Weatherly Aircraft Company

Company Report
8/22/2005

Weatherly Aircraft Company
(Pink Sheets: WACF / Bid $0.30 - Ask $1.00)

This report as well as updates concerning WACF can be viewed at www.turnaroundpicks.com

Weatherly Aircraft Company (Pink Sheets: WACF / bid $0.30 - ask $1.00) manufactures and sells leading cost-efficient, safe, and reliable agricultural aircraft (cropdusters) for seeding, fertilizing, protective applications, and for fire fighting.   The company's mission is to become the leading supplier of agricultural aircraft in the worldwide market within the next 5 years.

WHY YOU SHOULD CONSIDER WACF:

• Currently WACF has 9.968 MM shares outstanding and closed 8-19-05 at $1.00 giving it a current market cap of $9.97 MM.
  
• The company is positioned for accelerated growth .   With a well-defined market and a vast majority of operational agricultural aircraft needing replacement , the opportunity for new sales is now.
  
• The current agricultural aircraft replacement market within the Unites States is estimated to be $1. 5 Billion .
  
• Management has a clearly defined strategy for market penetration .   Its business plan provides an exceptional look within the organization and its vision in a document that is extremely well thought out. The business model targets revenues of $60+ million with net margins of approximately 15% in 5 years.
  
• The company has been in existence since 1961 and has well-established relationships with suppliers and channels of distribution .   The business was acquired in September 2000 by Gary Beck, Weatherly Aircraft major shareholder and CEO.
  
• Weatherly is trading on the Pink Sheets and has audited financials for its fiscal year ending September 30, 2004.   With appropriate capital and traction, the Company intends to file for registration (SB-2) and become an OTCBB traded stock.
  
• The Company's aircraft models are based on Weatherly's proprietary FAA-issued "Type Certificates" authorizing specific aircraft designs and production processes that can only be manufactured by Weatherly .

Limited Competition & Significant Barriers to Entry:

• 1 of only 3 active U.S. companies licensed by the FAA to build agricultural aircraft.
  
• The only 1 of the 3 positioned to fulfill the large pent-up demand from the installed base of 18-20 year old obsolete and out-of-production aircraft in the mainstream market. (The other 2 companies build larger and more expensive aircraft for higher-end niche market applications.)
  
• 3 former major suppliers (Cessna, AgCat, and Piper) which account for the large installed base of out-of-production aircraft, dropped out of the market due to changes in liability legislation and competitive design that made the business less attractive to their overall corporate strategies.
  
• Benefits from a significant market barrier to entry - typically $8 million and 3 years to receive FAA approval for design and manufacturing process, plus a number of years to penetrate the market.

Strong Reputation:

• Brand recognition and reputation in tact with more than 250 Weatherly aircraft operating in the U.S. and a dozen foreign countries.
  
• Recognized leader for reliability and aircraft safety rating, evidenced by few FAA Airworthiness Directives since 1961.
  
• Highest profit-generating aircraft for small-grain agricultural operators - Weatherly demonstrates improved profitability for Operators flying a new Weatherly versus flying other new or used agricultural aircraft in the mainstream market.

Weatherly Aircraft Company (Pink Sheets: WACF)

Financial Projections

(1) Fiscal Year ending September 30
(2) Calendar year projected based on securing appropriate working capital

Weatherly Aircraft Company is a manufacturer of agricultural aircraft for U.S. ["Part 137"] agricultural operators and foreign equivalent operators.

Agricultural aircraft (cropdusters) are used by "Ag Operators" to spray chemical fertilizers, herbicides, insecticides, and defoliants for farmers.   In addition they are used for fighting fires.

Weatherly manufactures two models of single engine agricultural aircraft - one with a radial engine (the 620-B), and one with a turbine engine (the 620-BTG).   Price points are $245,000 and $390,000, respectively.   Each is available configured with a 310 or a 355-gallon payload hopper.   The radial-engine model is available with an electronic fuel injection option.  

All agricultural aircraft flying in the U.S., the design, manufacturing process, components and component manufacturing processes must be certified by the Federal Aviation Administration (FAA).   Under Federal Aviation Administration (FAA) certification and oversight, the company fabricates and assembles new agricultural aircraft. The company utilizes engines and numerous other components purchased from industry suppliers in the finished product.

Since 1961, the Company has produced agricultural aircraft that are widely acknowledged by operators, and the industry at large, as the best-in-class aeronautical design.   More than 250 Weatherly aircraft are estimated to be operating in the U.S. and a dozen foreign countries.   Weatherly is recognized as a reputable producer of safe, reliable, cost efficient, and good-value agricultural aircraft - evidenced by few FAA Airworthiness Directives ("ADs)" which are FAA public notices regarding potential problems with an aircraft.

Weatherly's business strategy is to aggressively increase sales and market share of its existing aircraft models in markets where Weatherly's brand recognition is already established.   The company will then expand into new geographic markets as management and financial resources become available.   No additional development of product, process, team or marketing is necessary to execute this strategy.   Marketing assets are established and deployed in the Company's target markets.   Current product configuration is state-of-the-art and competitive.

Weatherly Aircraft Company's marketing strategy is to sell "profitability" to the agricultural operator. Profitability to an Operator is his seasonal revenues less capital and operating costs. Weatherly, in this sense, is the optimal aircraft and the "low-cost producer" for small-grain operators.

In support of the marketing strategy, Weatherly Aircraft Company has developed a customer lease-financing program that greatly increases the competitiveness of the aircraft and greatly reduces the business risks from an operator cost point of view.   The Company has executed a Memorandum of Understanding with American Leasing, Inc. to provide North and South America Weatherly Aircraft customers with competitive lease financing.   American Leasing, Inc. believes that it can provide 3-7 year lease financing, up to 80-95% of the aircraft invoice value.   American Leasing, Inc. has committed to provide up to $1,000,000 lease financing per month for Weatherly aircraft sales.

The Markets

The target market is well defined. There are over 6,000 agricultural aircraft in the U.S. and Canada operated by roughly 3,900 ag aircraft operators.

The fleet of agricultural aircraft in the replacement market primarily concentrated across North, South and Central America, Australia and Africa numbers approximately 10,000.   The mainstream replacement market represents about 8,000 agricultural aircraft.

Within that fleet, Weatherly's initial target market is the 6,000+ obsolete, inefficient, and out-of-production aircraft consisting primarily of out-of-production Cessnas, Pipers and AgCats, as well as other aircraft that are inefficient at servicing grain crop applications.

Weatherly replacement target market in the U.S. alone represents about a $1.5+ billion market opportunity.

World wide economic trends favor the rationalization and replacement of less productive agricultural tools with more cost-effective and more profit-producing agricultural tools and technology, creating new demand.

The agricultural aircraft market exhibits cycles.   In the 1970's, the four major players then (Cessna, Piper, AgCat and Thrush) each had periods when they were selling over 200 planes per year. The market high point was in 1974 when over 1,200 agricultural aircraft were sold. The 45-year annual average for US agricultural aircraft sales is 300+ aircraft.

Weatherly provides the appropriate economic solution for the target market and is uniquely positioned strategically to exploit these conditions.

The market is well known and identifiable:

• Buyers are typically the agricultural operators who provide services to farmers for seeding, fertilizing, and insect/weed protection.
  
• About half of the Operators own more than one aircraft and those same operators own 80% of the agricultural fleet.

The events of 9/11 and economic uncertainty in recent years significantly impacted and delayed the production and sales of agricultural aircraft, further increasing the pent-up replacement market demand in North and South America.   Additionally, there is new market demand in developing countries.

Through it all, the Company has remained a viable brand in the market and a viable production business. Aircraft parts production has provided the continuity through all of the turbulence. Weatherly aircraft continue to be known for their safety and attractive price in relation to performance.

The original Weatherly Aviation Company, Inc. was founded in 1961 by John Weatherly and his nephew, Hal Weatherly, both aeronautical engineers and highly regarded in the industry. Weatherly Aviation Company, Inc. has designed and maintained several agricultural aircraft designs certified by the FAA.  

From 1981 the company was owned and managed by Hal Weatherly at a company facility in Lincoln, California.   The business was acquired from the predecessor company in September 2000 by Gary Beck, Weatherly Aircraft major shareholder and CEO, who has reorganized the Company for increased aircraft production and growth with profitability. The events of 9/11 crippled the American aviation markets and set off a chain of economic disturbances that have not completely recovered today.   The company retrenched by refocusing its marketing strategy on South America and re-capitalizing during 2002.

In January 2003 Weatherly again began production with new capital and new marketing programs in South America that quickly produced sales orders in Argentina and Brazil. However, by mid-2003 the lease financing company failed and Weatherly was unable to fill the sales orders and reach breakeven.     Recent restructuring, including a combination of debt and equity, has enabled the continuation of production.   The Company is fully equipped and able to produce aircraft, as is, and sell aircraft in all countries within the market plan. No additional product development, process development, or market development are needed.  

In June 2005 the NASD approved the Company's Form 15c2-11 application by a broker/dealer for approval to initiate trading. Trading commenced on June 13, 2005 under the trading symbol WACF on the OTC-Pink Sheets market.

Contact Information

Gary Beck, President and CEO
Weatherly Aircraft Company
5000 Bailey Loop
McClellan, California 95652

916-640-0120 or 310-326-7001

Website:    www.weatherlyaircraft.com
Email:        fly@weatherlyaircraft.com
Investor Relations:     ir@weatherlyaircraft.com                    

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This publication is an advertisement on behalf of the issuing Company mentioned in this advertisement and may not be construed as investment advice. This advertisement does not provide an analysis of the Company's complete financial position and is not a solicitation to purchase or sell securities. This publication may contain forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Such statements are based on management's current expectations and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the Company's Marketing materials and filing documents. Readers should consult with their own independent tax, business and financial advisors with respect to any investment, including any contemplated investment in the advertised Company. All information contained in this advertisement should be independently verified with the advertised Company and an independent securities analyst. TurnAroundPicks.com, its affiliates, officers, directors, subsidiaries and agents (collectively, the "publisher" of this advertisement) have been compensated 30,000 shares of Weatherly Aircraft common stock restricted under rule 144 for their services. The Publisher may offer, sell or purchase shares of Weatherly Aircraft common stock without notice and may also seek to enter into additional transactions with either the Company or its shareholders during the period that this publication is available to the public. In preparing this advertisement, the Publisher has relied upon information received from the Company, although believed to be reliable, cannot be guaranteed. This advertisement is not an endorsement of the Company by the Publisher. The Publisher is not responsible for any claims made by the Company. Investing in low priced securities, such as those of the Company mentioned in this report, is not suitable for everyone. You should independently investigate and fully understand all risks.