<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB



[ X ]             QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                          THE SECURITIES EXCHANGE ACT OF 1934
                     For the quarterly period ended March 31, 1999

                                          OR

[   ]            TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                          THE SECURITIES EXCHANGE ACT OF 1934
                          For the transition period from          to          .
                                                         ---------   ---------


                         Commission File Number 0-16886


                                SEMELE GROUP INC.
                                -----------------
                 (Name of Small Business Issuer in its charter)



           Delaware                                      36-3465422
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
incorporation or organization)



ONE CANTERBURY GREEN, STAMFORD, CONNECTICUT                                06901
(Address of principal executive offices)                              (Zip Code)



Issuer's telephone number, including area code :  (203) 363-0849



Check whether the Issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the Issuer was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. YES X . NO .


Shares of common stock outstanding as of May 14, 1999:  1,156,540

Transitional Small Business Disclosure Format:  YES   .  NO X .



<PAGE>

PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

                                                 SEMELE GROUP INC.
                                            CONSOLIDATED BALANCE SHEETS

                                       MARCH 31, 1999 AND DECEMBER 31, 1998
                                                    (UNAUDITED)
<TABLE>
<CAPTION>
                                                                                        March 31,          December 31,
                                                                                           1999                1998
                                                                                           ----                ----
<S>                                                                            <C>                  <C>             
ASSETS
Cash and Cash Equivalents..........................................            $      7,038,453     $      7,788,124
Rents Receivable...................................................                      61,456               91,038
Accounts Receivable - Affiliate....................................                      12,855                6,652
Interest Receivable - Affiliates...................................                     202,672              125,382
Note Receivable - Affiliates.......................................                   2,725,695            2,725,695
Foreclosed Real Estate Held for Sale, Net..........................                   9,961,991            9,961,991
Investment in Partnerships and Trusts..............................                   3,787,886            3,884,755
Land                                                                                  1,929,000            1,929,000
Building, net of accumulated depreciation of $909,660 and $820,478
 at March 31, 1999 and December 31, 1998, respectively.............                  11,023,337           11,112,519
Other Assets.......................................................                     618,415              543,763
                                                                               ----------------     ----------------

Total Assets.......................................................            $     37,361,760     $     38,168,919
                                                                               ----------------     ----------------
                                                                               ----------------     ----------------

LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Notes Payable - Affiliates.........................................            $     14,869,500     $     14,869,500
Notes Payable......................................................                   6,889,236            7,011,202
Accrued Interest - Affiliates......................................                     108,974              243,833
Accrued Interest...................................................                      60,574               67,659
Accrued Expenses - Affiliates......................................                     110,108               71,118
Accounts Payable and Accrued Expenses..............................                     753,891              853,189
Distributions Payable..............................................                      49,938               48,875
Minority Interest..................................................                   3,740,737            3,722,131
                                                                               ----------------     ----------------

Total Liabilities..................................................                  26,582,958           26,887,507
                                                                               ----------------     ----------------

Stockholders' Equity
Shares of Common Stock, $0.01 Par Value,
  5,000,000 Authorized, 2,080,185 Shares Issued...................                  170,663,365          170,663,365
Accumulated Deficit................................................                (143,675,588)        (143,172,978)
Deferred Compensation, 73,148 and 56,883 Shares at
  March 31, 1999 and December 31, 1998, respectively...............                  (1,243,509)            (967,004)
Treasury Stock at Cost, 929,060 and 945,325 Shares at
  March 31, 1999 and December 31, 1998, respectively...............                 (14,965,466)         (15,241,971)
                                                                               ----------------     ----------------

Total  Stockholders' Equity........................................                  10,778,802           11,281,412
                                                                               ----------------     ----------------

Total Liabilities and Stockholders' Equity........................             $     37,361,760     $     38,168,919
                                                                               ----------------     ----------------
                                                                               ----------------     ----------------
Book Value Per Share of Common Stock
  (1,151,125 and 1,134,860 Shares Outstanding at
  March 31, 1999 and December 31, 1998, respectively)..............            $           9.36     $           9.94
                                                                               ----------------     ----------------
                                                                               ----------------     ----------------
</TABLE>

              The accompanying notes are an integral part of these
                       consolidated financial statements

                                     2
<PAGE>
                                SEMELE GROUP INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS

               FOR THE THREE MONTHS ENDED MARCH 31, 1999 AND 1998
                                   (UNAUDITED)
<TABLE>
<CAPTION>
                                                                                         1999                 1998
                                                                                         ----                 ----
<S>                                                                                       <C>                 <C>   
INCOME
Income From Lending and Investing Activities:
  Interest on Loans Receivable.........................................         $             --     $        23,596
  Income on Investments ...............................................                   77,377              98,628
                                                                                ----------------     ---------------

Total Income From Lending and Investing Activities.....................                   77,377             122,224
                                                                                ----------------     ---------------

Other Income:
  Lease Revenue........................................................                  291,473                  --
  Interest on Note Receivable - Affiliates.............................                   77,290                  --
  Gain on Sale of Equipment ...........................................                    5,325                  --
  Other Income ........................................................                   12,196                  --
                                                                                ----------------     ---------------

Total Other Income.....................................................                  386,284                  --
                                                                                ----------------     ---------------

Total Income ..........................................................                  463,661             122,224
                                                                                ----------------     ---------------


EXPENSES
Expenses From Property Operating Activities:
  Net Loss From Operations of Foreclosed Real Estate Held for Sale.....                   38,942             264,916
                                                                                ----------------     ---------------

Total Expenses From Property Operating Activities......................                   38,942             264,916
                                                                                ----------------     ---------------

Other Expenses:
  Stockholder Expenses ................................................                   14,486              15,254
  Directors' Fees, Expenses, and Insurance ............................                   46,149              52,453
  Other Professional Fees .............................................                  120,501              22,298
  General and Administrative ..........................................                  113,979              71,240
  Administrative Reimbursement - Affiliate ............................                   38,990              38,454
  Interest Expense - Affiliates .......................................                  291,849             110,488
  Depreciation and Amortization Expense ...............................                  135,629                  --
  Interest Expense ....................................................                  137,122                  --
  Recovery of Losses on Loans, Notes and Interest Receivable ..........                       --            (108,176)
                                                                                ----------------     ---------------

Total Other Expenses ..................................................                  898,705             202,011
                                                                                ----------------     ---------------

Total Expenses ........................................................                  937,647             466,927
                                                                                ----------------     ---------------


Net Loss ..............................................................         $       (473,986)    $      (344,703)
                                                                                ----------------     ---------------
                                                                                ----------------     ---------------
Net Loss Per Share of Common Stock Basic
  (Based on the Weighted Average Number of Shares
  Outstanding of 1,140,351 and 1,211,527, respectively)................         $          (0.42)    $         (0.28)
                                                                                ----------------     ---------------
                                                                                ----------------     ---------------
</TABLE>

              The accompanying notes are an integral part of these
                       consolidated financial statements

                                      3
<PAGE>

                                SEMELE GROUP INC.
                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

                    FOR THE THREE MONTHS ENDED MARCH 31, 1999
                                   (UNAUDITED)



<TABLE>
<CAPTION>
                                                         COMMON STOCK              ACCUMULATED           DEFERRED     
                                                 SHARES              AMOUNT           DEFICIT         COMPENSATION    
                                                 ------              ------           -------         ------------    
<S>                                            <C>             <C>             <C>                  <C>               
Stockholder's Equity,
  December 31, 1998 ....................       2,080,185       $  170,663,365  $  (143,172,978)     $      (967,004)  

Deferred Compensation
  16,265 Shares of Stock................              --                   --              --             (276,505)   

Distributions Declared By Subsidiary....              --                   --          (28,624)                  --   

Net Loss................................              --                   --         (473,986)                  --   
                                         ---------------      --------------- ----------------     ----------------   

Stockholder's Equity,
  March 31, 1999........................       2,080,185       $  170,663,365  $  (143,675,588)     $    (1,243,509)  
                                         ---------------      --------------- ----------------     ----------------   
                                         ---------------      --------------- ----------------     ----------------   
</TABLE>

<TABLE>
<CAPTION>
                                                 TREASURY                                
                                                    STOCK                 TOTAL          
                                                    -----                 -----          
                                                                                         
<S>                                         <C>                  <C>                     
Stockholder's Equity,                                                                    
  December 31, 1998 ....................    $  (15,241,971)      $    11,281,412         
                                                                                         
Deferred Compensation                                                                    
  16,265 Shares of Stock................           276,505                   --          
                                                                                         
Distributions Declared By Subsidiary....                --               (28,624)        
                                                                                         
Net Loss................................                --              (473,986)        
                                           ---------------      ----------------         
                                                                                         
Stockholder's Equity,                                                                    
  March 31, 1999........................    $  (14,965,466)      $    10,778,802         
                                           ---------------      ----------------         
                                           ---------------      ----------------         
</TABLE>

              The accompanying notes are an integral part of these
                       consolidated financial statements

                                       4
<PAGE>

                                SEMELE GROUP INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

               FOR THE THREE MONTHS ENDED MARCH 31, 1999 AND 1998
                                   (UNAUDITED)



<TABLE>
<CAPTION>
                                                                                                1999                  1998
                                                                                                ----                  ----
<S>                                                                                     <C>                   <C>            
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss.......................................................................         $     (473,986)       $     (344,703)
Adjustments to Reconcile Net Loss to Net Cash Used In Operating Activities:
  Depreciation and Amortization Expense........................................                135,629                    --
  Minority Interest............................................................                 18,606                    --

Net Change In:
  Interest Receivable on Loans.................................................                     --                (6,336)
  Rents Receivable.............................................................                 29,582                    --
  Accounts Receivable - Affiliate..............................................                 (6,203)                   --
  Interest Receivable - Affiliate..............................................                (77,290)                   --
  Investment in Partnerships and Trusts........................................                 96,869                    --
  Other Assets.................................................................               (121,099)             (103,733)
  Accrued Interest - Affiliates................................................               (134,859)                   --
  Accrued Interest.............................................................                 (7,085)                   --
  Accrued Expenses - Affiliates................................................                 38,990               (10,712)
  Accounts Payable and Accrued Expenses........................................                (99,298)              212,452
                                                                                       ---------------       ---------------

Net Cash Used In Operating Activities..........................................               (600,144)             (253,032)
                                                                                       ---------------       ---------------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Principal Payments on Notes Payable..........................................               (121,966)                   --
  Distributions Paid By Subsidiary.............................................                (27,561)                   --
                                                                                       ---------------       ---------------

Net Cash Used In Financing Activities..........................................               (149,527)                   --
                                                                                       ---------------       ---------------

Net Decrease in Cash and Cash Equivalents......................................               (749,671)             (253,032)

Cash and Cash Equivalents at Beginning of Period...............................              7,788,124             7,884,593
                                                                                       ---------------       ---------------

Cash and Cash Equivalents at End of Period.....................................         $    7,038,453        $    7,631,561
                                                                                       ---------------       ---------------
                                                                                       ---------------       ---------------

Supplemental disclosure of cash flow information:
  Cash paid during the period for interest.....................................         $      570,915        $      110,488
                                                                                       ---------------       ---------------
                                                                                       ---------------       ---------------
</TABLE>


              The accompanying notes are an integral part of these
                       consolidated financial statements

                                       5
<PAGE>

                                SEMELE GROUP INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 1999

                                   (UNAUDITED)

     Readers of this quarterly report should refer to the audited consolidated
financial statements of Semele Group Inc. (the "Company"), formerly known as
Banyan Strategic Land Fund II, for the year ended December 31, 1998, which are
included in the Company's 1998 Annual Report on Form 10-KSB, as certain footnote
disclosures which would substantially duplicate those contained in such audited
statements have been omitted from this report.

     In the opinion of management, all adjustments (consisting of normal and
recurring adjustments) considered necessary to present fairly the financial
position at March 31, 1999 and December 31, 1998 and results of operations for
the three month periods ended March 31, 1999 and 1998 have been made and are
reflected.


1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     PRINCIPLES OF CONSOLIDATION

     The accompanying consolidated financial statements include the accounts of
the Company and its wholly-owned subsidiaries and consolidated ventures which
hold title to the Company's property. In August 1998, the Company acquired
Ariston Corporation ("Ariston"), the results of which are consolidated in the
Company's financial statements. All intercompany balances and transactions have
been eliminated in consolidation.

     The Company's investment in partnerships and trusts represents limited
partner or beneficiary interests and is accounted for using the cost method.

     CASH EQUIVALENTS

     At March 31, 1999, the Company had $6,121,000 invested in federal agency
discount notes and reverse repurchase agreements secured by U.S. Treasury Bills
or interests in U.S. Government securities.

     RECLASSIFICATION

     Certain 1998 balances have been reclassified to conform to the 1999
presentation.


2.   OTHER ASSETS

     Other assets principally include equipment on operating lease and deferred
financing costs, both of which pertain to Ariston. The deferred financing costs
are being amortized over the life of the loan to which they pertain and
equipment on operating leases is being depreciated using the straight-line
method over the equipment's remaining estimated useful life. Rental income and
interest expense associated with equipment on operating leases are recognized as
earned and incurred, respectively. At March 31, 1999, future minimum rents due
in connection with equipment on operating leases was as follows:

<TABLE>
<S>                                                  <C>        
           For the year ending March 31, 2000        $   138,816
                                         2001             68,673
                                                     -----------
                                        Total        $   207,489
                                                     -----------
                                                     -----------
</TABLE>

     In addition, the Company, through its consolidation of Ariston, has an
interest in future rental income from two commercial buildings that are leased
to an investment-grade educational institution. Future minimum lease payments
pertaining to these contracts are as follows:


                                       6
<PAGE>

                                SEMELE GROUP INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                   (CONTINUED)



<TABLE>
<S>                                              <C>        
           For the year ending March 31, 2000        $   984,996
                                         2001          1,038,832
                                         2002          1,146,504
                                         2003            884,336
                                                     -----------
                                        Total        $ 4,054,668
                                                     -----------
                                                     -----------
</TABLE>

3.   NOTES PAYABLE

     Through its acquisition of Ariston, the Company acquired a limited
partnership interest in a real estate investment program and assumed related
indebtedness. The note bears a fluctuating interest rate based on Prime plus a
margin and requires quarterly payments of principal and interest. The note
matures on January 15, 2003 and is secured by the associated limited partnership
interest. Repayment of the debt is partially guaranteed by Messrs. Engle and
Coyne. In connection with the acquisition of Ariston, the Company has
consolidated certain additional indebtedness pertaining to a commercial property
leased to an investment-grade educational institution. The interest rate on this
debt is fixed at 7.86%.

     Additionally, the Company assumed non-recourse debt, consisting of
installment notes that are collateralized by certain equipment held on operating
leases. The installment notes will be repaid fully by non-cancelable rents
generated by the associated lease agreements. At March 31, 1999, the interest
rate on these obligations was 7.1%.

     The annual maturities of all notes payable are as follows:

<TABLE>
<S>                                              <C>        
           For the year ending March 31, 2000        $   393,170
                                         2001            462,781
                                         2002            558,038
                                         2003            772,284
                                         2004            432,201
                                   Thereafter          4,270,762
                                                     -----------
                                        Total        $ 6,889,236
                                                     -----------
                                                     -----------
</TABLE>

     The notes payable balance sheet value approximates fair value at March 31,
1999.


4.   FORECLOSED REAL ESTATE HELD FOR SALE

     Rancho Malibu is a 274-acre parcel of undeveloped land north of Malibu,
California ("Project"). On July 1, 1992, a joint venture (the "Venture") between
the Company and Legend Properties, Inc. (f/k/a Banyan Mortgage Investment Fund)
("Legend") acquired title to the property pursuant to a deed in lieu of
foreclosure agreement. The Company owns a 98.6% general partner interest in the
Venture while Legend holds the remaining 1.4% interest as a limited partner. The
Venture's results are consolidated in the accompanying financial statements.

     Since 1992, the Venture has been engaged in zoning and entitlement
activities that have been opposed by the City of Malibu and various citizen
groups. The city and a neighboring homeowners association initiated several
legal actions intended to preclude the development of the property, all of which
were ultimately resolved in favor of the Venture or settled during 1998. The
Venture currently is entitled to develop a 46 unit housing community on
approximately 40 acres of the property. The remaining 234 acres will be
allocated as follows: (i) 167 acres will be dedicated to a public agency, (ii)
approximately 47 acres will be deed restricted within privately owned lots and
(iii) approximately 20 acres will be preserved as private open space.


                                       7
<PAGE>

     During the three months ended March 31, 1999, the Venture incurred
approximately $39,000 in costs in connection with Rancho Malibu. These costs,
treated as capital contributions to the Venture by the Company, were included in
total expenses from property operating activities on the Company's consolidated
statements of operations. At March 31, 1999, the Company's carrying balance for
the property is $9,961,991.


5.   TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES

     ACQUISITION OF ARISTON CORPORATION

     The Company purchased all of the common stock of Ariston from Equis
Financial Group Limited Partnership ("EFG") for cash of $2 million and a
purchase-money note of $10,450,000 (the "Note") on September 1, 1998. The total
fair value of the assets acquired was estimated to be $12,450,000. The Ariston
acquisition was accounted for under the purchase method of accounting and the
balance sheet and statement of operations of Ariston were consolidated effective
September 1, 1998. The Note bears interest at the annualized rate of 7%, payable
quarterly in arrears, and requires principal reductions based upon the cash
flows generated by Ariston. The Note matures on August 31, 2003 and is recourse
only to the common stock of Ariston. The cost of the Ariston acquisition was
allocated on the basis of the estimated fair value of the assets acquired and
liabilities assumed. In October 1998, Ariston declared and paid a cash
distribution of $2,020,000 to the Company. Until the Note is retired, future
cash distributions by Ariston require the consent of EFG.

     INDEBTEDNESS

     The Company obtained a loan of $4,419,500 from certain affiliates in 1997.
The loan bears interest at an annualized rate of 10% and provides for mandatory
principal reductions, if and to the extent the Company realizes any net cash
proceeds from the sale or refinancing of the Rancho Malibu property.
Notwithstanding the foregoing, the loan is scheduled to mature in full on April
30, 2000. During each of the three month periods ended March 31, 1999 and 1998,
the Company incurred interest expense of $108,974 and $110,488, respectively, in
connection with this indebtedness. At March 31, 1999, the carrying value of the
note approximates its estimated fair value.

     ADMINISTRATIVE SERVICES

     The Company's administrative functions are performed by an affiliate, EFG,
pursuant to an Administrative Services Agreement between the Company and EFG
dated May 7, 1997. EFG is reimbursed at actual cost for expenses it incurs on
the Company's behalf. Administrative expenses consist primarily of professional
and clerical salaries and certain rental expenses. The Company incurred total
administrative costs of $38,990 and $38,454 during each of the three month
periods ended March 31, 1999 and 1998, respectively.


6    DEFERRED COMPENSATION

     The Company established an incentive compensation plan (the "Plan") for
certain executives (the "Participants"). The Plan provides for all or some of
the Participants' salary to be deferred. All such deferred compensation is held
subject to the claims of creditors of the Company in a "rabbi" trust until paid
to the Participants following the Participants' termination of employment. The
amounts deferred are invested in common stock of the Company. Pursuant to the
Plan, the Participants deferred $60,000 of compensation during both the three
months ended March 31, 1999 and 1998 which represented 16,265 and 9,413 shares
of common stock, respectively. The deferred amounts were expensed by the Company
during 1999 and 1998 and are included in general and administrative expenses on
the consolidated statements of operations for the three months ended March 31,
1999 and 1998.


                                       8
<PAGE>

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION OR PLAN OF
OPERATION


GENERAL

     Certain statements in this quarterly report that are not historical fact
constitute "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. Without limiting the foregoing, words
such as "anticipates", "expects", "intends", "plans" and similar expressions are
intended to identify forward-looking statements. These statements are subject to
a number of risks and uncertainties including the Company's ability to
successfully implement a growth-oriented business plan. Actual results could
differ materially from those projected in any forward-looking statements.

     The Company, formerly known as Banyan Strategic Land Fund II, currently
holds an ownership interest in a 274 acre land parcel located in Southern
California known as the Rancho Malibu property. The Company also holds a 0.3%
beneficial interest in a liquidating trust, established for the benefit of a
group of unsecured creditors of a previous borrower of the Company. In August
1998, the Company acquired Ariston Corporation ("Ariston"), a holding company
having two investments: (i) a 99% limited partnership interest in AFG Eireann
Limited Partnership, a Massachusetts limited partnership having a tax interest
in a diversified pool of lease contracts owned by an institutional investor and
(ii) a 98% limited partnership interest in Old North Capital Limited
Partnership, a Massachusetts limited partnership with investments in cash and
notes, equipment leases, and limited partnerships that are engaged in either
equipment leasing or real estate. The latter includes two commercial buildings,
one located in Washington D.C. and one in Sydney, Australia that are leased to
an investment-grade educational institution.

YEAR 2000 ISSUE

     The Year 2000 Issue generally refers to the capacity of computer
programming logic to correctly identify the calendar year. Many companies
utilize computer programs or hardware with date sensitive software or embedded
chips that could interpret dates ending in "00" as the year 1900 rather than the
year 2000. In certain cases, such errors could result in system failures or
miscalculations that disrupt the operations of the affected businesses. The
Company uses information systems provided by EFG and has no information systems
of its own. EFG has adopted a plan to address the Year 2000 Issue that consists
of four phases: assessment, remediation, testing, and implementation and has
elected to utilize principally internal resources to perform all phases. EFG has
completed substantially all of its Year 2000 project at an aggregate cost of
less than $50,000 and at a di minimus cost to the Company. All costs incurred in
connection with EFG's Year 2000 project have been expensed as incurred.

     EFG's primary information software was coded by IBM at the point of
original design to use a four digit field to identify calendar year. All of the
Company's lease billings, cash receipts and equipment remarketing processes are
performed using this proprietary software. In addition, EFG has gathered
information about the Year 2000 readiness of significant vendors and third party
servicers and continues to monitor developments in this area. All of EFG's
peripheral computer technologies, such as its network operating system and
third-party software applications, including payroll and electronic banking,
have been evaluated for potential programming changes and have required only
minor modifications to function properly with respect to dates in the year 2000
and thereafter. EFG understands that each of its and the Company's significant
vendors and third-party servicers are in the process, or have completed the
process, of making their systems Year 2000 compliant. Substantially all parties
queried indicated that their systems would be Year 2000 compliant by the end of
1998.

     Presently, EFG is not aware of any outside customer with a Year 2000 Issue
that would have a material effect on the Company's results of operations,
liquidity, or financial position. The Company's equipment leases were structured
as triple net leases, meaning that the lessees are responsible for, among other
things, (i) maintaining and servicing all equipment during the lease term, 
(ii) ensuring that all equipment functions properly and is returned in good 
condition, normal wear and tear excepted, and (iii) insuring the assets against
casualty and other events of loss. Non-compliance with lease terms on the part
of a lessee, including failure to address Year 2000 Issues, could result in lost
revenues and impairment of residual values of the Company's equipment assets
under a worst-case scenario.

     EFG believes that its Year 2000 compliance plan will be effective in
resolving all material Year 2000 risks in a timely manner and that the Year 2000
Issue will not pose significant operational problems with respect to its
computer systems or result in a system failure or disruption of its or the
Company's business operations. However, EFG has no means of ensuring that all
customers, vendors and third-party servicers will conform ultimately to Year
2000 standards. The effect of this risk to the Company is not determinable.


                                       9
<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

     During recent years, the Company's operating activities have been limited
to the disposal of certain real estate assets and efforts to secure the
entitlements necessary to develop the Company's Rancho Malibu property. The
latter was accomplished successfully at the end of 1998. The Company's cash and
cash equivalents balance declined from $7,788,124 at December 31, 1998 to
$7,038,453 at March 31, 1999 principally as a result of paying various accrued
expenses pertaining to the Rancho Malibu property and interest expense incurred
in connection with the acquisition of Ariston.

     During the three months ended March 31, 1999, the Company used $121,966 of
cash to repay certain debt obligations assumed in connection with the Ariston
acquisition and $27,561 to pay cash distributions. The latter represents
customary distributions paid to third-parties from a real estate investment in
which Ariston has an ownership interest.

     The Company's principal future liquidity needs will be dependent upon,
among other things, development plans for the Rancho Malibu property, which
remain pending. In addition, the Company will continue to incur to expenses for
professional services and other operating costs. The Company will realize future
cash inflows as a result of the Ariston acquisition, which will be used to
service associated acquisition indebtedness.


RESULTS OF OPERATIONS

     Total gross income for the three months ended March 31, 1999 increased to
$463,661 from $122,224 for the same period in 1998. The increase in total gross
income from 1998 to 1999 resulted principally from the acquisition of Ariston
and includes (i) rental income from property and equipment on operating leases
and (ii) interest income from a note receivable from affiliates. Interest income
on note receivable from affiliates is subordinate to the affiliate's repayment
of certain institutional indebtedness. Ariston's operating results are
consolidated in the Company's financial statements.

     Total gross expenses for the three months ended March 31, 1999 increased to
$937,647 from $466,927 for the same period in 1998. The increase of $470,720 was
caused mostly by the acquisition of Ariston which includes (i) interest expense
of $182,875 related to a purchase money note to EFG, (ii) depreciation and
amortization expense related to equipment on operating leases and deferred
financing costs, and (iii) interest expense incurred in connection with
equipment on operating leases. Increases in other professional fees and general
and administrative expenses further contributed to the overall increase in total
gross expenses during the first quarter of 1999 compared to the same period in
1998. Expenses during the first quarter of 1998 reflect a credit of $108,176,
reflecting a recovery of amounts previously charged to losses on loans, notes
and interest receivable. The decrease in property operating expenses resulted
from the settlement of the Rancho Malibu litigation in 1998.

     The above discussed changes resulted in an increase in the net loss for the
three months ended March 31, 1999 to $473,986 ($0.42 per share) from $344,703
($0.28 per share) for the same period in 1998. The net loss per share for the
three months ended March 31, 1999 is based on the weighted average number of
shares outstanding during the period of 1,140,351 as compared to 1,211,527 for
the same period in 1998.

      On a quarterly basis, management reviews the investment properties held by
the Company and, when it has been determined that a permanent impairment in the
value of a given property has occurred, the carrying value of the property is
then written down to its fair market value. Management has determined that no
reductions are necessary for the three months ended March 31, 1999.


                                       10
<PAGE>

PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

None.

<TABLE>
<CAPTION>
ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K
-------  --------------------------------
<S>        <C>
(a)           A list of exhibits filed or incorporated by reference is as
              follows:

3.1           Certificate of Amendment to Amended and Restated Certificate of
              Incorporation (filed with the Securities and Exchange Commission
              as Exhibit (3.1) to the Registrant's Quarterly Report on Form
              10-QSB for the quarter ended June 30, 1998 and incorporated by
              reference)

3.2           Restated Certificate of Incorporation (filed with the Securities
              and Exchange Commission as Exhibit (3)(i) to the Registrant's
              Report on Form 8-K dated October 21, 1997 and incorporated by
              reference)

3.3           Amended and Restated By-Laws (filed with the Securities and
              Exchange Commission as Exhibit (3)(ii) to the Registrant's Report
              on Form 8-K dated October 21, 1997 and incorporated by reference)

4             Form of new stock certificate (filed with the Securities and
              Exchange Commission as Exhibit (4) to the Registrant's Quarterly
              Report on Form 10-QSB for the quarter ended September 30, 1997 and
              incorporated by reference)

10.1          Executive Employment Agreement for Gary D. Engle (filed with the
              Securities and Exchange Commission as Exhibit 10.1 to the
              Registrant's Annual Report on Form 10-KSB for the year ended
              December 31, 1997 and incorporated by reference)

10.2          Executive Employment Agreement for James A. Coyne (filed with the
              Securities and Exchange Commission as Exhibit 10.2 to the
              Registrant's Annual Report on Form 10-KSB for the year ended
              December 31, 1997 and incorporated by reference)

10.3          Amended 1994 Executive and Director Stock Option Plan (filed with
              the Securities and Exchange Commission as Exhibit 10.3 to the
              Registrant's Annual Report on Form 10-KSB for the year ended
              December 31, 1997 and incorporated by reference)

10.4          Incentive Compensation Plan (filed with the Securities and
              Exchange Commission as Exhibit 10.4 to the Registrant's Annual
              Report on Form 10-KSB for the year ended December 31, 1997 and
              incorporated by reference)

10.5          Trust under Semele Group Inc. Incentive Compensation Plan (filed
              with the Securities and Exchange Commission as Exhibit 10.5 to the
              Registrant's Annual Report on Form 10-KSB for the year ended
              December 31, 1997 and incorporated by reference)

10.6          Qualified Stock Option Agreement Executive Option Grant Program
              dated December 30, 1997 between Semele Group Inc. and Gary D.
              Engle (filed with the Securities and Exchange Commission as
              Exhibit 10.6 to the Registrant's Annual Report on Form 10-KSB for
              the year ended December 31, 1997 and incorporated by reference)

10.7          Qualified Stock Option Agreement Executive Option Grant Program
              dated December 30, 1997 between Semele Group Inc. and James A.
              Coyne (filed with the Securities and Exchange Commission as
              Exhibit 10.7 to the Registrant's Annual Report on Form 10-KSB for
              the year ended December 31, 1997 and incorporated by reference)

10.8          Director Stock Option Agreement Director Option Grant Program
              (filed with the Securities and Exchange Commission as Exhibit 10.8
              to the Registrant's Annual Report on Form 10-KSB for the year
              ended December 31, 1997 and incorporated by reference)
</TABLE>


                                       11
<PAGE>


<TABLE>
<S>         <C>
10.9          Amendment to Director Stock Option Agreement Director Option Grant
              Program dated December 30, 1997 between Semele Group Inc. and
              Gerald L. Nudo (filed with the Securities and Exchange Commission
              as Exhibit 10.9 to the Registrant's Annual Report on Form 10-KSB
              for the year ended December 31, 1997 and incorporated by
              reference)

10.10         Amendment to Director Stock Option Agreement Director Option Grant
              Program dated December 30, 1997 between Semele Group Inc. and
              Robert M. Ungerleider (filed with the Securities and Exchange
              Commission as Exhibit 10.10 to the Registrant's Annual Report on
              Form 10-KSB for the year ended December 31, 1997 and incorporated
              by reference)

10.11         Amendment to Director Stock Option Agreement Director Option Grant
              Program dated December 30, 1997 between Semele Group Inc. and
              Walter E. Auch (filed with the Securities and Exchange Commission
              as Exhibit 10.11 to the Registrant's Annual Report on Form 10-KSB
              for the year ended December 31, 1997 and incorporated by
              reference)

10.12         Third Amended and Restated Employment Agreement for Leonard G.
              Levine dated May 1, 1997 (filed with the Securities and Exchange
              Commission as Exhibit (10)(i) to the Registrant's Quarterly Report
              on Form 10-QSB for the quarter ended June 30, 1997 and
              incorporated by reference)

10.13         Amendment No. 1 to Exchange Agreement dated August 7, 1997 (filed
              with the Securities and Exchange Commission as Exhibit (10)(ii) to
              the Registrant's Quarterly Report on Form 10-QSB for the quarter
              ended June 30, 1997 and incorporated by reference)

10.14         Exchange Agreement dated April 30, 1997 by and among AFG Hato
              Arrow Limited Partnership, AFG Dove Arrow Limited Partnership,
              AIP/Larkfield Limited Partnership, Equis Exchange LLC, Equis
              Financial Group Limited Partnership and the Registrant and related
              exhibits (filed with the Securities and Exchange Commission as
              Exhibit (10)(i) to the Registrant's Quarterly Report on Form
              10-QSB for the quarter ended June 30, 1997 and incorporated by
              reference)

10.15         Directors Stock Option Agreement dated July 15, 1994

10.16         Executive Stock Option Agreements dated July 1, 1994, July 11,
              1995 and April 16, 1996

10.17         Agreement for Purchase and Sale of Stock dated August 31, 1998
              between Semele Group Inc. and Equis Financial Group Limited
              Partnership (filed with the Securities and Exchange Commission as
              Exhibit (10)(17) to the Registrant's Quarterly Report on Form
              10-QSB for the quarter ended September 30, 1998 and incorporated
              by reference)

10.18         Promissory Note dated August 31, 1998 between Semele Group Inc.
              and Equis Financial Group Limited Partnership (filed with the
              Securities and Exchange Commission as Exhibit (10)(18) to the
              Registrant's Quarterly Report on Form 10-QSB for the quarter ended
              September 30, 1998 and incorporated by reference)

10.19         Security Agreement dated August 31, 1998 between Semele Group Inc.
              and Equis Financial Group Limited Partnership (filed with the
              Securities and Exchange Commission as Exhibit (10)(19) to the
              Registrant's Quarterly Report on Form 10-QSB for the quarter ended
              September 30, 1998 and incorporated by reference)

21            Subsidiaries of the Company

27            Financial Data Schedule (such schedule is not deemed filed as part
              of this report)

99.1          Press Release dated October 21, 1997 (filed with the Securities
              and Exchange Commission as Exhibit (99)(i) to the Registrant's
              Report on Form 8-K dated October 21, 1997 and incorporated by
              reference)

(b)           No report on Form 8-K was filed by the Registrant during the
              quarter ended March 31, 1999.
</TABLE>


                                       12
<PAGE>

                                   SIGNATURES


PURSUANT to the requirements of the Exchange Act, the Issuer has duly caused
this Report to be signed on its behalf by the undersigned thereunto duly
authorized.


SEMELE GROUP INC.




By:      /s/ Gary D. Engle                                Date:  May 14, 1999
         Gary D. Engle, Chairman, Chief Executive
         Officer and Director




By:      /s/ Gary M. Romano                               Date:  May 14, 1999
         Gary M. Romano, Vice President and
         Chief Financial Officer


                                       13
<PAGE>

                                   SIGNATURES

PURSUANT to the requirements of the Exchange Act, the Issuer has duly caused
this Report to be signed on its behalf by the undersigned thereunto duly
authorized.


SEMELE GROUP INC.




By:                                                        Date:  May 14, 1999
         --------------------------------------------
         Gary D. Engle, Chairman, Chief Executive
         Officer and Director




By:                                                        Date:  May 14, 1999
         --------------------------------------------
         Gary M. Romano, Vice President and
         Chief Financial Officer


                                       14