CKS. As a result of the issuance of the shares to JMC at $1.00 per share the Investors will sustain an immediate dilution of $0.84 per share of Common Stock (assuming 100% Partnership Participation). In addition, upon the exercise of the CKS warrant at $3.00 per share, Investors may sustain additional dilution of $0.13 per Share of Common Stock. See "DILUTION."

Uncertain Composition of the Company; Risks of Consolidation if Only JetFleet II Participates. Because participation in the Consolidation by each Partnership requires the approval of Investors holding a majority of the outstanding Units of the Partnership, which approval is outside the Company's control, no assurance can be given as to whether JetFleet I and JetFleet II will both participate in the Consolidation. If only JetFleet II participates, then the Company will own two aircraft as tenants-in-common with JetFleet I. This may make financing of these co-owned assets more difficult for the Company, and will result in a smaller capital base for the Company.

Determination of Exchange Values Base on Appraisals Only. The Exchange Values assigned to the Partnerships are based primarily on the independent appraisals of the Partnership aircraft properties by the Appraiser, dated February 4, 1997, and do not necessarily reflect the aggregate price at which Shares may be traded after the Consolidation. The appraisals are only the Appraiser's opinions of the "current value" of such properties, which opinions are subject to significant assumptions and limitations. There can be no assurance that such properties may actually be sold for the appraised amounts or that another appraiser would reach the same conclusion with respect to appraised values. As of February 4, 1997, the Exchange Values of JetFleet I and JetFleet II were $1,363,507 and $13,285,996, respectively. The current value appraisal of the assets of JetFleet I and JetFleet II were $1,762,554 and $13,927,446, respectively. See "THE CONSOLIDATION- Exchange Value and Allocation of Shares" and "OPINIONS, APPRAISALS and REPORTS."

Director Liability. The Delaware General Corporation Law (the "Delaware GCL") authorizes the Company to eliminate the personal liability of its directors for monetary damages for a breach of fiduciary duty. The Company's Certificate of Incorporation eliminates such personal liability of the directors of the Company. The elimination of such liability was not available to the General Partners under applicable law and the Partnership Agreements.

Indemnification of Directors and Officers. The Delaware GCL provides that a corporation may indemnify its directors and officers against all liability and expenses (including attorneys' fees) incurred by reason of the fact that he or she is or was its director or officer. The Company's Certificate of Incorporation provides such indemnification of its directors and officers. This indemnification of directors and officers of the Company may make it difficult for stockholders to pursue claims against directors and officers of the Company for a breach of fiduciary duty, because in the event such a claim is asserted the Company will have to pay for the defense of such director or officer. Such indemnification is more expensive than that provided to the General Partner under applicable law and the Partnership Agreements.
See "COMPARISON OF LIMITED PARTNERSHIP AND CORPORATE STRUCTURE", "MANAGEMENT OF THE COMPANY" and "FIDUCIARY RESPONSIBILITIES."

Restrictions on Certain Business Combinations. The Delaware GCL also provides that certain business combinations with stockholders owing 15% or more of the Company's outstanding stock (an "interested stockholder") are prohibited for three years after such stockholder

becomes an interest stockholder, which may discourage a change in control of the Company or a purchase of the Company at a premium price unless approved by the Company's Board of Directors.

Dilution of Investor's Voting Power; Different Voting Rights. If the Consolidation is completed, each Stockholder will have an investment in a larger company and will thus lose voting power relative to its power in the Partnership. Investors who, as a group, make up 100% of the limited partners of each Partnership, may currently vote on certain Partnership matters in proportion to their interests in the Partnership relative to the interests of other Investors in the same Partnership. After the Consolidation, Participating Investors who elect to receive Shares will be able to vote as stockholders of the Company, and will hold approximately 86.5% of the 1,614,951 outstanding Shares, assuming both Partnerships participate. Stockholders will have one vote per Share. The Company also grants its stockholders different voting rights than the Partnerships granted the limited partners. Shareholders in corporations generally have the ability to vote on greater number of matters than limited partners. For a detailed discussion of the voting rights of Investors in the Partnerships compared with the voting rights of the Participating Investors as Shareholders of the Company, see "COMPARISON OF
LIMITED PARTNER AND CORPORATE STRUCTURE--Voting Rights."

Risks Attendant to Additional Debt or Equity Financings. The Partnerships' assets were purchased for cash and are all unleveraged. One of the motivations for the Consolidation was to permit the Company to purchase assets using debt financing on existing assets or assets to be purchased. Though the Company anticipates that the revenue generated from such acquired assets will be more than sufficient to meet its obligations under any such debt financing, any such leveraging of assets increases interest expense, exposure to risk relating to resale values of aircraft assets that it holds and increases the risk that the Company may default on its obligations. See "THE COMPANY -- Borrowing Policies." In addition, the Company may sell additional securities to raise capital which would dilute the interests of its current stockholders.

Contingent or Undisclosed Liabilities May Not Be Reflected in Exchange Value. Under the Agreement and Plan of Merger to be executed by the Company and the Participating Partnerships in connection with the Consolidation (the "Merger Agreement"), the Company will, as of the Closing Date, acquire all assets and liabilities of the Participating Partnerships. Participating Partnerships will deliver to the Company audited financial statements for such entity disclosing all known existing liabilities and reserves, if any, set aside for contingent liabilities as of the Closing Date. The General Partner will represent and warrant that, to the best of the General Partner's knowledge, the financial statements fairly present the financial position of each Participating Partnership, and that there is no liability or obligation to be set forth or reserved against in the financial statements based upon generally accepted accounting principles. If the representations and warranties are found to be incorrect after the Closing, however, the Company will not make any adjustments to reflect discovery of the liability. The accuracy and completeness of these representations are conditions to the closing of the Consolidation and if, on or prior to the Closing Date, these representations and warranties are shown to be inaccurate, there may be adjustments to the consideration paid by the Company or the Company may elect not to proceed to close the Consolidation with the Partnership that failed to fully and accurately disclose its financial position. See "THE CONSOLIDATION--Exchange Value and Allocation of Shares."

Majority Vote Will Bind All Investors of the Partnership. In accordance with the Partnership Agreements of the Partnerships, upon the affirmative vote of holders of more than 50% of the outstanding Units of a Partnership approve the Consolidation and the related amendments to the Partnership Agreements, the Partnership will be merged with and into the Company and all Investors of the Partnership, excluding Dissenting Investors who comply with the procedure of the California Partnership Act, will participate in the Consolidation and will receive Common Stock of the Company. Dissenting Investors who follow the statutory procedure

for perfecting dissenter's rights are entitled to receive the fair market value of their Units in the Partnership as of the date the Consolidation is announced. See "THE CONSOLIDATION--Dissenting Rights." If, however, JetFleet I Investors approve the Consolidation, but JetFleet II Investors do not, the Consolidation will not be consummated. The Company may, however, consummate the Consolidation between the Company and JetFleet II, if the JetFleet II Investors approve the Consolidation, notwithstanding that JetFleet I Investors fail to approve it. In determining whether to proceed with a Consolidation with JetFleet II only, the Company will determine whether the number of dissenting Investors, the number of Participating Investors and the asset base of JetFleet II alone will provide a sufficient basis for the Company to meet its objectives and satisfy all the conditions for the Consolidation set forth in the Merger Agreement.

Investment Policies as Guidelines Only. The descriptions in this Prospectus of the major policies and the various types of investments to be made by the Company reflect only the current plans of the Company's Board of Directors. In addition, the methods of implementing the Company's investment policies may vary as new investment techniques are developed. See "THE COMPANY--Acquisition Policies." THE COMPANY RESERVES THE RIGHT AT THE SOLE DISCRETION OF THE BOARD OF DIRECTORS TO ALTER THE NATURE AND TIMING OF THE COMPANY'S BUSINESS PLANS IN ORDER TO RESPOND TO CHANGING MARKET CONDITIONS AND OPPORTUNITIES.

RISKS RELATING TO THE BUSINESS OF THE COMPANY AND THE PARTNERSHIPS

Although Investors already face many of the following risks as holders of Units, they should nevertheless consider carefully the following factors before completing the enclosed form of Consent Card.

Acquisition of Additional Assets by the Company. Subsequent to the Consolidation, the Company intends to seek debt financing which may be secured by the existing or to-be-acquired assets of the Company. The proceeds will be used by the Company to acquire additional assets for the purpose of generating income for the Company. The Company anticipates it will be able to expend the entire financing proceeds on the acquisition of additional assets on terms favorable to the Company, but the Company has not entered into any contracts and there is no assurance that the Company will be able to purchase assets and sell or lease assets on favorable terms. The Company may thereafter use debt or equity financing to acquire additional assets. Additional debt financing will subject the Company to increased risks of leveraging. See "RISK FACTORS -- Risks and Other Factors Relating to the Consolidation -- Intent to Incur Significant Debt" and "THE COMPANY -- Borrowing Policies." Additional equity financing may dilute the equity holdings of the Investors. See "THE COMPANY -- Equity Financing." In any event, due to the cyclical nature of the aircraft industry, there is no assurance that assets acquired by the Company will retain their anticipated resale value or will generate the income anticipated over their useful life. See "BACKGROUND AND REASONS FOR THE CONSOLIDATION --
Aircraft Industry Outlook."

Reliance on JMC. Once the Consolidation is consummated, all management of the Company will be performed by JMC pursuant to the terms of the Management Agreement between JMC and the Company. Investors should be prepared to entrust all aspects of management to the Board of Directors of the Company. JMC will not be a fiduciary to the Company or its stockholders. The Board of Directors will, however, have ultimate control and supervisory responsibility over all aspects of the Company and will owe fiduciary duties to the Company and its stockholders. In addition, while JMC may not owe any fiduciary duties to the Company by virtue of the Management Agreement, the officers of JMC are also officers of the Company, and in that capacity owe fiduciary duties to the Company and the stockholders by virtue of holding such offices. There may, however, be conflicts of interest arising from such dual roles.

The Management Agreement may be terminated upon a default in the obligations of JMC to the Company. The officers of JMC will also be officers of the Company, and certain directors of the Company may also be directors of JMC. Consequently, the directors and officers of JMC may have a conflict of interest in the event of a dispute over obligations of the Company to JMC.
See "RISK FACTORS -- Reliance on JMC"; "FIDUCIARY RESPONSIBILITIES" and "CONFLICTS OF INTEREST."

Government Regulation. As discussed in detail in "THE COMPANY--Regulatory Concerns," there are a number of areas in which government regulation may result in costs to the Company. These include aircraft registration, safety requirements, required equipment modifications, and aircraft noise requirements. Although it is contemplated that the burden of complying with such requirements will fall primarily upon lessees of Equipment, there can be no assurance that the cost of complying with such government regulations will not fall on the Company. Furthermore, future government regulations could cause the value of any non-complying Equipment owned by the Company to substantially decline.

Competition. The aircraft leasing industry is highly competitive. The Company will compete with aircraft manufacturers, distributors, airlines and other operators, equipment managers, leasing companies, equipment leasing programs, financial institutions and other parties engaged in leasing, managing or remarketing aircraft, many of which have significantly greater financial resources and more experience than the Company. The Company, however, believes that it has a competitive advantage in its niche market of financing used turbo-prop aircraft to regional air carriers. The larger competitors in the aircraft industry have largely neglected this market, which is characterized by transaction sizes of less than $10 million and lessee credits that are strong, but generally unrated and more speculative than that of the major air carriers. JMC, the management company for the Company, has developed a reputation as a global participant in this segment of the market, and the Company believes this will benefit the Company. There is no assurance that the lack of significant competition from the larger aircraft leasing companies will continue or that the reputation of JMC will continue to be strong in this market segment and benefit the Company. See "THE COMPANY."

Risks of Foreign Operations. The Company may enter into leases for equipment which will be operated and/or registered in foreign jurisdictions. Such foreign operations and registration may result in additional risks due to different regulation of aviation equipment, foreign taxes, currency risks and seizure of the asset by the foreign government. See "THE COMPANY--Lessees."

Casualties, Insurance Coverage. The Company, as owner of transportation equipment could be held liable for injuries or damage to property caused by its assets. Though some protection may be provided by the United States Aviation Act with respect to its aircraft assets, it is not clear to what extent such statutory protection would be available to the Company. Though the Company may carry insurance or require a lessee to insure against a risk, some risks of loss may not be insurable. An uninsured loss with respect to the Equipment or an insured loss for which insurance proceeds are inadequate, would result in a possible loss of invested capital in and any profits anticipated from such Equipment. See "THE COMPANY--Lessees."

Leasing Risks. The Company's successful negotiation of lease extensions, re-leases and sales may be critical to its ability to achieve its financial objectives, and will involve a number of substantial risks. Demand for lease or purchase of the assets depends on the economic condition of the airline industry. Ability to re-lease or resell Equipment at acceptable rates may depend on the demand and market values at the time of re-lease or resale. The Company anticipates that the bulk of the equipment it acquires will be used aircraft equipment. The market for used aircraft is cyclical, and generally, but not always, reflects economic conditions and the strength of the travel and transportation industry. The demand for and resale value of many types of older aircraft in the

recent past has been depressed by such factors as airline financial difficulties, increased fuel costs, the number of new aircraft on order and the number of older aircraft coming off lease; however, the General Partner and the Company believe that just as general economic conditions have improved over the last few years, the aircraft industry is improving, with both demand, asset prices and lease rates strengthening and increasing. See "BACKGROUND AND REASONS FOR THE CONSOLIDATION -- The Aircraft Industry Outlook." There is no assurance that such improvement will continue. The Company's expected concentration in a limited number of airframe and aircraft engine types (generally, turboprop equipment) subjects the Company to economic risks if those aircraft engine types should decline in value.

Risks Related to Regional Air Carriers. Because the Company intends to concentrate on leases to regional air carriers, it will be subject to certain risks. First, lessees in the regional air carrier market include a number of companies that are start-up, low margin operations. Often, the success of such carriers is dependent upon arrangements with major trunk carriers, which may be subject to termination or cancellation by such major carrier. This market segment is also characterized by low entry costs, and thus, there is strong competition in this industry segment from start-ups as well as major airlines. Thus, leasing transactions with these types of lessees results in a generally higher lease rate on aircraft, but may entail higher risk of default or lessee bankruptcy. The Company will evaluate the credit risk of each lessee carefully, and will attempt to obtain third party guaranties, letters of credit or other credit enhancements, if it deems such is necessary. There is no assurance, however, that such enhancements will be available or that even if obtained will fully protect the Company from losses resulting from a lessee default or bankruptcy. See "THE COMPANY -- Lessees." Second, a significant area of growth of this market is in areas outside of the United States. Leasing to foreign operators entails certain risks. See "-- Risk of Foreign Operations," above.

                                             No. Unit            Aggregate
Partnership         Offering Period           Sold            Offering Amount       No. of Investors
-----------         ---------------       ------------        ---------------       ----------------
JetFleet I          6/89 - 6/91              296,069           $14,803,450              1,032

JetFleet II         10/91 - 4/94             693,505           $34,675,250              1,919

All of the net proceeds from the offerings of the Partnership Units have been invested, except for amounts reserved to meet maintenance obligations not covered by lessees. Since inception, the Partnerships' investment objective has been to provide Investors with cash distributions. Increasingly, however, Investors, have indicated a desire to have liquidity of their investment in the Partnership. Currently, one avenue available to provide liquidity to such an Investor is the secondary market, which is characterized by a small number of participants and infrequent transactions. See "SECONDARY MARKET AND OWNERSHIP OF PARTNERSHIP UNITS." Another way to provide liquidity would be for the General Partner to terminate each Partnership and liquidate all of its assets. However, for reasons as discussed below, the Partnerships may be unable, because of current market conditions which have devalued the assets of the Partnership and the unfavorable bargaining position of a seller in the process of winding up, to liquidate the Partnerships in a way that will allow the Partnerships to return the Investors' original capital investment in the Partnerships. Furthermore, such a liquidation will adversely affect those Investors who desire to remain invested in the aircraft equipment industry. Consequently, the Consolidation is intended to meet demands of certain Investors for liquidity in investment, while enabling those Investors who believe that current market conditions favor growth in their investments in aircraft assets to maintain their investment in the business of the Partnerships. The Consolidation will also have the further benefit of creating an investment entity that will have more flexibility than the Partnerships to invest in market opportunities and use debt and equity financing to promote its growth.

The General Partner and the Company believe that the aircraft industry is in the early stages of a recovery market, with demand for equipment once again on the rise, but prices depressed relative to the value of the equipment. See "-- Aircraft Industry Outlook," below. The General Partner believes the current market is a favorable one in which to buy assets that have the capability of generating income while retaining, or possibly even appreciating in value. Sale of existing assets, however, would be the only practicable way to raise capital in the Partnerships to make additional purchases at this time, which purchase of additional assets is believed by the General Partner to be an important part of a strategy to return original capital to the Investors.

The Consolidation will provide Participating Investors with an investment in a new entity that has much greater flexibility than the Partnerships and can best take advantage of the potentially profitable opportunities available in the current aircraft industry market. The Company will not be limited to the strict acquisition policies of the Partnerships and will have the ability to adjust its

policies to take advantage of market opportunities. The Company should be able to more easily obtain financing to acquire additional aircraft, and by its status as a listed company on a national exchange should have access to both debt and equity capital at costs lower than that available to the Partnerships.

THE AIRCRAFT INDUSTRY OUTLOOK

General. According to the 1996 Current Market Outlook Report, (the "1996 Report") published by the Boeing Commercial Airplane Group Marketing (March 1996), the early 1990's can best be characterized by the imbalance between capacity and demand. The slowdown in the world economic growth coincided with the delivery of a record number of airplanes, ordered during the boom years of the late 1980's. By the mid-1990's, airlines had restrained growth, increased load factors, and aggressively reduced costs. A world economic recovery and stable fuel prices also benefitted the airline industry. In the 1996 Report, Ron Woodard, President of the Boeing Commercial Airplane Group states, "The industry appears to have made it through the bottom of the cycle." The 1996 Report projects that leasing companies are expected to continue to play an increasing role in the aircraft industry financing, with lessors continuing the growth shown in the increase in lessor's fleets from 200 aircraft in 1986 to over 1,000 in 1995. Aircraft operators will depend upon operating lease companies to continue to make investment in aircraft, and are expected to benefit from the increased flexibility offered by operating lessors. According to Aviation Week and Space Technology 's "Forecast '97" (March 17, 1997), "Civil aviation is booming, with Asia expected to fuel much of the industry's future growth. Moreover, it appears that the upturn following the worst recession in commercial aviation history may last at least several more years before peaking."

Regional Air Carrier Segment. The Company believes that it has identified a market niche of leasing used turboprop aircraft to regional air carriers. The Company is one of the few lessors of used aircraft in that market. Although there are many larger competitors, including leasing companies, banks and financial institutions, that engage in financing of leased aircraft, management of the Company has observed that most of those larger competitors have chosen not to finance used aircraft, engage in financing transactions for less than $10 million and/or engage in transactions with the smaller regional carriers and operators. The remaining competitors of the Company in this market are generally captive to a particular aircraft manufacturer, and only finance transactions for aircraft manufactured by that particular company.

The regional air carrier market is expected to experience high growth in the coming years. According to an article in Aviation Week and Space Technology 's "Forecast '97" (March 17, 1997), entitled "Regionals Poised for Steady Expansion," by 2005, regional airlines in the U.S. will be carrying record numbers of passengers on board larger, faster turboprops and jet aircraft, flying on longer routes, as unprecedented growth in air travel fuels expansion. The article goes on to explain that the regional fleet in the U.S. is expected to grow from 2,100 aircraft today to nearly 3,000 in the next decade, with turbo-prop aircraft, especially those capable of cruise speeds in excess of 300 knots continuing to form the backbone of the regional fleet in the years ahead. According to the article, acquisitions of high speed turbine power transports will increase and is expected to be the most active segment of the market.

Growth of regional airlines outside of the United States is expected to be even stronger. According to Phillips 1997 Regional Airline Directory's "Regional Market Overview," worldwide traffic forecasts call for regional revenue passenger miles ("RPMs") to continue to increase at rates higher than mainline traffic. While the Federal Aviation Administration's 1996 Outlook projects a 6.7% RPM growth for U.S. regional carriers, Saab's 1995-2010 market forecasts calls for annual worldwide growth ranging from 7.3% in the Pacific Rim to 4.0% in North America. To accommodate the expected growth in revenue passenger demand, carriers will need to acquire and finance appropriate short-haul regional aircraft. The Company believes that it is well-poised to take

advantage of the business opportunities presented by the improving vigor of the aircraft industry and the anticipated growth of the regional carrier market.

BACKGROUND OF THE CONSOLIDATION AND ALTERNATIVES CONSIDERED

Before deciding to recommend the Consolidation, the General Partner considered numerous alternatives including (i) sales of entire Partnership portfolios, (ii) debt alternatives, and (iii) sales of individual Partnership assets. The General Partner also considered the continued management of the Partnerships as currently structured, but does not believe that it is in the best interest of Investors as the General Partner believes that the level of Partnership cash distributions is likely to decline. This decline would be due to the combination of (i) the anticipated loss of revenue associated with the termination of equipment leases; (ii) depreciation of the Partnership's asset base; and (iii) current Partnership Agreement prohibitions on incurring debt, which precludes the Partnerships from using such debt financing to acquire assets, and thereby increase revenue and cash distributions to Investors. Consequently, the General Partner believes that the Consolidation will have the greater potential likelihood of providing optimal economic benefits for the Investors.

The following is a summary of the principal alternatives to the Consolidation considered by the General Partner and the reasons for their rejection of such alternatives. A more detailed description follows this summary:

            Alternative                                                       Reason
            -----------                                                       ------
Continued Management of Partnerships as Currently        o        Despite a potentially rising market,
Structured                                                        depreciation of the Partnerships' asset base
                                                                  and the inability to purchase additional
                                                                  assets in this favorable market is
                                                                  anticipated to result in declining
                                                                  Partnership revenue and value.

                                                         o        Fixed expenses will take an increasing
                                                                  proportion of the Partnership's declining
                                                                   revenue base.

Debt Financing                                           o        The Partnership Agreements severely limit or
                                                                  prohibit debt financing and would require
                                                                  amendment by a vote of the limited partners.

                                                         o        Even if a partial debt financing for the
                                                                  purpose of funding cash distributions were
                                                                  permissible, the maximum practicable
                                                                  projected debt financing amount available
                                                                  from lenders would only provide a partial
                                                                  return of capital to the Investors.

                                                         o        In the event of a partial debt financing,
                                                                  the remaining Investors' equity in the
                                                                  Partnership's assets  would be subject to
                                                                  greater risk of loss due to the debt on the
                                                                  assets, and yet would yield a lower rate of
                                                                  return, as servicing the debt would reduce
                                                                  cash available for distribution.


Sale of Individual Properties or the Portfolio           o        Sales during the early stages of the current
of Properties                                                     recovery market are likely to result in less
                                                                  than optimal sales prices for the assets.

                                                         o        High transaction costs may be prohibitive
                                                                  for sales of individual properties to
                                                                  separate buyers.

                                                         o        Pre-existing leases on equipment owned by
                                                                  the Partnerships makes sales to parties
                                                                  desiring immediate use of the Equipment
                                                                  impossible.

                                                         o        There are a limited number of purchasers
                                                                  with the financial capability to purchase
                                                                  individual assets and even fewer purchasers
                                                                  able to acquire the entire portfolio.

General. Since each Partnership expected to hold its assets for a number of years after investment in order to permit the assets to generate cash flow for the Partnership, the General Partner made no efforts to dispose of the properties in the early years of the Partnership. The General Partner concentrated its initial efforts on making suitable investments for the Partnerships, consistent with the Partnerships' investment policies and restrictions, and on managing the Partnerships efficiently to control operating expenses while maximizing operating revenues.

Recently, an increasing number of Investors in the Partnerships in written and oral communications with the General Partner have asked the General Partner to provide liquidity of the Investors' investments in the Partnership. The only way in which the General Partner could provide such liquidity, however, would be to terminate the Partnership, liquidate the assets of the Partnership and distribute the cash proceeds to the Investors. However, the General Partner

believes that the sale of Partnership assets and liquidation of the Partnerships in the current market would be difficult to maximize value to Investors.

Significant unanticipated changes occurred in the financial and aircraft leasing markets since the inception of the Partnerships in the early 1990's. These changes, consisting primarily of new government regulations regarding aircraft engine noise and aging airframes, the Gulf War, the general economic recession, and the oversupply of aircraft in the market caused by a record delivery of aircraft ordered during the boom years of the late 1980's, adversely affected asset prices in general and the value of the Partnerships' properties. The aircraft industry appears to be at the beginning of an upturn; the aircraft equipment market has recently showed signs of strengthening, and equipment prices and lease rates appear to be firming up. See "-- The Aircraft Industry Outlook," above. The General Partner believes that this market is potentially an advantageous one for making additional investments in aircraft equipment.

In response to the inquiries of Investors, the General Partner began to explore the options that would enable the Partnerships to meet the divergent investment objectives of the Investors of a return on original capital through continued investment in the aircraft industry and immediate liquidity of investment in the Partnership investments. The economic factors described above led them to conclude that liquidation of the Partnerships' assets under the current general market conditions would likely result in sales of the Partnerships' assets at prices that would not provide Investors their best return on the investment. Before deciding to recommend the Consolidation, the General Partner considered alternatives to the proposed Consolidation in an effort to achieve maximum investor return while also providing Investors with anticipated liquidity within an earlier time frame than the nineteen to twenty-five year time frame after investment until termination of the Partnership. These alternatives were (i) continued management of the Partnerships as currently structured, (ii) entire portfolio sales, (iii) debt financing, and (iv) sales of individual assets.

Continued Management of Partnerships As Currently Structured. The General Partner has considered continuing the management of the Partnerships as they are currently structured. JetFleet I and JetFleet II are not required to liquidate and wind up until the year 2014 and 2010, respectively. The General Partner does not believe that this alternative to the Consolidation is in the best interests of the Investors, as it is not likely to enable the Partnerships to return original capital to the Investors. Furthermore, it does nothing to provide current liquidity to Investors, and the only avenue for liquidity for Investors would be the thinly and sporadically traded secondary market.

As a result of the expiration of initial equipment leases, each Partnership will likely have declining revenue. Furthermore, the Partnership structure prevents the General Partner from making new leveraged investments to maintain cash distributions at an acceptable level, since the use of borrowings to acquire new properties is either not permitted or severely restricted under the current Partnership Agreements. Therefore, the Partnership structure contributes to the difficulty the General Partner has experienced in attempting to meet the Partnership's investment objectives. As a result of these factors, each Partnership generally has and will continue to have fixed expenses allocated over a declining revenue base. Finally, the General Partner believes there is no viable market in which to liquidate the Partnership assets under favorable terms and conditions. Therefore, if the Partnerships were to continue as currently managed, Investors would likely retain an investment without growth or liquidation opportunities in a Partnership which has a declining asset base and the likelihood of a declining income stream for a significant period of time.

Debt Financing. The Partnership Agreements require that the Partnerships acquire property without the use of debt in most cases. The General Partner began to explore alternatives to the Consolidation that would require the Partnerships to borrow significant amounts of secured and unsecured debt and would require the approval of Investors. The funds borrowed would be returned to the Investors as return of capital.

Although this debt alternative would have enabled the Partnerships to return a significant portion of an Investor's capital, in order to obtain optimal debt pricing, the General Partner would have had to combine the Partnerships in a manner that would allow cross-collateralization of the largest possible pool of assets of the Partnerships, which would permit one large borrowing, and lower the transaction costs. Second, to secure a rating on the debt transaction sufficient to market the debt to investors, the maximum borrowing would have approximated 70% of the asset value of the Partnership. After receiving this partial return of their capital, Investors would remain holders of the Units for a significant time period, with greater risk on their investment due to the borrowing and yet with a lower return than holders of the senior debt. Third, the use of debt was inconsistent with the General Partner's obligation to develop a long-term strategy for liquidation of investment and maximum investor return because the Investors would remain holders of the Units, and the Partnerships' assets would still have to be sold. Fourth, although the debt alternative provided some tax advantages for certain investors, those Investors that were tax-exempt entities would likely have been required to pay taxes on the unrelated business taxable income that borrowing at the Partnership level would have created. Approximately 15% of Investors of the Partnerships are tax-exempt investors. Finally, a significant roadblock to a debt financing is that while JetFleet II has some restricted ability to incur debt, JetFleet I has no power to do so. Consequently, because significant assets of the Partnership are co-owned, such financing would require the approval of the Investors of both Partnerships.

Sale of Assets. Other alternatives to the Consolidation considered by the General Partner included selling the Partnerships' assets, either as individual items or as an entire portfolio. These alternatives were rejected by the General Partner for various reasons. Since nearly all of the assets of the Partnerships are subject to leases with third parties, sale of these assets is not possible to purchasers who desire immediate use of the aircraft. The remaining companies that have the financial capability to purchase such assets for investment purposes are limited. There are even fewer potential buyers of an entire portfolio. In addition, the sale of each individual Partnership asset would be more costly and time consuming. Furthermore, because the niche market in which the Partnerships do business is relatively close knit and well informed, knowledge that the Partnerships are liquidating would likely lead to the perception by buyers that the Partnerships are motivated sellers. This would further adversely affect the Partnerships' ability to get a fair value for its assets. Finally, though the General Partner has not made nor solicited any offers regarding sale of any of its assets, it continuously monitors the sales prices of the Partnerships' assets. The General Partner believes there is currently no viable market in which to liquidate all of the assets of the Partnerships at one time under favorable terms and conditions, as demand and prices are now only beginning to recover from their depressed state during the early 1990's.

The General Partner engaged the Appraiser to determine the potential immediate liquidation value for the Partnerships' assets. (See, "REPORTS, OPINIONS AND APPRAISALS"). Based on an appraisal of liquidation values of the Partnership's assets in a liquidation occurring over the course of less than six months, each JetFleet I Investor would receive $1.91 per Unit, and each JetFleet II investor would receive $8.95 per Unit. This per Unit liquidation value was calculated as follows:

                                                       JetFleet I             JetFleet II
                                                       ----------             -----------
Liquidation Value (1)                                  $1,148,545             $9,056,455
Other Assets/Liabilities, Net                            (399,047)              (641,450)
   Estimated Brokerage Fees (2)                           (34,456)              (543,387)
   Estimated Legal Fees                                   (49,070)              (550,930)
   Corporate General Partnership Interest (3)              (6,660)              (366,034)
   Sales Tax (4)                                          (94,755)              (747,158)
                                                          ------                -------
Total Liquidation Proceeds                              $ 564,557            $ 6,207,495
Per Unit                                                   $ 1.91                 $ 8.95

(1) Based on the Appraiser's appraisal of liquidation values of the Partnerships' assets as of February 4, 1997.
(2) Based on maximum brokerage fees payable by the Partnership pursuant to the Partnership Agreement by JetFleet I and II of 3% and 6%, respectively.
(3) Represents the general partnership interest of the Corporate General Partner of 1% and 5% in JetFleet I and JetFleet II, respectively.
(4) At the California rate of 8.25%.

DEFINITIVE OFFERS

During the 18 months preceding the date of this Prospectus, no offer has been made by a third party or solicited by the Partnership regarding a merger, consolidation or combination of the Partnerships, an acquisition of any of the Partnerships or a material amount of their assets, a tender offer for or other acquisition of securities of any class issued by any of the Partnerships or a change in control of any of the Partnerships.

REASONS FOR THE CONSOLIDATION

Among the reasons for the General Partner's decision to recommend the Consolidation are the following:

o The General Partner believes that the Consolidation will result in the Company becoming a broader based, more financially capable aircraft lessor. The Company as successor company to the Partnerships will have flexibility to make investments that take advantage of the current market conditions in a way that the Partnerships could not.

o The General Partner believes that the Consolidation provides an opportunity to meet the original Partnership investment objectives of providing a return on capital of Investors. Through anticipated Company growth, the Company intends to be able to increase the value of the Investors' equity holdings in the Company.

o As a result of the Consolidation and the listing of the Company's Common Stock on a national securities exchange, Stockholders will have the potential for greater liquidity of investment.

o Appreciation in the price of the Shares could result if the Company is successful in taking advantage of growth opportunities based on the Company's anticipated cost of the new capital and the anticipated return from investment in additional properties.

o The Consolidation will help create a more visible, active leasing company within its market niche. The Company's increased visibility due to its anticipated increased leasing capability and activity and a strong market position within its niche should contribute to its objectives of achieving growth and increased investor value.

o The Company expects to grow through investments in new and existing assets in the Company's market niche of used turbo-prop equipment for regional air carriers, which industry segment is growing at a fast rate. As a result, the General Partner believes significant growth is attainable.

o Assuming both Partnerships participate in the Consolidation, the Company will hold a larger portfolio of assets than any single Partnership, and will become

even more diverse as additional assets are acquired by the Company using debt and equity financing. The diversification of assets is anticipated to reduce risk for Stockholders by spreading the risk of investment over a broader and more diverse group of assets, and by reducing the dependence of investment on the performance of any particular asset or group of assets, any specific geographic area or any specific lessee.

o The consolidation will result in simplified federal and state tax reporting for Investors and the Company. Stockholders will receive Form 1099-DIV to report any dividends. This form will be distributed by January 31 of each year following a year in which dividend distributions have been made. The complicated Schedule K-1, which Investors generally receive by March 15 of each year, will not be used. Participating Investors will no longer be subject to state tax withholding, or be required to file individual state tax returns (other than in their state of residence) solely as a result of an investment in the Company.

HISTORICAL CASH DISTRIBUTIONS AND ASSIGNED EXCHANGE VALUE

The following table sets forth selected information per $1,000 original investment in the Partnership projected through the Anticipated Consummation Date. The Exchange Value of the Partnerships is based primarily on the independently appraised market value of their assets, and does not necessarily reflect the aggregate price at which Shares may be sold. See "THE CONSOLIDATION--Exchange Values and Allocation of Shares." The table below shows the amount of cash distributions received to date on the Units of JetFleet I and JetFleet II Investors in the first column, the second column shows the value of the Shares to be received per original $1,000 investment in the Partnerships assuming a $10 value per Share), and the third column represents the total cash and share value to be received by Investors in JetFleet I and JetFleet II for each $1,000 investment if the Consolidation is consummated.

                                                                            Total of
                                                                           Cumulative
                               Cumulative                              Distributions and
                            Distributions to         Assigned              Assigned
Partnership                   Investors(1)       Exchange Value(2)      Exchange Value
-----------                   ---------          ---------------        --------------
JetFleet I
               First          $ 603.40                  $  90.00              $ 693.40
                Last          $ 383.40                  $  90.00              $ 473.40
JetFleet II
               First          $ 641.60                  $ 360.00              $1001.60
                Last          $ 361.00                  $ 360.00              $ 721.00

THE CONSOLIDATION

The information contained in this Prospectus with respect to the Consolidation is qualified in its entirety by reference to the Agreement and Plan of Merger by and among the Company and the Participating Partnerships (the "Merger Agreement"), a copy of which is attached hereto as Appendix A and incorporated herein by reference.

GENERAL

The Consolidation is to be effected in accordance with the terms and conditions set forth in the Merger Agreement. The Merger Agreement provides that, in accordance with the Delaware GCL and the California Partnership Law, at the time of filing of a Certificate of Merger with the Delaware Secretary of State, or at such later time thereafter as may be specified in the Certificate of Merger (the "Effective Time"), each of the Participating Partnerships will be merged with and into the Company, their separate existences will cease and the Company will continue as the surviving entity. As of the Effective Time, each Unit of a Participating Partnership will automatically be converted into the right to receive Shares.

Approval of the Consolidation by a Partnership constitutes consent to the merger of the Partnership with and into the Company pursuant to the terms of the Merger Agreement and to all actions necessary or appropriate to accomplish the Consolidation, including approval of the Amendments to the Partnership Agreements. Immediately after the Effective Time, the officers of the Company shall consist of the persons listed under "MANAGEMENT." The Board of Directors shall consist of the three current directors of the Company, and it is anticipated that two additional outside directors will be appointed immediately after the Consolidation.

Consummation of the Consolidation is subject to certain conditions. See "THE CONSOLIDATION -- Conditions to the Consolidation."

APPROVAL AND RECOMMENDATIONS OF THE GENERAL PARTNER

Each general partner of the Partnerships has approved the Consolidation. The General Partner believes that an investment in the Company through the ownership of Common Stock will provide greater benefits to Investors than the benefits derived from an investment in an individual Partnership. See "BACKGROUND AND REASONS FOR THE CONSOLIDATION" and "FAIRNESS." Consequently, the General Partner recommends that the Investors of each Partnership consent to the Consolidation. However, Investors are urged to consider carefully the factors described under "RISK FACTORS" and the comparison of an investment in a limited partnership versus an investment in the Company set forth under "COMPARISON OF LIMITED PARTNERSHIP AND CORPORATE STRUCTURE." Investors are also urged to review the Supplement for their respective Partnership and to consult with their independent financial and tax advisors prior to consenting to the Consolidation.

VOTE REQUIRED FOR APPROVAL OF THE CONSOLIDATION

Participation in the Consolidation by a Partnership requires the affirmative vote of holders of more than 50% of the outstanding Units of the Partnership. This Prospectus constitutes the solicitation of the approval of the Investors to the Consolidation, including all such actions required by the Partnerships to consummate the Consolidation. Because JetFleet II's anticipated net assets as of the Anticipated Consummation Date constitute over 88% of the aggregate value of the Partnerships' assets, at the discretion of the Company, the Consolidation will be consummated notwithstanding the nonparticipation of JetFleet I, provided that the Consolidation is approved by JetFleet II. In determining whether to proceed with a Consolidation with JetFleet II only, the Company will determine whether the number of dissenting Investors, the number of Participating Investors and the asset base of JetFleet II alone will provide a sufficient basis for the Company to meet its objectives and satisfy all of the conditions for the Consolidation set forth in the Merger Agreement. Such a Consolidation between JetFleet II and the Company alone is subject to certain considerations summarized in the Supplement for JetFleet II. JetFleet II Investors are urged to carefully review the Supplement accompanying this Prospectus when considering the Consolidation.

AMENDMENTS TO PARTNERSHIP AGREEMENTS

The Partnership Agreements do not specifically address the merger of the Partnerships or the conversion of Partnership Units for equity securities. Therefore, the General Partner is requesting the consent of Investors to amend the Partnership Agreements to include specific provisions regarding the Consolidation. By voting "YES" in favor of the Consolidation, an Investor will also have approved the proposed amendments to his or her Partnership Agreement (the "Amendments"), which expressly authorize all actions necessary to successfully accomplish the Consolidation as described in this Prospectus. The amendments also provide for a uniform dissenters' rights procedures for both JetFleet I and JetFleet II Investors. See "VOTING PROCEDURES--Amendments to Partnership Agreements." A discussion of the substance of each of the amendments and the form of the Amendment to the Partnership Agreement is set forth in the Supplement for the respective Partnership. The Partnership Agreement provides that any person who votes "NO" on the Consolidation is entitled to dissenters' rights. To make the dissenters' rights provisions consistent with California law, dissenters' rights will be available to any Investor that does not vote "YES" on the Consolidation.

CONDITIONS TO THE CONSOLIDATION

Consummation of the Consolidation is conditioned upon each of the following, any or all of which other than (i), (ii) and (viii) may be waived by the Company and General Partner in whole or in part:

(i) approval of the Consolidation by Investors holding a majority of the outstanding Units of the Partnerships; provided, however, that at the sole discretion of the General Partner and the Company, the merger of JetFleet II with the Company may be consummated notwithstanding the failure of Investors in JetFleet I to approve the Consolidation;

(ii) approval of the listing of the Shares on the American Stock Exchange, subject to official notice of issuance;

(iii) receipt of all necessary consents, waivers, approvals, authorizations or orders required to be obtained and the making of all filings required to be made by any of the parties for the authorization, execution and delivery of the Merger Agreement and the con-

summation of the transactions contemplated thereby on or before (and remaining in effect at) the Effective Time;

(iv) there shall not have occurred or been threatened any material adverse change in the overall business or prospects of the Participating Partnerships or in the tax or other regulatory provisions applicable to the Participating Partnerships, or the Company, and the Company shall not have become aware of any facts that, in the sole judgment of the Company and General Partner, have or may have a material effect, whether adverse or otherwise, on the Participating Partnerships, taken as a whole, the Consolidation, or the value to the Company of the properties of the Participating Partnerships, taken as a whole;

(v) receipt, on or prior to the Closing Date, by the Company of an opinion from Counsel confirming that in all material respects, as of the Closing Date, the discussion set forth under "FEDERAL INCOME TAX CONSIDERATIONS," including any opinions expressed therein, is accurate and complete;

(vi) there having been no statute, rule, or regulation enacted or issued by the United States or any State, or by a court, which prohibits or challenges the consummation of the Consolidation;

(vii) there having been no declaration of suspension of trading in, or limitation on prices for, securities generally on the American Stock Exchange, declaration of a banking moratorium by federal or state authorities or any suspension of payments by banks in the United States (whether mandatory or not) or of the extension of credit by lending institutions in the United States, or commencement of war, armed hostility, or other international or national calamity directly or indirectly involving the United States, which war, hostility or calamity, in the sole judgment of the Company and the General Partner, would have a material adverse effect on the business objectives of the Company, or, in the case of any of the foregoing existing on the date of this Prospectus, any material acceleration or worsening thereof;

(viii) the Registration Statement having been declared effective and no stop order suspending the effectiveness of the Registration Statement having been issued or proceedings for such purpose having been instituted, and all necessary approvals under state securities or blue sky laws having been received; and

(ix) if more than 10% of the Investors of either of the Partnerships shall have elected to exercise dissenters' rights available under the California Partnership Act, the Company shall have the option not to consummate the Consolidation with such Partnership.

If any event shall occur or any matter shall be brought to the attention of the Company and the General Partner that, in their sole judgment, materially affects, whether adversely or otherwise, any of the Participating Partnerships or one or more of their properties, subject to the terms of the Merger Agreement, the Company and the General Partner reserve the right to modify or amend the terms of the Consolidation to take such event or matter into account, or to take such other actions as may be appropriate, including, without limitation, canceling the Consolidation. Any determination of the Company concerning the events and matters set forth above will be final and binding on all parties. All of the foregoing conditions, except for the conditions set forth in (i), (ii) and (viii), are for the sole benefit of the Company and the General Partner and may be waived by the Company and the General Partner in whole or in part. Certain of the conditions to the consummation of the Consolidation are beyond the control of the Company, the General Partner and the Partnerships; consequently, there can be no assurance that the Consolidation will occur.

EXCHANGE VALUE AND ALLOCATION OF SHARES

General. The Exchange Values were determined based on appraisals of the Partnerships' assets as of February 4, 1997 and cash and liabilities projections as of the Anticipated Consummation Date of July 1, 1997, and have been assigned to each of the Partnerships solely to establish a consistent method of allocating Shares for purposes of the Consolidation. The Exchange Values of the Partnerships do not indicate the aggregate price at which Shares may be sold after the Consolidation, nor does the number of Shares to be issued indicate the actual or potential trading price of the Company's Common Stock. See "RISK FACTORS." The number of Shares to be issued to each Participating Partnership upon consummation of the Consolidation will equal the Exchange Value of the Participating Partnership divided by $10, an arbitrary amount chosen for the sole purpose of determining the number of Shares of Common Stock to be issued to each Partnership. No fractional Shares will be issued by the Company with respect to the Consolidation. See "-- Conversion Ratio; No Fractional Shares." There has been no prior market for the Common Stock, and it is possible that the Common Stock will trade at a price substantially below the Exchange Value or the book value of the assets of the Company. There is no assurance that a market for the Company's Common Stock will develop as a result of the Consolidation.

The Exchange Value for each Partnership is an amount equal to the sum of (i) the appraised market value of its assets as of February 4, 1997,
(ii) the present value of rental income owed to the Partnership on a full payout finance lease for a DC-9 aircraft owned jointly by JetFleet I and JetFleet II and a second DC-9 owned 100% by JetFleet II (discounted at an annual interest rate of 10%) and (iii) projected cash and other assets as of July 1, 1997 (the anticipated date of consummation of the Consolidation), less
(x) projected total liabilities of each Partnership as of July 1, 1997. In determining the value of each asset held by the Partnership, the Appraiser used the "current market value approach." Current market value is based upon the value reflective of real market conditions at the time of the appraisal of an asset, and takes into account the status of the economy in which the equipment is used, the status of supply and demand for the particular item of equipment, the value of recent transactions and the opinions of informed buyers and sellers. The current market value approach assumes that there is no short term time constraint to buy or sell the asset. See "REPORTS, OPINIONS AND APPRAISALS."

As of the date of this Prospectus, the General Partner does not know of any material change in the financial performance of any of the Partnerships which will materially affect the Exchange Value.

Adjustments to Exchange Value and Allocation of Shares. All determinations of the Exchange Value for purposes of allocating the Shares among the Partnerships, other than the final computation of the expenses of the Consolidation, were determined in the manner described below. Each Partnership will operate and make distributions prior to the Closing Date such that, to the extent possible, its Exchange Value relative to the Exchange Value of the other parties to the Consolidation remains the same, excluding, for these purposes only, the estimated expenses of the Consolidation allocated to each of the Partnerships.

In the event it is discovered prior to the Effective Time that cash positions or anticipated liabilities differ from those used to calculate the Exchange Values as described below, an adjustment may be made to the Exchange Value of that Partnership. If the required adjustment is in excess of 5% of the Exchange Value for the Partnership, the Partnership's Exchange Value will be redetermined and its allocation of Shares changed and such adjustment shall be submitted for approval of the Investors of the affected Partnership who will be offered the opportunity to change their vote on the Consolidation. If such Investor does not timely indicate an objection to the adjustment, his or her vote will be counted as originally submitted. In the event the amount of the discovered liability is less than the foregoing amount, no adjustment to the Partnership's Exchange Value will be made.

The Exchange Value for each Partnership is an amount equal to the sum of (i) the appraised market value of its assets as of February 4, 1997, (ii) the present value of rental income owed to the Partnership on a full payout finance lease for a DC-9 aircraft owned jointly by JetFleet I and JetFleet II and a second DC-9 owned 100% by JetFleet II (discounted at an annual interest rate of 10%) and (iii) projected cash and other assets as of the Anticipated Consummation Date of July 1, 1997, less (x) projected total liabilities of each Partnership as of the Anticipated Consummation Date. The method of calculation is shown below. The General Partner reserves the right in its sole discretion, to make adjustments to the Exchange Value of a Partnership, when necessary to take into account the payment of cash to dissenting Investors of a Partnership.

                    Market Value     Discounted         Other          Total         Exchange      No of.
                    of Assets(1)     DC-9 Rent(2)      Assets(3)   Liabilities(4)      Value      Shares(5)
                    -------------    ------------      --------    --------------   -----------   ---------
JetFleet I          $   1,762,554     $ 144,543        $107,490        $651,080      $1,363,507     136,351
JetFleet II           $13,927,446      $622,178        $731,304      $1,994,932     $13,285,996   1,328,600

(2) JetFleet I and JetFleet II hold 50% and 50% interests, respectively, in a DC-9 aircraft, and JetFleet II holds a 100% interest in a second DC-9 aircraft, each on a full-payout finance lease to AeroCalifornia. The amount shown in this column represents the Partnership's portion of the present value of the rent payable to the Partnership, discounted at an annual rate of 10%. The 10% discount rate reflects the Company's assessment of the cost of funds which would be available to the Partnership for borrowing.

(3) Consists mainly of projected cash holdings and miscellaneous receivables.
(4) Consists primarily of deferred tax liabilities, accounts payable, accrued maintenance costs and security deposits and prepaid rents.
(5) Exchange Value divided by $10.

ALLOCATION OF SHARES BETWEEN CORPORATE GENERAL PARTNER AND LIMITED PARTNERS

The following table shows how the allocation of each Partnerships' shares between the Corporate General Partner and the Investors was calculated. The Corporate General Partner's allocation is based upon the percentage interest of the Corporate General Partner in the Partnership as set forth in the respective Partnership Agreements of the Partnerships.

                    Total Shares          Corporate           No. of Shares         No. of Shares
                   Allocated to       General Partners'    Issued to Corporate        Issued to
Partnership        Partnership(1)  Partnership Interest(2)   General Partner       Limited Partners
-----------        --------------  -----------------------   ---------------       -----------------
JetFleet I            136,351            1 .0%                      1,364                 134,987
JetFleet II         1,328,600            5 .0%(3)                  66,429               1,262,171

(1) The number of Shares to be issued to each Participating Partnership upon consummation of the Consolidation will equal the Exchange Value of the Participating Partnership (second to last column of the previous table entitled "Exchange Value and Allocation of Shares") divided by $10, an arbitrary amount chosen for the sole purpose of allocating Shares and which is not intended to imply that the Shares will trade at a price of $10 per Share.
(2) Represents the percentage interest of the Corporate General Partner in the Partnership's distributions, according to the applicable Partnership Agreement.
(3) In addition to its 5% interest in any distributions made by JetFleet II, the Corporate General Partner of JetFleet II is also entitled to a subordinated disposition fee equal to one-half of the industry standard commission ordinarily paid in such transactions, up to a maximum of 3% of the gross sales price of any assets disposed by JetFleet II. The Corporate General Partner will waive this fee in connection with the Consolidation.

Assuming 100% Partnership Participation, once the Consolidation is consummated the Corporate General Partner will hold 67,793 Shares or 4.2% of the total outstanding Shares and the Investors, as a group, will hold 1,397,158 Shares or 86.5% of the total outstanding Shares of the Company. The Individual General Partners will not receive any Shares in the Consolidation.

ACCOUNTING TREATMENT

In accordance with generally accepted accounting principles, the Consolidation will be accounted for as a reorganization of entities under common control at historical cost in a manner similar to a "pooling-of-interests." Under this accounting method, the assets and liabilities of the combining entities will be carried forward at their recorded historical book values. For a discussion of the accounting adjustments necessary to give effect to the Consolidation, see "PRO FORMA FINANCIAL INFORMATION" and "SELECTED FINANCIAL INFORMATION OF THE PARTNERSHIPS."

CONVERSION RATIO; NO FRACTIONAL SHARES

At the consummation of the Consolidation, each Participating Investor's Units will be automatically converted into the right to receive that number of Shares of Common Stock of the Company equal to the number of Units held by the Investor multiplied by the Conversion Ratio, rounded up to the nearest whole Share. The Conversion Ratio shall equal the quotient obtained by dividing (a) the number of Shares allocated to be issued to the Investors of the Partnership; by (b) the total number of Units of limited partnership outstanding for the Partnership.

The Company will not issue fractional Shares in connection with the Consolidation. The number of Shares issuable to an Investor will equal the number of Units held by the Investor multiplied by the Conversion Ratio, rounded up or down to the nearest whole share.

EFFECT OF THE CONSOLIDATION ON DISSENTING INVESTORS

An Investor of a Participating Partnership who dissents or abstains from voting with respect to the Consolidation will have statutory rights to elect to be paid the appraised value of his or her interest in the Partnership. See "DISSENTERS' RIGHTS," for a summary of statutory dissenters' appraisal rights available to Investors who do not vote in favor of the Consolidation.

EFFECTIVE TIME

The Effective Time of the Consolidation will be the time when the Certificate of Merger with respect to the merger of the Participating Partnerships are filed with the Secretary of State of Delaware, or at such later time as may be specified in the Certificate of Merger. It is anticipated that such filings will be made as promptly as practicable after the requisite approval of the Investors has been obtained and the other conditions to the Consolidation have been satisfied or waived, if permitted under the Merger Agreement, as the case may be. The General Partner intends that such approvals will be obtained on or about June 30, 1997.

CORPORATE HEADQUARTERS

The Company's principal place of business will be 1440 Chapin Avenue, Suite 310, Burlingame, California 94010.

                                           SOLICITATION/COMMUNICATION EXPENSES
Communication Expenses                             $         30,000
Other                                              $         20,000
         Sub Total                                                           $  50,000

                                                    TRANSACTION COSTS

Investment Banking Fee                             $         80,000
Legal Fees                                         $         50,000
Appraisals and Valuation                           $          3,000
Registration, Listing and Filing Fees              $         20,000
Financial Consulting Fees                          $         19,000
Accounting and Other Fees                          $         10,000
Printing                                           $         20,000
         Sub Total                                                           $ 202,000
                                                                             ---------

Total Costs                                                                  $ 252,000
                                                                             =========

RISK FACTORS

The Consolidation involves certain risks and other adverse factors which are discussed in detail in the Prospectus dated __________, 1997, which accompanies this Supplement. See "RISK FACTORS" in the Prospectus. Because all of the risks and adverse factors described in the Prospectus apply to the effect of the Consolidation on each of the Partnerships, Investors in JetFleet I should carefully review the section entitled "RISK FACTORS" therein. There are no material differences in the manner in which JetFleet I or any other Partnership will be affected by any of the risks or adverse factors discussed in such "RISK FACTORS" section.

JETFLEET I CONSIDERATIONS

JetFleet I currently owns approximately aircraft assets with an appraised value as of February 4, 1997, of $1.9 million, consisting of undivided interests in two Dash-7 aircraft and a 50% interest in a finance lease on a DC-9 aircraft. Each of these assets is already co-owned with JetFleet II. By combining with JetFleet II, which has aircraft assets with an appraised value of approximately $14.5 million, into the Company, Investors will become equity owners in a significantly larger business, with a broader and more diverse group of assets. In addition, the Shares of the Company will have potentially greater liquidity than the Units, as the Company has applied to list the Common Stock of the Company on the American Stock Exchange. The General Partner believes that the Consolidation will provide JetFleet I Investors with an opportunity to diversify their asset holdings while at the same time increasing the potential liquidity of their investment. THE GENERAL PARTNER STRONGLY RECOMMENDS THAT ALL INVESTORS VOTE "YES" IN FAVOR OF THE CONSOLIDATION.

DETERMINATION OF THE EXCHANGE VALUES AND ALLOCATION OF SHARES BETWEEN PARTNERSHIPS

The number of shares to be issued to JetFleet I Investors in the Consolidation will be based upon an exchange value assigned to JetFleet I. The Exchange Value was determined based on the value of aircraft asset held by JetFleet I, as determined by an independent appraisal as of February 4, 1997, and the projected cash, other asset and liability positions of JetFleet I as of July 1, 1997 (the anticipated date of consummation of the Consolidation). An Exchange Value was similarly determined for JetFleet II. The Exchange Values have been assigned solely to establish a consistent method of allocating Shares for purposes of the Consolidation. The Exchange Values of the Partnerships do not indicate the aggregate price at which Shares may be sold after the Consolidation, nor does the number of Shares to be issued indicate the trading price of the Common Stock. See "RISK FACTORS" in the Prospectus. The number of Shares to be issued to JetFleet I upon consummation of the Consolidation will equal the Exchange Value of the JetFleet I divided by $10, an arbitrary amount chosen for the sole purpose of determining the number of Shares of Common Stock to be issued to each Partnership. No fractional Shares will be issued by the Company with respect to the Consolidation.

The Exchange Value for JetFleet I is an amount equal to the sum of (i) the appraised market value of its aircraft assets as of February 4, 1997, (ii) the present value of rental income owed to the Partnership on a full payout finance lease for a DC-9 aircraft owned jointly by JetFleet I and

JetFleet II and (iii) projected cash and other assets as of the anticipated date of consummation of the Consolidation, July 1, 1997 (the "Anticipated Consummation Date"), less (iv) projected total liabilities of each Partnership as of the Anticipated Consummation Date.

             Market Value       Discounted        Other       Total            Exchange       No of.
                of Assets(1)    DC-9 Rent(2)      Assets(3)   Liabilities(4)     Value        Shares (5)
               ----------       ---------         ------      -----------        -----        -------
JetFleet I     $   1,762,554    $ 144,543        $107,490     $651,080         $1,363,507     136,351

(2) JetFleet I holds a 50% interests in a DC-9 aircraft, on a full-payout finance lease to AeroCalifornia. The other 50% interest is owned by JetFleet
II. The amount shown in this column represents the Partnership's portion of the present value of the rent payable to the Partnership, discounted at an annual rate of 10%, which reflects the Company's assessment of the cost of funds which would be available to the Partnership for borrowing.

(3) Consists mainly of projected cash holdings and miscellaneous receivables.
(4) Consists primarily of deferred tax liabilities, accounts payable, accrued maintenance costs and security deposits and prepaid rents.
(5) Exchange Value divided by $10.

If a material difference in any of the asset or liability positions of either Partnership used to calculate the Exchange Value of the Partnership as set forth above is discovered on or before the Effective Time of the Consolidation, the General Partner and such difference exceeds 5% of the Exchange Value, then the General Partner shall adjust the Exchange Value to take such difference into account. The General Partner may, in its sole discretion, adjust the Exchange Value of a Partnership to take into account the cash-out of dissenting Investors in that Partnership. Any adjustment in excess of 5% of the Partnership's Exchange Value will require the consent of the Participating Investors who will be notified and given a reasonable time period to revoke his or her approval of the Consolidation. If a Participating Investor fails to indicate a change of vote in the allotted time period, and his or her approval vote on the Consolidation will be unchanged.

                    Total Shares        No. of Shares            No. Of               Percent of Total
                   Allocated to            Issued          to         Shares Issued            Shares Issued
Partnership        Partnership(1) Corporate General Partner(2)to Ltd. Partners                  to Ltd. Partner
-----------        -------------- --------------------------  ----------------                  ----------------
JetFleet I            136,351                 1,364               134,987                   99.0%

(2) Represents the Corporate General Partner's 1% general partnership interest in JetFleet I, for which the Corporate General Partner paid $750 in cash at the organization of JetFleet I, according to the Partnership Agreement for JetFleet I and JetFleet II respectively.

CONVERSION RATIO

At the consummation of the Consolidation, each Participating Investor's limited partnership Units will be automatically converted into the right to receive that number of Shares of Common

Stock of the Company equal to the number of Units held by the Investor multiplied by the Conversion Ratio, rounded to the nearest whole Share. The Conversion Ratio shall equal the quotient obtained by dividing (a) the number of Shares allocated to be issued to the Investors of the Partnership; by (b) the total number of Units of limited partnership outstanding for the Partnership held by Participating Investors. The Conversion Ratio for JetFleet I shall be ____ Shares per Unit.

VOTING

Participation in the Consolidation by JetFleet I requires the approval of Investors holding a majority of the outstanding Units of JetFleet I. The Prospectus along with this Supplement constitutes the solicitation of the approval of the JetFleet I Investors to the Consolidation, including all such actions required by JetFleet I to consummate the Consolidation. Each Investor is being asked by the General Partner to consider the following elections with respect to the Consolidation:

"YES" I approve of my Partnership's participation in the Consolidation; or

"NO" I do not approve of my Partnership's participation in the Consolidation.

Investors may also abstain from voting. Upon completion of the enclosed Consent Card, an Investor should send it to the General Partner at ____________________________.

AN INVESTOR WHO RETURNS A CONSENT CARD WITHOUT INDICATING A VOTE, HOWEVER, WILL BE DEEMED TO HAVE VOTED "YES" IN FAVOR OF THE CONSOLIDATION AND RELATED PROPOSALS AND WILL RECEIVE SHARES OF COMMON STOCK OF THE COMPANY IF THE CONSOLIDATION IS CONSUMMATED BETWEEN THE COMPANY AND THE INVESTOR'S PARTNERSHIP.

An Investor of a Partnership who votes "YES" will receive Common Stock of the Company, if the majority of Investors in JetFleet I and JetFleet II approve the Consolidation and the Partnerships and the Company consummate the Consolidation. An Investor who abstains from voting or votes "NO" on the Consolidation will receive Shares of Common Stock if the majority of Investors in JetFleet I and JetFleet II approve the Consolidation and the Partnership and the Company consummate the Consolidation, unless he or she exercises dissenters' rights.See "Dissenters' Rights". If the majority of Investors of JetFleet I do not approve the Consolidation, the Consolidation between the Company and JetFleet I will not occur, and such Partnership will continue its existence in its current form. Notwithstanding the nonapproval of the Consolidation between JetFleet I and the Company, if the JetFleet II Investors approve the Consolidation, then the Company may consummate the Consolidation without JetFleet I. The Consolidation, however, will not be consummated between the Company and JetFleet I without the participation of JetFleet II.

Investors holding Units of the Partnerships as of May 1, 1997 (the "Record Date") have until June 30, 1997, 11:59 p.m. Pacific Standard Time, unless extended (the "Approval Date") to vote in favor of or against the consolidation. Investors may withdraw or revoke their consent at any time prior to the Approval Date. See "VOTING--Voting Procedures--Revocability of Consent."

AMENDMENTS TO PARTNERSHIP AGREEMENTS

The JetFleet I Partnership Agreement does not specifically address the merger of the Partnerships or the conversion of equity securities for Units. Therefore, the General Partner is requesting the consent of Investors to amend the Partnership Agreements to include specific provisions regarding the Consolidation. Because the JetFleet I Partnership Agreement also does

not address dissenters' rights, the amendments memorialize the dissenters' rights set forth in the Prospectus, which must be in compliance with the California Partnership Act. The amendments also provide for a uniform dissenters' rights procedures for both JetFleet I and JetFleet II Investors. By voting "YES" in favor of the Consolidation, an Investor will also have approved the proposed amendments to JetFleet I Partnership Agreement (the "Amendment") attached in the form of Appendix A hereto.

DISSENTERS' RIGHTS

Any JetFleet I Investor that does not vote "YES" on the Consolidation, will be entitled to exercise dissenters' or appraisal rights, if JetFleet I participates in the Consolidation and the Investor follows specific procedures set forth under the California Revised Limited Partnership Act ("California Partnership Act"). See "DISSENTERS' RIGHTS" in the Prospectus.

APPENDICES

Appendix A - Form of Partnership Amendment.

APPENDIX A
FORM OF PARTNERSHIP AMENDMENT

AMENDMENT TO
AMENDED AND RESTATED PARTNERSHIP AGREEMENT

This Amendment to Amended and Restated Partnership Agreement is entered into as of __________, 1997, by and among CMA Capital Group, Inc., a California corporation ("Managing General Partner"), Neal D. Crispin and Richard D. Koehler as individual general partners (the Managing General Partner and the individual general partners collectively, the "General Partners"), and CMA Capital Group, Inc, as attorney-in-fact for the limited partners listed on Appendix A, who constitute holders of a majority of the outstanding Units, to amend that certain Amended and Restated Partnership Agreement of JetFleet Aircraft, L.P. ("JetFleet I"), made and executed as of May 19, 1989 between the parties hereto (the "Partnership Agreement"). Capitalized terms not otherwise defined herein, shall have the meaning as set forth in the Partnership Agreement.

RECITALS

Pursuant to the Partnership Agreement, JetFleet I was organized under California law in May 1989.

The General Partner has proposed a consolidation (the "Consolidation") of JetFleet I and its affiliated partnership, JetFleet Aircraft II, L.P. ("JetFleet II") with and into a newly-formed successor Delaware corporation, AeroMax, Inc., pursuant to the terms and conditions of a certain Merger Agreement by and between AeroMax, JetFleet I and JetFleet II. The General Partner has solicited the requisite approval of the limited partners of JetFleet I to participate in the Consolidation as more fully described in that certain Prospectus/Consent Solicitation Statement, dated _____, 1997 (the "Prospectus"). As part of the approval, the limited partners approved amendments to the Partnership Agreement to enable the Consolidation.

NOW, THEREFORE, the parties hereto agree as follows:

1. Approval of the Consolidation. Upon receipt of the approval of holders of a majority of the outstanding Units of limited partnership interest of JetFleet I, the General Partner is authorized to executed, deliver and perform all obligations of the Partnership under the Merger Agreement and all other documents and agreements required to be delivered by the Partnership in connection therewith. Any inconsistent provisions of the Partnership Agreement are hereby amended to permit the Consolidation to be consummated.

2. Dissenters' Rights. Notwithstanding anything to the contrary contained in the Partnership Agreement, limited partners that did not vote in favor of the Consolidation and follow certain procedures set forth in the Prospectus shall have the dissenters' rights as set forth in the Prospectus, which dissenters' rights shall comply with the requirements of the California Partnership Act.

3. Termination of the Partnership. Upon the effectiveness of the Consolidation, the separate existence of the JetFleet I shall cease, and the limited partners of the Partnership shall have the right to receive Common Stock of AeroMax, Inc., all as set forth in the Prospectus.

IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the date first-above written:

LIMITED PARTNERS listed on
Appendix A

By: CMA Capital Group, Inc.
Attorney-in-fact

List of Approving Limited Partners                           No. of Units Held
----------------------------------                           -----------------





                                           Total Units:
                                                                  ==========

AEROCENTURY CORP.

SUPPLEMENT
TO
PROSPECTUS/CONSENT SOLICITATION STATEMENT
DATED ________________, 1997
FOR

JETFLEET AIRCRAFT II, L.P.

As described in detail in the Prospectus/Consent Solicitation Statement (this "Prospectus") which this Supplement accompanies, CMA Capital Group, L.P. (the "Corporate General Partner"), as corporate general partner, and Neal D. Crispin and Richard D. Koehler, Jr., as individual general partners (all three general partners collectively referred to herein as the "General Partner") of JetFleet Aircraft, L.P. ("JetFleet I") and JetFleet Aircraft II, L.P. ("JetFleet II") (collectively, the "Partnerships") are proposing a consolidation by merger (the "Consolidation") of JetFleet I and JetFleet II, with and into Aerocentury Corp., a newly organized Delaware corporation (the "Company"). Upon completion of the Consolidation, JetFleet II will have been merged with and into the Company and the limited partner investors ("Investors") of JetFleet II will receive Common Stock of the Company ("Common Stock"). The number of Shares issuable to each Partnership shall be calculated using an exchange value (the "Exchange Value") assigned to the Partnerships based primarily upon an independent appraisal of JetFleet II's assets. The Company has applied to have the Common Stock listed on the American Stock Exchange ("Amex"), subject to official notice of issuance.

The General Partner believes the Consolidation will give JetFleet II Investors the opportunity to own securities with potentially greater liquidity than the limited partnership interests ("Units"") held by Investors and to participate in a company with a greater ability to respond to the demand for equipment financing in the Partnerships' existing niche market, used turboprop aircraft leased by the regional air carriers than the Partnerships. Upon completion of the Consolidation, the Company will continue in the aircraft leasing business and will use debt and equity financing to acquire additional aircraft assets on lease.

A JetFleet II Investor who votes "YES" will receive Common Stock of the Company, if the majority of JetFleet II Investors approve the Consolidation and JetFleet II and the Company consummate the Consolidation. A "YES" vote will also constitute approval of certain amendments to the JetFleet II's Partnership Agreement necessary to effect the Consolidation on the terms set forth in the form of Amendment attached as Appendix A to this Supplement. An Investor who abstains from voting or votes "NO" will receive Shares of Common Stock if (i) the majority of JetFleet II Investors approve the Consolidation and (ii) all other conditions for the consummation of the Consolidation of JetFleet II and the Company are satisfied, unless he or she exercises dissenters' rights. See "DISSENTERS' RIGHTS".

If the JetFleet II Investors approve the Consolidation, but the Investors in JetFleet I do not approve the Consolidation, the Consolidation may be consummated between the Company and JetFleet II only. In determining whether to proceed with a Consolidation with JetFleet II only, the Company will determine whether the number of dissenting Investors, the number of Participating Investors and the asset base of JetFleet II alone will provide a sufficient basis for the Company to meet its objectives and satisfy all the conditions for the Consolidation set forth in the Merger

Agreement. If, however, a majority of JetFleet II Investors do not approve the Consolidation, the Consolidation will not be consummated, regardless of the approval or non-approval of the Consolidation by JetFleet I Investors. JetFleet II Investors will not be able to condition their approval of the Consolidation on the participation of JetFleet I.

This Supplement has been prepared to highlight for the Investors in JetFleet the effects and fairness of the Consolidation with respect to their Units and to provide information on the Partnership. A supplement has also been prepared for JetFleet I and will be provided promptly without charge to each JetFleet II Investor upon written request by such Existing Investor or by his or her representative who has been so designated in writing. All such requests should be directed to CMA Capital Group, Inc., General Partner, 1440 Chapin Ave., Suite 310, Burlingame, California 94010.

Capitalized terms not defined herein shall have the meaning set forth in the Prospectus/Consent Solicitation Statement.

RISK FACTORS

The Consolidation involves certain risks and other adverse factors which are discussed in detail in the Prospectus dated __________, 1997, which accompanies this Supplement. See "RISK FACTORS" in the Prospectus. Because all of the risks and adverse factors described in the Prospectus apply to the effect of the Consolidation on each of the Partnerships, Investors in JetFleet I should carefully review the section entitled "RISK FACTORS" therein. Except as set forth herein, there are no material differences in the manner in which JetFleet II or JetFleet I will be effected by any of the risks or adverse factors discussed in such "RISK FACTORS" section.

JETFLEET II CONSIDERATIONS

JetFleet II currently owns approximately aircraft assets with an appraised value as of February 4, 1997, of $14.5 million. Of those assets, undivided interests in aircraft assets with an approximate appraised value of $4.1 are co-owned with JetFleet I, including two Dash-7 Aircraft. By combining with JetFleet I, which has aircraft assets with an appraised value of approximately $1.9 million (consisting entirely of assets co-owned with JetFleet II), into the Company, Investors will become equity owners in a slightly larger business, which will have total control and ownership over all of its assets. In addition, the Shares of the Company will have potentially greater liquidity than the Units, as the Company has applied to list the Common Stock of the Company on the American Stock Exchange. The General Partner believes that the Consolidation will provide JetFleet II investors with an opportunity to diversify and gain total control of its asset holdings while at the same time increasing the potential liquidity of their investment in the aircraft industry. THE GENERAL PARTNER STRONGLY RECOMMENDS THAT ALL INVESTORS VOTE "YES" IN FAVOR OF THE CONSOLIDATION.

PRO FORMA FINANCIAL STATEMENTS FOR A JETFLEET II - ONLY CONSOLIDATION

The General Partner believes that the Consolidation would still benefit JetFleet II Investors and be fair to JetFleet II and its Investors even if JetFleet I does not participate. Attached as Appendix B to this Supplement are Pro-forma financial statements showing the effect of a combination of JetFleet II and the Company only.

DETERMINATION OF THE EXCHANGE VALUES AND ALLOCATION OF SHARES BETWEEN PARTNERSHIPS

The number of shares to be issued to JetFleet II Investors in the Consolidation will be based upon an exchange value assigned to JetFleet II. The Exchange Value was determined based on the value of aircraft asset held by JetFleet II, as determined by an independent appraisal as of February 4, 1997, and the projected cash, other asset and liability positions of JetFleet II as of July 1, 1997 (the anticipated date of consummation of the Consolidation). An Exchange Value was similarly determined for JetFleet II. The Exchange Values have been assigned solely to establish a consistent method of allocating Shares for purposes of the Consolidation. The Exchange Values of the Partnerships do not indicate the aggregate price at which Shares may be sold after the Consolidation, nor does the number of Shares to be issued indicate the trading price of the Common Stock. See "RISK FACTORS" in the Prospectus. The number of Shares to be issued to JetFleet II upon consummation of the Consolidation will equal the Exchange Value of the JetFleet II divided by $10, an arbitrary amount chosen for the sole purpose of determining the number of Shares of Common Stock to be issued to each Partnership. No fractional Shares will be issued by the Company with respect to the Consolidation.

The Exchange Value for JetFleet II is an amount equal to the sum of
(i) the appraised market value of its aircraft assets as of February 4, 1997,
(ii) the present value of rental income owed to the Partnership on a full payout finance lease for two DC-9 aircraft, one owned jointly by JetFleet I and JetFleet II and one owned entirely by JetFleet I and (iii) projected cash and other assets as of the anticipated date of consummation of the Consolidation, July 1, 1997 (the "Anticipated Consummation Date"), less (iv) projected total liabilities of each Partnership as of the Anticipated Consummation Date.

             Market Value       Discounted        Other       Total            Exchange       No of.
                of Assets(1)    DC-9 Rent(2)      Assets(3)   Liabilities(4)     Value        Shares (5)
             ------------       ---------         ------      -----------        -----        -------
JetFleet II   $13,927,446       $622,178         $731,304     $1,994,932       $13,285,996    1,328,600

(2) JetFleet II holds one DC-9 aircraft and a 50% interests in another DC-9 aircraft, on a full-payout finance lease to AeroCalifornia. The other 50% interest in the second aircraft is owned by JetFleet II. The amount shown in this column represents the Partnership's portion of the present value of the rent payable to the Partnership, discounted at an annual rate of 10%. The 10% discount rate reflects the Company's assessment of the cost of funds which would be available to the Partnership for borrowing.

(3) Consists mainly of projected cash holdings and miscellaneous receivables.
(4) Consists primarily of deferred tax liabilities, accounts payable, accrued maintenance costs and security deposits and prepaid rents.
(5) Exchange Value divided by $10.

If a material difference in any of the asset or liability positions of either Partnership used to calculate the Exchange Value of the Partnership as set forth above is discovered on or before the Effective Time of the Consolidation, the General Partner and such difference exceeds 5% of the Exchange Value, then the General Partner shall adjust the Exchange Value to take such difference into account. The General Partner may, in its sole discretion, adjust the Exchange Value of a Partnership to take into account the cash-out of dissenting Investors in that Partnership. Any adjustment in excess of 5% of the Partnership's Exchange Value will require the consent of the Participating Investors who will be notified and given a reasonable time period to revoke his or her

approval of the Consolidation. If a Participating Investor fails to indicate a change of vote in the allotted time period, and his or her approval vote on the Consolidation will be unchanged.

                    Total Shares        No. Of Shares            No. Of              Percent of Total
                   Allocated to           Issued to          Shares Issued            Shares Issued
Partnership        Partnership(1) Corporate General Partner(2)to Ltd. Partners       to Ltd. Partner
-----------        -------------- --------------------------  ----------------       ----------------
JetFleet II         1,328,600                66,429             1,262,171                   95.0%

Represents the Corporate General Partner's 5% general partnership interest in JetFleet I, for which the Corporate General Partner paid $750 in cash at the organization of JetFleet II, according to the Partnership Agreement for JetFleet II respectively. In addition to its 5% interest in any distributions made by JetFleet II, the Corporate General Partner of JetFleet II is also entitled to a subordinated disposition fee equal to one half of the industry standard commission ordinarily paid in such transactions, up to a maximum of 3% of the gross sales price of any assets disposed by JetFleet II. The Corporate General Partner will waive this fee in connection with the Consolidation.

CONVERSION RATIO

At the consummation of the Consolidation, each Participating Investor's limited partnership Units will be automatically converted into the right to receive that number of Shares of Common Stock of the Company equal to the number of Units held by the Investor multiplied by the Conversion Ratio, rounded to the nearest whole Share. The Conversion Ratio shall equal the quotient obtained by dividing (a) the number of Shares allocated to be issued to the Investors of the Partnership; by (b) the total number of Units of limited partnership outstanding for the Partnership held by Participating Investors. Assuming 100% participation for all Investors in the Consolidation, the Conversion Ratio for JetFleet II shall be ____ Shares per Unit.

VOTING

Participation in the Consolidation by JetFleet II requires the approval of Investors holding a majority of the outstanding Units of JetFleet
II. The Prospectus along with this Supplement constitutes the solicitation of the approval of the JetFleet II Investors to the Consolidation, including all such actions required by JetFleet I to consummate the Consolidation. Each Investor is being asked by the General Partner to consider the following elections with respect to the Consolidation:

"YES" I approve of my Partnership's participation in the Consolidation; or

"NO" I do not approve of my Partnership's participation in the Consolidation.

Investors may also abstain from voting. Upon completion of the enclosed Consent Card, an Investor should send it to the General Partner at ____________________________.

AN INVESTOR WHO RETURNS A CONSENT CARD WITHOUT INDICATING A VOTE, HOWEVER, WILL BE DEEMED TO HAVE VOTED "YES" IN FAVOR OF THE CONSOLIDATION AND RELATED PROPOSALS AND WILL RECEIVE SHARES OF COMMON STOCK OF THE COMPANY IF THE CONSOLIDATION IS CONSUMMATED BETWEEN THE COMPANY AND THE INVESTOR'S PARTNERSHIP.

An Investor of a Partnership who votes "YES" will receive Common Stock of the Company, if the majority of Investors in JetFleet I and JetFleet II approve the Consolidation and the Partnerships and the Company consummate the Consolidation. An Investor who abstains from voting or votes "NO" on the Consolidation will receive Shares of Common Stock if the majority of Investors in JetFleet I and JetFleet II approve the Consolidation and the Partnership and the Company consummate the Consolidation, unless he or she exercises dissenters' rights. If the majority of Investors of JetFleet II do not approve the Consolidation, the Consolidation between the Company and JetFleet II will not occur, and JetFleet II will continue its existence in its current form. Notwithstanding the nonapproval of the Consolidation between JetFleet I and the Company, if the JetFleet II Investors approve the Consolidation, then the Company may consummate the Consolidation without JetFleet I. The Consolidation, however, will not be consummated between the Company and JetFleet I without the participation of JetFleet II.

AMENDMENTS TO PARTNERSHIP AGREEMENT

The JetFleet II Partnership Agreement does not specifically address the merger of the Partnerships or the conversion of equity securities for Units. Therefore, the General Partner is requesting the consent of Investors to amend the Partnership Agreements to include specific provisions regarding the Consolidation. The amendments also provide for a uniform dissenters' rights procedures for both JetFleet I and JetFleet II Investors. By voting "YES" in favor of the Consolidation, an Investor will also have approved the proposed amendments to JetFleet II Partnership Agreement (the "Amendment") attached in the form of Appendix A hereto.

The Amendment changes certain amendments to the Partnership Agreement made by the General Partner in 1993 in response to certain blue sky regulatory requirements ("Rollup Provisions"). The Amendment amends the rollup provisions of the Partnership Agreement to make their dissenters' rights provisions consistent with the statutory dissenters' rights provisions under the California Partnership Act (to which JetFleet I investors will be subject). The Partnership Agreement provides that any person who votes "NO" on the Consolidation is entitled to dissenters' rights. To make the dissenters' rights provisions consistent with California law, dissenters' rights will be available to any Investor that does not vote "YES" on the Consolidation.

DISSENTERS' RIGHTS

Any JetFleet II Investor that does not vote "YES" on the Consolidation, will be entitled to exercise dissenters' or appraisal rights, if JetFleet II participates in the Consolidation and the Investor follows specific procedures set forth under the California Revised Limited Partnership Act ("California Partnership Act"). See "DISSENTERS' RIGHTS" in the Prospectus" and "Amendment to Partnership Agreement," above.

APPENDICES

Appendix A -- Form of Partnership Amendment

Appendix B -- Pro Forma Financial Information

APPENDIX A
FORM OF PARTNERSHIP AMENDMENT

AMENDMENT TO
LIMITED PARTNERSHIP AGREEMENT

This Amendment to Limited Partnership Agreement is entered into as of __________, 1997, by and among CMA Capital Group, Inc., a California corporation ("Managing General Partner"), Neal D. Crispin and Richard D. Koehler as individual general partners (the Managing General Partner and the individual general partners collectively, the "General Partners"), and CMA Capital Group, Inc, as attorney-in-fact for the limited partners listed on Appendix A, who constitute holders of a majority of the outstanding Units, to amend that certain Amended and Restated Partnership Agreement of JetFleet Aircraft II, L.P. ("JetFleet II"), made and executed as of June 21, 1991, between the parties hereto (the "Partnership Agreement"). Capitalized terms not otherwise defined herein, shall have the meaning as set forth in the Partnership Agreement.

RECITALS

Pursuant to the Partnership Agreement, JetFleet I was organized under California law in May 1989.

The General Partner has proposed a consolidation (the "Consolidation") of JetFleet II and its affiliated partnership, JetFleet Aircraft, L.P. ("JetFleet I") with and into a newly-formed successor Delaware corporation, AeroMax, Inc., pursuant to the terms and conditions of a certain Merger Agreement by and between AeroMax, JetFleet I and JetFleet II. The General Partner has solicited the requisite approval of the limited partners of JetFleet I to participate in the Consolidation as more fully described in that certain Prospectus/Consent Solicitation Statement, dated _____, 1997 (the "Prospectus"). As part of the approval, the limited partners approved amendments to the Partnership Agreement to enable the Consolidation.

NOW, THEREFORE, the parties hereto agree as follows:

1. Approval of the Consolidation. Upon receipt of the approval of holders of a majority of the outstanding Units of limited partnership interest of JetFleet II, the General Partner is authorized to executed, deliver and perform all obligations of the Partnership under the Merger Agreement and all other documents and agreements required to be delivered by the Partnership in connection therewith. Any inconsistent provisions of the Partnership Agreement are hereby amended to permit the Consolidation to be consummated.

2. Dissenters' Rights. Notwithstanding anything to the contrary contained in the Partnership Agreement, limited partners that did not vote in favor of the Consolidation and follow certain procedures set forth in the Prospectus shall have the dissenters' rights as set forth in the Prospectus, which dissenters' rights shall comply with the requirements of the California Partnership Act. Section 13.9 of the Partnership Agreement is hereby deleted in its entirety.

3. Waiver of Resale Fee. General Partner hereby waives the fee set forth in 5.6(f)ith respect to the Consolidation transactions.

4. Termination of the Partnership. Upon the effectiveness of the Consolidation, the separate existence of the JetFleet II shall cease, and the limited partners of the Partnership shall have the right to receive Common Stock of AeroMax, Inc., all as set forth in the Prospectus.

IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the date first-above written:

CMA CAPITAL GROUP, INC.                          -------------------------------
                                                 Neal D. Crispin
By:
   -------------------------------------         -------------------------------
   Richard D. Koehler                            Richard D. Koehler

LIMITED PARTNERS listed on
Appendix A

By: CMA Capital Group, Inc.
Attorney-in-fact

List of Approving Limited Partners                           No. of Units Held
----------------------------------                           -----------------





                                           Total Units:
                                           ------------      -----------------

APPENDIX B
PRO FORMA FINANCIAL INFORMATION

                                                      AEROCENTURY      JETFLEET
                                                         CORP.     AIRCRAFT II, L.P.  ADJUSTMENTS                PRO FORMA
                                                      -----------  -----------------  ------------              -----------
ASSETS

Current assets:
 Cash                                                  $140,000       $1,191,900      $                         $
 Lease payments receivable                                               540,000
 Other assets                                                            229,800
                                                       --------      -----------      ------------              -----------
   Total current assets                                 140,000        1,761,700
Aircraft and aircraft engines
 under/held for operating leases, net                                 14,435,600
Lease payments receivable                                                180,000
Organization costs, net                                  10,000           32,900           (32,900)(a)               10,000
                                                       --------      -----------      ------------              -----------
                                                       $150,000      $16,410,200      $    (32,900)             $16,527,300
                                                       ========      ===========      ============              ===========
LIABILITIES AND PARTNERS' CAPITAL/
 SHAREHOLDERS' EQUITY

Current liabilities:
 Accounts payable                                      $  2,800      $   112,500      $    250,000 (b)          $   365,300
 Deferred taxes                                                                          1,200,000 (c)            1,200,000
 Accrued maintenance costs                                               501,100                                    501,100
 Security deposits                                                       143,100                                    143,100
 Prepaid rents                                                            27,600                                     27,600
 Unearned interest income                                                 79,200                                     79,200
 Other accrued liabilities                                                10,900                                     10,900
                                                       --------      -----------      ------------              -----------
   Total current liabilities                              2,800          874,400         1,450,000                2,327,200
Unearned interest income                                                   8,800                                      8,800
                                                       --------      -----------      ------------              -----------
 Total liabilities                                        2,800          883,200         1,450,000                2,336,000
                                                       --------      -----------      ------------              -----------
Partners' capital/Shareholders' equity
 Partners' capital                                                    15,527,000       (15,527,000)(d)
 Common stock                                           150,000                         13,391,000 (d)           13,541,000
 Paid-in capital:                                                                        2,136,000 (d)              653,100
                                                                                           (32,900)(a)
                                                                                        (1,450,000)(b,c)
 Accumulated deficit                                     (2,800)                                                     (2,800)
                                                       --------      -----------      ------------              -----------
 Total partners'capital/shareholders' equity            147,200       15,527,000        (1,482,900)              14,191,300
                                                       --------      -----------      ------------              -----------
                                                       $150,000      $16,410,200      $    (32,900)             $16,527,300
                                                       ========      ===========      ============              ===========

See accompanying notes.

                                            AEROCENTURY       JETFLEET
                                               CORP.      AIRCRAFT II, L.P.   ADJUSTMENTS            PRO FORMA
                                            -----------   -----------------   ------------           ----------
Revenues:
 Rental income                              $                $2,658,500       $                      $2,628,500
 Other income                                                   394,300                                 394,300
                                            ----------       ----------       ------------           ----------
                                                     0        3,052,800                               3,052,800

Costs and expenses:
 Management fees                                                113,700            314,700 (aa)         428,400
 Depreciation                                                 3,260,000         (2,690,500)(bb)         569,500
 Professional fees and general
   and administrative                                           384,500           (266,400)(aa)         118,100
 Maintenance                                                    119,300                                 119,300
 Amortization                                    2,000           31,900            (31,900)(cc)           2,000
                                            ----------       ----------       ------------           ----------
                                                 2,000        3,909,400         (2,674,100)           1,237,300
                                            ----------       ----------       ------------           ----------
Income before taxes and consolidation costs     (2,000)        (856,600)         2,674,100            1,815,500
Provision for income taxes                         800                             726,200 (dd)         727,000
                                            ----------       ----------       ------------           ----------
Income before consolidation costs               (2,800)        (856,600)         1,947,900            1,088,500
Consolidation costs                                                                294,000 (ee)         297,000
                                            ----------       ----------       ------------           ----------
Net income                                  $   (2,800)      $ (856,600)      $  1,650,900           $  791,500
                                            ==========       ==========       ============           ==========
Earnings per share
 Net income                                                                                          $     0.63
 Number of common shares
   outstanding                                                                                        1,262,171
 Ratio of earnings to fixed charges                                                                         (*)

(*) AeroCentury Corp. has no fixed charges.

See accompanying notes.

AeroCentury Corp.
Notes to Unaudited Pro Forma Financial Statements

1. Basis of presentation

AeroCentury Corp. ("AeroCentury"), a Delaware corporation, was formed on February 28, 1997. JetFleet Management Corp. ("JMC"), a California corporation formed in 1994, owns all of AeroCentury's 150,000 shares of common stock. CMA Capital Group (the "General Partner") is proposing a consolidation by merger (the "Consolidation") of JetFleet Aircraft, L.P. ("JetFleet I") and JetFleet Aircraft II, L.P. ("JetFleet II") with and into AeroCentury. JetFleet I and JetFleet II are each California limited partnerships formed in 1989 and 1991, respectively, to invest in leased aircraft equipment. Upon completion of the Consolidation, the Company will continue in the aircraft leasing business and intends to use leveraged financing to acquire additional aircraft assets on lease.

The unaudited pro forma balance sheet and statement of operations have been prepared on the basis that only JetFleet II participates in the Consolidation. Upon Consolidation, the General Partner and the limited partners (collectively, the "Partners") will receive stock in AeroCentury in return for their partnership interests in JetFleet II. The Consolidation will be accounted for as a pooling of interests and, therefore, no adjustment to the historical carrying amount of assets and liabilities will be made. Historical information for AeroCentury and JetFleet II are based on audited financial statements which are included elsewhere herein. JetFleet II participation results in 1,328,601 additional shares of common stock being issued to the Partners. Warrants to purchase 35,000 shares of common stock at $3.00 per share will be issued to Crispin Koehler Securities in consideration for investment banking services rendered in connection with the Consolidation.

The unaudited pro forma balance sheet as of December 31, 1996 has been prepared as if the transactions contemplated by the Consolidation had occurred on December 31, 1996, and the accompanying unaudited pro forma statement of operations has been prepared as if the Consolidation had occurred on January 1, 1996.

The unaudited pro forma financial statements have been prepared by making certain adjustments (as explained in Note 2 below) to the historical financial information of JetFleet II. The pro forma information presented is not necessarily indicative of the result that would have occurred had the Consolidation occurred and AeroCentury operated as a single entity during the period presented, or of the future operations of the Partnership.

2. Pro forma adjustments

The pro forma balance sheet includes the following adjustments:

(a) Elimination of unamortized organization costs at December 31, 1996.

(b) Offering costs, estimated to be $250,000, have been charged directly to 1996 operations. It is anticipated that the offering costs will be short-term payables, paid from cash on hand at the time of the Consolidation.

(c) A deferred tax liability has been recognized for the difference of $3 million between the book value of the assets and liabilities of JetFleet II at December 31, 1996 and the tax basis due to accelerated depreciation used for tax purposes.

(d) Reflects the issuance of common stock of AeroCentury in exchange for the Partners' interests in JetFleet II as well as the estimated cost of $245,000 of issuing warrants to purchase 35,000 shares of common stock at $3 per share.

The pro forma statement of operations includes the following adjustments:

(aa) Upon Consolidation, AeroCentury will sign a management agreement with JMC under which JMC will manage AeroCentury's assets. Under this agreement, AeroCentury will pay JMC monthly in arrears 3% per annum of the net asset value of the assets under management. Such fees have been increased to reflect the terms of this agreement. Professional fees and general and administrative have been decreased to reflect anticipated savings.

(bb) JetFleet II computed depreciation using the straight-line method over the aircraft's estimated economic life, eight years for the deHavilland DHC-7 aircraft (the "Dash-7's") and twelve years for all other aircraft, to a zero residual value. In contemplation of the Consolidation, AeroCentury obtained a future appraisal of its aircraft assets (Exhibit 99.01) which demonstrated that the current method of depreciation was ultra conservative and that the aircraft market had changed recently, increasing the future value and estimated useful life of used aircraft equipment. In addition, the lessee has recently spent an aggregate of $3.1 million on three of the Dash-7's for an inspection and repair as necessary program ("IRAN") not mandated under the leases. The IRAN program has enhanced both the life and value of these aircraft. Accordingly, AeroCentury intends to depreciate each asset on a straight-line basis over its estimated useful life, generally twelve years, to its estimated residual value at that time. Assuming the Consolidation is effective mid-1997, under this method, annual depreciation on the existing assets would approximate $400,000.

(cc) Amortization of JetFleet II organization costs has been eliminated.

(dd) Corporate taxes at the estimated federal and state combined rate of 40% have been provided.

(ee) Offering costs of the Consolidation, estimated to be $250,000, have been expensed. In addition, $245,000 in estimated costs of issuing warrants to purchase 35,000 shares of common stock (see Note 1 above) has been expensed. AeroCentury intends to amortize these costs over fifteen years for tax purposes and a tax benefit of $297,000 has been reflected.

3. Calculation of number of common shares outstanding

The number of shares outstanding for the year ended December 31, 1996 used in computing pro forma net income is based on the number of shares and warrants which would be outstanding as a result of the Consolidation assuming JetFleet II acceptance on January 1, 1996.

AeroCentury Corp.
Management's Discussion and Analysis of Pro Forma Financial Condition and Results of Operations

The pro forma financial statements contained herein assume that the Consolidation takes place with only JetFleet II participation.

Pro forma adjustments reflect the cost of a management contract with JMC (which is partially offset by anticipated savings for professional fees and general and administrative costs) and an adjustment in depreciation expense to reflect individual asset straight-line depreciation to estimated residual value over estimated useful life. (See Notes to Unaudited Pro Forma Financial Statements.)

Pro Forma Results of Operations

The Company reported pro forma earnings per share of $0.75 per share. Rental income from assets under operating leases accounted for 88% of revenues, with interest income from full financing leases comprising 12% of revenues.

The Company's single largest expense is depreciation of its aircraft assets. The Company will pay management fees pursuant to a newly entered contract with JMC at the rate of 3% per annum of the net asset value of the assets under management. The cost of the Consolidation approximates $250,000 in offering costs and $245,000 in estimated expenses associated with the issuance of 35,000 of warrants. Taxes of approximately $756,600 reflect an effective tax rate of 40% on earnings as if the Company were in existence as of January 1, 1996.

See Management's Discussion and Analysis of Financial Condition and Results of Operations of AeroCentury, JetFleet I, and JetFleet II elsewhere herein.

Pro Forma Liquidity and Financial Condition

At December 31, 1996, cash totalled $1,331,900 before payment of offering costs approximating $250,000.

See Management's Discussion and Analysis of Financial Condition and Results of Operations of AeroCentury and JetFleet II elsewhere herein.