SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                   FORM 10-QSB
(Mark One)
[ X ] Quarterly Report Under Section 13 or 15(d) of the Securities  Exchange Act
of 1934 For the quarterly period ended March 31, 1999

[ ] Transition  Report Under Section 13 or 15(d) of the Securities  Exchange Act
of 1934 For the transition period from ____________ to ____________


Commission File Number:  001-13387

                                AeroCentury Corp.
                 (Name of small business issuer in its charter)
     Delaware                                                    94-3263974
State or other jurisdiction of              (I.R.S. Employer Identification No.)
incorporation or organization)

             1440 Chapin Avenue, Suite 310
                Burlingame, California                                  94010
       (Address of principal executive offices)                      (Zip Code)

Issuer's telephone number, including area code:  (650) 340-1888

Securities registered pursuant to Section 12(b) of the Act:

 Title of Each Class                       Name of Exchange on Which Registered
Common Stock, $0.001 par value                       American Stock Exchange

Securities registered pursuant to Section 12(g) of the Act:  None

Check whether the Issuer:  (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or
for such shorter  period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.
Yes X    No
   ---     --- 

As of May 13, 1999 the Issuer has 1,606,557 Shares of Common Stock  outstanding,
of which 38,100 are held as Treasury Stock.

Transitional Small Business Disclosure Format (check one): Yes    No X
                                                              ---   ---


<PAGE>



Part I.       Financial Information

Item 1.       Financial Statements

<TABLE>
<CAPTION>
                                AeroCentury Corp.
                                  Balance Sheet

<S>                                                                              <C> 

                                     ASSETS
                                                                                      March 31,
                                                                                        1999

Cash and cash equivalents                                                         $     1,431,340
Deposits                                                                                2,740,820
Accounts receivable                                                                       315,550
Aircraft and aircraft engines on operating leases,
     net of accumulated depreciation of $16,018,220                                    30,106,000
Prepaid expenses and other                                                                174,180
Deferred taxes                                                                            219,240
                                                                                  ---------------

Total assets                                                                      $    34,987,130
                                                                                  ===============

                      LIABILITIES AND SHAREHOLDERS' EQUITY

Liabilities:
     Accounts payable and accrued expenses                                        $       484,240
     Notes payable and accrued interest                                                12,885,420
     Maintenance deposits and accrued costs                                             2,503,130
     Security deposits                                                                    699,600
     Prepaid rent                                                                          82,440
     Deferred taxes                                                                     3,421,400
     Taxes payable                                                                        141,800
                                                                                  ---------------
Total liabilities                                                                      20,218,030
                                                                                  ---------------
Shareholders' Equity:
     Preferred stock, $.001 par value, 2,000,000 shares
        authorized, no shares issued and outstanding                                            -
     Common stock, $.001 par value, 3,000,000 shares
        authorized, 1,606,557 shares issued and outstanding                                 1,610
     Paid in capital                                                                   13,821,200
     Retained earnings                                                                  1,107,510
                                                                                  ---------------
                                                                                       14,930,320
     Treasury stock at cost, 17,800 shares                                              (161,220)
                                                                                  ---------------
Total shareholders' equity                                                             14,769,100
                                                                                  ---------------
Total liabilities and shareholders' equity                                        $    34,987,130
                                                                                  ===============
</TABLE>

The accompanying notes are an integral part of this statement.


<PAGE>

<TABLE>
<CAPTION>

                                AeroCentury Corp.
                            Statements of Operations


                                                               For the Three Months Ended March 31,
<S>                                                           <C>                         <C> 

                                                                     1999                      1998

Revenues:

     Rent income                                              $     1,395,330             $        809,920
     Other income                                                      25,190                       12,000
                                                              ---------------             ----------------
                                                                    1,420,520                      821,920
                                                              ---------------             ----------------   
Expenses:

     Management fees                                                  241,290                      141,110
     Depreciation                                                     306,970                      162,820
     Interest                                                         209,430                        8,090
     Professional fees and general and administrative                 116,040                       81,420
                                                               --------------             ----------------  
                                                                      873,730                      393,440
                                                               --------------             ----------------  
Income before taxes                                                   546,790                      428,480

Tax provision                                                         206,470                      170,440
                                                               --------------             ----------------   
Net income                                                    $       340,320             $        258,040
                                                               ==============             ================       
Weighted average common
   shares outstanding                                               1,592,811                    1,606,557
                                                               ==============             ================  
Basic earnings per share                                      $          0.21             $           0.16
                                                               ==============             ================  
</TABLE>

The accompanying notes are an integral part of this statement.





<PAGE>


<TABLE>
<CAPTION>

                                AeroCentury Corp.
                            Statements of Cash Flows


                                                                           For the Three Months Ended March 31,
<S>                                                                  <C>                       <C>  
                                                                           1999                       1998

Net cash provided by operating activities                            $       862,360           $     1,062,670

Investing activities:
   Purchase of aircraft                                                  (7,600,000)               (1,124,480)
                                                                      --------------           ---------------
Net cash used by investing activities                                    (7,600,000)               (1,124,480)

Financing activities:
   Issuance of notes payable                                               6,400,000                         -
   Purchase of treasury stock                                               (83,030)                         -
   Issuance of secured note                                                        -                   866,670
                                                                      --------------           ---------------
Net cash provided by financing activities                                  6,316,970                   866,670

Net change from consolidation of partnerships                                      -                    22,860
                                                                      --------------           ---------------      
Net (decrease)/increase in cash and cash equivalents                       (420,670)                   827,720

Cash and cash equivalents, beginning of period                             1,852,010                     7,980
                                                                      --------------           ---------------
Cash and cash equivalents, end of period                             $     1,431,340           $       835,700
                                                                      ==============           ===============
</TABLE>


The accompanying notes are an integral part of this statement.


<PAGE>



                                AeroCentury Corp.
                          Notes to Financial Statements
                                 March 31, 1999

1.       Basis of Presentation

         AeroCentury  Corp.  (the  "Company") was  incorporated  in the state of
Delaware on February 28, 1997.  The Company was formed solely for the purpose of
acquiring JetFleet Aircraft,  L.P. and JetFleet Aircraft II, L.P.,  partnerships
formed under  California  law for the purpose of  investing  in leased  aircraft
equipment,  (collectively,  the  "Partnerships")  in  a  statutory  merger  (the
"Consolidation"), which was effective January 1, 1998. The Company is continuing
in the aircraft leasing business in which the Partnerships  engaged and plans to
use leveraged financing to acquire additional aircraft assets on lease.

         Because  greater than 90% of the limited  partnership  units of each of
the  Partnerships  agreed  to  the  Consolidation,  it  has  been  treated  as a
pooling-of-interests  under generally  accepted  accounting  principles with the
assets and liabilities of the combining  entities recorded at historical cost on
the  Consolidation  date.  On January  16,  1998,  the Company was listed on the
American Stock Exchange under the symbol ACY.

         The  accompanying  balance  sheet at March 31, 1999 and  statements  of
operations  and cash flows for the three  months  ended  March 31, 1999 and 1998
reflect all  adjustments  (consisting of only normal  recurring  accruals) which
are, in the opinion of the Company,  necessary  for a fair  presentation  of the
financial results.  The results of operations of such period are not necessarily
indicative of results of operations for a full year.

         Organization and Capitalization

         At December 31, 1997, all 150,000 of the Company's  outstanding  shares
were owned by JetFleet  Holding  Corp.  ("JHC"),  a California  corporation.  On
January 1, 1998,  1,456,557  additional common shares were issued as a result of
the Consolidation.

         JetFleet Management Corp. ("JMC"), a wholly owned subsidiary of JHC, is
an integrated aircraft  management,  marketing and financing business.  Prior to
the Consolidation, JMC managed the aircraft assets of the Partnerships on behalf
of their general  partners and limited  partners.  JMC also manages the aircraft
assets of JetFleet III and AeroCentury IV, Inc.,  California  corporations which
are affiliates of JMC.

         On April 17, 1998,  in  connection  with the adoption of a  shareholder
rights plan,  the Company filed a Certificate  of  Designation  designating  the
rights,  preferences and privileges of a new Series A Preferred Stock.  Pursuant
to the plan, the Company issued rights to its shareholders of record as of April
23, 1998,  entitling each shareholder to the right to purchase one one-hundredth
of a share of Series A  Preferred  Stock for each share of Common  Stock held by
the shareholder.  Such rights are exercisable  only under certain  circumstances
concerning a proposed acquisition or merger of the Company.

         On October 23, 1998, the Company's  Board of Directors  adopted a stock
repurchase  plan,  granting  management  the authority to purchase up to 100,000
shares of the Company's common stock, in privately negotiated transactions or on
the market, at such price and on such terms and conditions  deemed  satisfactory
to management.  During the quarter ended March 31, 1999,  the Company  purchased
8,600  shares of its  common  stock and,  since the  adoption  of the plan,  has
purchased 17,800 shares.

         Revenue Recognition

         Revenue  from  leasing of aircraft  assets is  recognized  as operating
lease revenue on a  straight-line  basis over the terms of the applicable  lease
agreements.  Interest  income  includes  interest earned from two finance leases
which expired in December 1997 and June 1998.




<PAGE>



                                AeroCentury Corp.
                          Notes to Financial Statements
                                 March 31, 1999

1.       Basis of Presentation (continued)

         Aircraft and Aircraft Engines On Operating Leases

         The Company's  interests in aircraft and aircraft  engines are recorded
at cost, which includes  acquisition  costs.  Depreciation is computed using the
straight-line  method over the  aircraft's  estimated  economic life  (generally
assumed to be twelve years),  to an estimated  residual  value.  The depreciable
base of the assets acquired by the Company in the Consolidation was equal to the
net book value of the assets at December 31, 1997.

         Loan Commitment and Related Fees

         To the extent that the Company is required to pay loan  commitment fees
and legal fees in order to secure debt, such fees are amortized over the life of
the related loan.

         Maintenance Deposits and Accrued Costs

         Maintenance  costs under the Company's  triple net leases are generally
the responsibility of the lessees. Maintenance deposits and accrued costs in the
accompanying  balance sheet include  refundable and  non-refundable  maintenance
payments  received  from  lessees as well as amounts  accrued by the Company for
future work to be performed on one of its aircraft.

         Income Taxes

         The Company follows the liability method of accounting for income taxes
as required by the provisions of SFAS No. 109 Accounting for Income Taxes. Under
the  liability  method,  deferred  income  taxes  are  recognized  for  the  tax
consequences of "temporary  differences" by applying enacted statutory tax rates
applicable  to future  years to  differences  between  the  financial  statement
carrying  amounts  and the tax bases of  existing  assets and  liabilities.  The
effect on deferred taxes of a change in the tax rates is recognized in income in
the period that includes the enactment date.

         Cash and Cash Equivalents/Deposits

         The Company  considers highly liquid  investments  readily  convertible
into known amounts of cash, with original maturities of 90 days or less, as cash
equivalents.  Deposits  represent cash balances held related to maintenance  and
security deposits and are subject to withdrawal restrictions.

         Use of Estimates

The preparation of financial  statements in conformity  with generally  accepted
accounting principles requires management to make estimates and assumptions that
affect certain  reported amounts and  disclosures.  Accordingly,  actual results
could differ from those estimates. 2. Aircraft and Aircraft Engines On Operating
Leases

         At March 31, 1999, the Company owned four de Havilland DHC-7,  three de
Havilland  DHC-6,  two Fairchild Metro III, one Shorts SD 3-60 and two Fokker 50
aircraft,  and 24  turboprop  engines.  During the first  quarter  of 1999,  the
Company  purchased  one of the  Fairchild  Metro  III and one of the  Fokker  50
aircraft,  leased to carriers in North America and Brazil,  respectively,  for a
total of $7,600,000, including acquisition costs.


<PAGE>



                                AeroCentury Corp.
                          Notes to Financial Statements
                                 March 31, 1999


3.       Notes Payable and Accrued Interest

         On June 30, 1998 the Company  obtained a $15 million  revolving  credit
facility to acquire  turboprop  aircraft and engines under lease.  The facility,
which  expires on June 30,  2000 and which may be renewed  annually  thereafter,
bears interest, payable monthly, at either prime or LIBOR plus 200 basis points,
at the  Company's  option.  The  facility  may be expanded  to $30 million  with
participation of additional  banks, and, on April 1, 1999, the Company signed an
agreement  increasing its facility to $22.5 million.  The Company's aircraft and
aircraft  engines serve as collateral under the facility and, in accordance with
the  credit  agreement,  the  Company  must  maintain  compliance  with  certain
financial  covenants.  As of March 31, 1999, the Company was in compliance  with
all such covenants.  As of March 31, 1999,  $12.8 million was outstanding  under
the credit  facility and interest of $85,420 was accrued,  using a prime rate of
7.75%.

4.       Income Taxes

         The items comprising income tax expense are as follows:



                                                For the Quarters Ended March 31,

                                                      1999              1998
                  Current tax provision:
                  Federal                            122,020     $            -
                  State                               33,470                  -
                  Current tax provision              155,490                  -

         Deferred tax provision:
                  Federal                             41,850            145,480
                  State                                9,130             24,960
                  Deferred tax provision              50,980            170,440

         Total provision for income taxes            206,470     $      170,440

         Total  income  tax  expense  differs  from the  amount  which  would be
provided by applying the statutory federal income tax rate to pretax earnings as
illustrated below:

         Income tax expense at
               statutory federal income tax rate  $    185,910     $    145,680
         State taxes net of federal benefit             31,900           25,000
         Tax rate differences                          (11,340)            (240)
         Total income tax expense                 $    206,470     $    170,440




<PAGE>



                                AeroCentury Corp.
                          Notes to Financial Statements
                                 March 31, 1999


4.       Income Taxes (continued)

         Temporary   differences  and   carryforwards   which  gave  rise  to  a
significant  portion of deferred tax assets and liabilities as of March 31, 1999
are as follows:

                                                                       March 31,
                                                                        1999

         Deferred tax assets:
                  Amortization of organizational costs          $        66,200
                  State taxes                                            11,360
                  Maintenance reserves                                  108,840
                  Prepaid rent                                           32,840
                           Net deferred tax assets                      219,240
         Deferred tax liabilities:
                  Depreciation on aircraft and engines               (3,421,400)

                           Net deferred tax liability           $     3,202,160

5.       Supplementary Disclosures of Cash Flow Information

         During the  quarters  ended March 31, 1999 and 1998,  the Company  paid
interest totaling $163,780 and $8,090, respectively.

6.       Related Party Transactions

         Since the Company has no employees,  the Company's  portfolio of leased
aircraft  assets is managed  and  administered  under the terms of a  management
agreement with JMC. Under this agreement,  JMC receives a monthly management fee
based on the net asset value of the assets  under  management.  During the first
quarter of 1999, the Company paid JMC $221,920 of management  fees. In addition,
JMC may receive a brokerage  fee for locating  assets for the Company,  provided
that the aggregate purchase price including chargeable acquisition costs and any
brokerage  fee does not  exceed  the fair  market  value of the  asset  based on
appraisal,  and a remarketing fee in connection with the sale or re-lease of the
Company's assets.  The management fees,  brokerage fees and remarketing fees may
not exceed the  customary  and usual fees that would be paid to an  unaffiliated
party for such services.

         In March 1998, the Company acquired an aircraft on lease using cash and
a loan in the amount of $866,700 from an  affiliate.  The Company paid $8,090 of
interest  during the first  quarter of 1998.  The loan was repaid  during August
1998.

         Certain  employees of JMC  participate in an employee  stock  incentive
plan which granted  options to purchase shares of the Company held by JHC. As of
March 31, 1999, 2,833 such options had been exercised.



<PAGE>



7.       Subsequent Events

         Stock Repurchases

         During April and May 1999, the Company repurchased 20,300 shares of its
common stock.

         Expansion of Credit Facility

         On April 1, 1999, the Company  signed an agreement,  increasing its $15
million revolving credit facility to $22.5 million.

         S/N 72 Lease Expiration

         The lease for S/N 72 expired on April 25, 1999.  The Company has been
seeking re-lease opportunities for S/N 72 and is discussing lease terms with
interested parties.

         Raytheon Lease Renewal

         Raytheon has exercised its two-year renewal option for the three Dash-7
aircraft. At December 31, 1998, Raytheon had received government funding for the
full two year term on two of the aircraft,  and government funding through March
31, 1999 on the third aircraft.  During April 1999, Raytheon received government
funding for the full renewal term of the third aircraft.




<PAGE>



Item 2.           Management's Discussion and Analysis or Plan of Operation.

Forward-Looking Statements

Certain statements contained in this report, and, in particular,  the discussion
regarding the Company's beliefs, plans, objectives,  expectations and intentions
regarding:  the  adequacy of the  Company's  cash flow to meet  increases in its
credit line interest rate; the company's ability to meet its ongoing operational
cash flow needs;  the Company's  intention to repay revolving loan  indebtedness
from  future  equity or debt  financings;  the  Company's  ability to reduce the
"off-lease" time for an asset by monitoring and immediate  marketing  responses;
the  Company's  intention  and  ability to  increase  its credit  facility;  the
Company's  intention  to use  proceeds of its credit line to acquire  additional
assets;  the  stability of the air  transport  industry and asset sale and lease
prices; the supply of suitable  transaction  opportunities for the Company;  the
Company's  ability to reduce the impact of an industry  downturn  through proper
asset and  lessee  selection;  the  Company's  competitiveness  in the  regional
aircraft market;  and the Company's ability to obtain credit enhancement for its
lessees,   such  as  letters   of  credit  or  third   party   guaranties,   are
forward-looking statements.  While the Company believes that such statements are
accurate,  the Company's business is dependent upon general economic conditions,
particularly  those that affect the demand for  turboprop  aircraft and engines,
general  portfolio  ownership  risks,  and the availability of financing for the
Company's turboprop equipment, and future trends and results cannot be predicted
with certainty.  The Company's actual results could differ materially from those
discussed in such forward-looking  statements. The cautionary statements made in
this Report should be read as being  applicable  to all related  forward-looking
statements  wherever  they appear in this  Report.  Factors  that could cause or
contribute  to such  differences  include those  discussed  below in the section
entitled "Factors that May Affect Future Results."

Results of Operations

The Company had revenues of  $1,420,520  and $821,920 and net income of $340,320
and $258,040 for the quarters ended March 31, 1999 and 1998, respectively.

Rent  income is  approximately  $585,000  higher in 1999  versus 1998 due to the
purchases of additional  aircraft on lease during the fourth quarter of 1998 and
first quarter of 1999.

Management fees and depreciation are approximately $100,000 and $144,000 higher,
respectively,  in 1999  versus  1998  because  of the  1998  and  1999  aircraft
acquisitions.  Interest expense is approximately $201,000 higher in 1999 than in
1998 because the Company's credit facility was not used until the fourth quarter
of 1998.  Professional fees and general administrative expense are approximately
$35,000 higher in 1999 primarily due to an increase in legal expenses associated
with using the Company's credit facility.

Liquidity and Capital Resources

The Company is currently  financing its asset growth through  borrowings secured
by its lease  portfolio  and excess cash flow.  The Company has a $22.5  million
credit  facility which expires on June 30, 2000 and which is renewable  annually
thereafter.  The facility bears interest at either prime or LIBOR plus 200 basis
points,  at the  Company's  option.  The facility may be expanded to $30 million
with  participation of additional banks. As of March 31, 1999, $12.8 million was
outstanding under the credit facility and interest of $85,420 was accrued, using
a prime rate of 7.75%.

The prime rate has been stable since November 1998. The Company  believes it has
adequate  cash flow to meet  increases in the interest  rate  applicable  to its
credit line obligations. Any increase in such interest rates is likely to be the
result of increased  prevailing  interest rates.  Increased  prevailing interest
rates  generally  result in higher  lease  rates as well,  and so an increase in
credit line payments may be offset at least  partially by higher revenues on new
leases and  renewals  of leases  entered  into by the  Company.  The  Company is
studying  whether  it  is  advisable  to  enter  into  an  interest  rate  hedge
transaction,  which for a fee would act to lock in current interest rates on its
credit  line  obligations.  In making its  decision,  the  Company is  analyzing
interest  rate  trends,  the  ongoing  costs of  maintaining  the  hedge and the
magnitude of the impact of any interest rate swing.



<PAGE>



It is the Company's  policy to monitor  lessee's  needs in periods before leases
are due to expire.  If it appears  that a lessee will not be renewing its lease,
the Company  immediately  initiates  marketing efforts to locate a potential new
lessee or purchaser for the aircraft.  This  procedure  helps the Company reduce
any potential  that an asset will be  "off-lease"  for a significant  time.  The
lease for S/N 72  expired  on April  25,  1999.  The  Company  has been  seeking
re-lease opportunities for S/N 72 since the lessee provided notice that it would
not renew the lease,  and the Company is discussing  lease terms with interested
parties.  Management  anticipates that such discussions will minimize the amount
of time that S/N 72 is off lease.  The Company's  other  aircraft are subject to
leases with varying expiration dates between July 1, 1999 and November 23, 2003.
Given the  varying  lease  terms and  expiration  dates for the  aircraft in the
Company's  portfolio,  management  believes  that the Company will have adequate
cash  flow  to meet  any  on-going  operational  needs,  even if S/N 72  remains
off-lease for an extended period of time.

Factors that May Affect Future Results

Risks of Debt  Financing.  The Company's use of acquisition  financing under its
revolving  credit  agreement  will  subject  the Company to  increased  risks of
leveraging.  The revolving loans are secured by the Company's existing assets as
well as the assets to be acquired  with the  financing.  Any  default  under the
revolving  credit  agreement could result in foreclosure upon not only the asset
acquired  using such  financing,  but also the  existing  assets of the  Company
securing the revolving loan.

In order to achieve  optimal  benefit from the revolving  credit  facility,  the
Company  intends to repay the revolving  loans from proceeds of subsequent  term
debt or equity financings.  Such replacement financing would provide the Company
with more favorable  long-term repayment terms and also would permit the Company
to make  further  draws under the  revolving  credit line equal to the amount of
revolving  debt  refinanced.  There can be no assurance that the Company will be
able to obtain the necessary amount of replacement term debt or equity financing
on  favorable  terms so as to permit  multiple  draws on the  revolving  line of
credit.  The Company  anticipates that it will request an increase in its credit
facility  to the  full  $30  million  limit.  Funding  of the  remaining  amount
requested is dependent upon the ability of the original  revolving credit lender
("Lender") to find additional loan participants,  and there is no assurance that
such participants will be located by the Lender.

The revolving  line of credit has an initial term of two years  expiring in June
2000, and is renewable at the sole discretion of Lender and its participants, if
any.  There is no  assurance  that the line of credit  will be  renewed.  If the
revolving  loan is not  renewed  by the Lender  and its  participants,  then all
indebtedness  under the revolving loan agreement will become immediately due and
payable.  There is no assurance that the Company will have adequate  replacement
financing in place in order to meet such accelerated repayment obligations.

All of the  Company's  current  credit  line  indebtedness  carries  a  floating
interest rate based on the lender's  prime rate.  The Company has the ability to
convert  the prime rate loans to loans based on a floating  LIBOR  rate.  If the
applicable index rate increases,  then the Company's  payment  obligations under
the line of credit would increase and could result in lower net revenues for the
Company.

Acquisition of Additional Assets. The Company intends to use the proceeds of its
revolving  credit  facility  to acquire  additional  assets  for the  purpose of
generating income for the Company.  The Company anticipates that it will be able
to expend the entire net  financing  proceeds on the  acquisition  of additional
assets on terms  favorable to the Company,  but the Company has not entered into
any contracts for acquisition of any assets,  and there is no assurance that the
Company will be able to purchase assets or lease such assets on favorable terms.

General Economic Conditions. The market for used aircraft has been cyclical, and
usually  reflects  economic  conditions  and  the  strength  of the  travel  and
transportation industry. The Company believes that the air transport industry is
currently stable, with demand for aircraft,  asset prices and lease rates level,
and in some  cases,  increasing.  Nonetheless  at any time,  the market for used
aircraft  may be  adversely  affected  by  such  factors  as  airline  financial
difficulties,  higher fuel costs, and improved availability and economics of new
replacement aircraft.



<PAGE>



The Company  believes that the current aircraft market provides a good supply of
suitable  transaction  opportunities  for the  Company,  primarily  in  overseas
markets,  but domestically as well. There are currently some disparities between
geographic regions with respect to the condition of the air transport  industry,
with the Pacific Rim, in particular,  not currently experiencing the growth that
is taking place in the U.S. and other foreign  markets.  This economic  slowdown
has not had a  significant  effect  on the  Company's  business,  as it does not
currently have any assets placed with Pacific Rim lessees.  There have also been
disruptions in the currency markets in certain  geographic  areas. To the extent
that such  disruptions  adversely affect a region's  economic  growth,  suitable
transactions  may be more  difficult  for the Company to find in that region and
the Company's lessees in that area may be adversely affected.

An adverse change in the global air travel  industry,  however,  could result in
reduced  carrier revenue and excess capacity and increase the risk of failure of
some weaker regional air carriers.  While the Company  believes that with proper
asset and  lessee  selection  in the  current  climate,  as well as during  such
downturns, the impact of such changes on the Company can be reduced, there is no
assurance  that the Company's  business will escape the effects of such a global
downturn,  or a  regional  downturn  in an area where the  Company  has placed a
significant amount of its assets.

Reliance on JMC. All management of the Company is performed by JMC pursuant to a
Management  Agreement  between JMC and the Company  which has a 20-year term and
provides  for an  asset-based  management  fee.  JMC is not a  fiduciary  to the
Company or its stockholders. The Board of Directors does, however, have ultimate
control and supervisory  responsibility over all aspects of the Company and does
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, certain 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 with the Company.

The Management  Agreement may be terminated upon a default in the obligations of
JMC to the  Company,  and  provides  for  liquidated  damages  in the event of a
wrongful  termination  of the agreement by the Company.  Many of the officers of
JMC are also officers of the Company,  and certain  directors of the Company are
also directors of JMC. Consequently,  the directors and officers of JMC may have
a conflict of interest in the event of a dispute  over  obligations  between the
Company and JMC.  Although  the Company has taken steps to prevent  conflicts of
interest arising from such dual roles, such conflicts may still occur.

Ownership  Risks.  Most of the  Company's  portfolio is leased  under  operating
leases,  where the terms of the leases do not take up the entire  useful life of
an asset. The Company's  ability to recover its purchase  investment in an asset
subject  to an  operating  lease is  dependent  upon the  Company's  ability  to
profitably  re-lease  or resell the asset  after the  expiration  of the initial
lease term. Some of the factors that have an impact on the Company's  ability to
release or re-sell  include  worldwide  economic  conditions,  general  aircraft
market  conditions,  regulatory  changes  that  may  make an  asset's  use  more
expensive or preclude use unless the asset is modified, changes in the supply or
cost of aircraft equipment and technological  developments which cause the asset
to become obsolete.  In addition, a successful investment in an asset subject to
an operating  lease depends in part upon having the asset returned by the lessee
in serviceable  condition as required under the lease.  If the Company is unable
to remarket or sell its aircraft equipment on favorable terms when the operating
lease for such equipment expires,  the Company's business,  financial condition,
cash flow,  ability to service debt and results of operation  could be adversely
affected.

Lessee Credit Risk. If a lessee defaults upon his obligations under a lease, the
Company may be limited in its ability to enforce remedies. Most of the Company's
lessees are small domestic and foreign regional passenger airlines, which may be
even  more  sensitive  to  airline  industry  market  conditions  than the major
airlines.  As a  result,  the  Company's  inability  to  collect  rent  under  a
significant  lease or to  repossess  equipment  in the event of a  default  by a
lessee  could have a material  adverse  effect on the  Company's  revenue.  If a
lessee that is a certified U.S.  airline is in default under the lease and seeks
protection under Chapter 11 of the United States  Bankruptcy Code, under Section
1110 of the Bankruptcy Code, the Company would be  automatically  prevented from
exercising  any  remedies  for a  period  of 60  days.  By the end of the 60 day
period,  the lessee must agree to perform the obligations and cure any defaults,
or the Company would have the right to repossess the  equipment.  This procedure
under the  Bankruptcy  Code has been subject to significant  recent  litigation,
however,  and it is possible that the Company's  enforcement rights may still be
further  adversely  affected by a  declaration  of  bankruptcy  by a  defaulting
lessee.

International  Risks.  The  Company  may  focus in the near  term on  leases  in
overseas  markets,  which  markets are  currently  dynamic and which the Company
believes present attractive opportunities. Leases with foreign lessees, however,
may present somewhat different credit risks than those with domestic lessees.

Foreign laws, regulations and judicial procedures may be more or less protective
of lessor  rights as those which apply in the United  States.  The Company could
experience   collection  problems  related  to  the  enforcement  of  its  lease
agreements  under  foreign  local  laws and the  attendant  remedies  in foreign
jurisdictions.  The  protections  potentially  offered  by  Section  1110 of the
Bankruptcy Code would not apply to non-U.S.  carriers,  and applicable local law
may not  offer  similar  protections.  Certain  countries  do not have a central
registration or recording  system with which to locally  establish the Company's
interest  in  equipment  and  related  leases.  This  could  add  difficulty  in
recovering equipment in the event that a foreign lessee defaults.

Leases with foreign  lessees are subject to risks  related to the economy of the
country or region that such lessee is located even if the U.S.  economy  remains
strong.  On the other hand, a foreign  economy may remain strong even though the
domestic U.S. economy is not. A foreign economic downturn may occur and impact a
foreign lessee's ability to make lease payments,  even though the U.S. and other
economies  remain  stable.  Furthermore,  foreign  lessees  are subject to risks
related currency conversion fluctuations.  Although the Company's current leases
are all payable in U.S. dollars,  in the future, the Company may agree to leases
that permit payment in foreign currency,  which would subject such lease revenue
to monetary  risk due to  currency  fluctuations.  Even with  dollar-denominated
lease payment  provisions,  the Company could still be affected by a devaluation
of the lessee's  local  currency  which makes it more  difficult for a lessee to
meet its  dollar-denominated  lease payments,  increasing the risk of default of
that lessee,  particularly if that carrier's revenue is primarily derived in the
local currency.

Government  Regulation.  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 is competitive  because of its experience and operational  efficiency in
financing  the  transaction  types  desired by the regional air  carriers.  This
market segment,  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,  is not well  served by the
Company's  larger  competitors  in the aircraft  industry.  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.

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 and such act may not
apply to aircraft  operated in foreign  countries.  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.

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
which is in turn highly  sensitive to general  economic  conditions.  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.  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 or engine
types should decline in value.  The recent  introduction  of "regional  jets" to
serve on short routes  previously  thought to be  economical  only for turboprop
aircraft  operation could decrease the demand for turboprop  aircraft,  while at
the same increasing the supply of used turboprop aircraft.  This could result in
lower lease rates and values for the Company's existing turboprop aircraft.

Risks Related to Regional Air Carriers. Because the Company has concentrated its
existing  leases and 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 capital, 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.  Second,  a significant  area of
growth of this market is in areas outside of the United States, where collection
and enforcement are often more difficult and complicated than the United States.

Possible  Volatility of Stock Price.  The market price of the  Company's  Common
Stock could be subject to fluctuations  in response to operating  results of the
Company,  changes in general  conditions in the economy,  the financial markets,
the airline industry, changes in accounting principles or tax laws applicable to
the Company or its lessees,  or other  developments  affecting the Company,  its
customers or its  competitors,  some of which may be unrelated to the  Company's
performance.  Also, because the Company has a relatively small capitalization of
approximately 1.6 million shares,  there is a correspondingly  limited amount of
trading of the shares.  Consequently,  a single or small  number of trades could
result  in a  market  fluctuation  not  related  to any  business  or  financial
development relating to the Company.

Year 2000 Considerations. Management of the Company has directed its information
technology ("IT") manager to require any software or hardware  purchased for use
by the Company to have a warranty of Year 2000 compliance.  It has also directed
its IT manager to study any systems that may require Year 2000 remediation.  The
IT manager has  determined  that,  because the Company's IT system is based on a
"MacOS" system,  the Company's  internal  technology  systems are ready for Year
2000,  and  there  should  not  be  any  material  costs  associated  with  such
remediation.  Furthermore, the phone and internet systems have been warranted by
their   vendors  for  Year  2000   compliance.   The   Company's   internal  and
administrative  operations  are  not  highly  dependent  on any  other  advanced
technology system,  and,  consequently,  management  believes that the Company's
exposure  to  loss  as a  result  of  Year  2000  issues  in  its  internal  and
administrative operations is not significant.

Management  believes that the electronic systems used in the equipment leased by
the Company to lessees will not be materially affected by the Year 2000 and that
any  remediation  of the  technology  systems  embedded in the aircraft  that it
leases will not be a material  expense to the Company.  The Company has notified
all lessees of the Year 2000 problem and has requested information on the status
of each lessee's study and remediation  plans.  The Company  believes that there
should not be any material  costs in connection  with such a study.  The Company
has been  consulting  with all the  manufacturers  of its  leased  equipment  to
confirm Year 2000  compliance.  Since the Company's  leases  generally place all
maintenance  and repair  obligations  on the  lessees,  to the  extent  that the
aircraft  are on lease  when the  Year  2000  problem  is  identified,  it would
generally be the lessee's and not the Company's  responsibility to remediate any
Year 2000 problem with the leased aircraft.

To the extent that a lessee has Year 2000 problems that significantly  adversely
affect its overall  financial  status,  such  material  problems  may affect the
lessee's operations and increase the risk of default by a lessee under its lease
with the Company.  Furthermore,  Year 2000 issues may have a material  impact on
FAA operations  and the operations of certain air carriers,  which in turn would
negatively affect the aircraft industry in general.

The Company's  essential  functions  are not dependent  upon any key third party
vendors or service  providers  related to the leasing or finance  business,  and
consequently,   the   interruption   of  goods  and   services   from  any  such
industry-specific  third party vendor or service  provider to the Company is not
likely  to cause a  material  loss to the  Company.  Of  course,  the  Company's
ordinary  business  operation  is dependent  upon  vendors  that  provide  basic
services to  businesses  generally,  such as utility  companies,  phone and long
distance  companies,  courier  services,  banking  institutions.  The Company is
monitoring the Year 2000 readiness of such providers. Management believes that a
temporary  interruption  in  services  to the  Company by these types of service
providers  caused by Year 2000 problems would not cause  material  losses to the
Company. An extended loss of these services, however, could adversely affect the
Company's business and financial  performance.  The Company has not yet made any
contingency plans for the extended loss of these basic services.



<PAGE>



                                   SIGNATURES

In accordance  with Section 13 or 15(d) of the Exchange Act, the  Registrant has
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized on May 13, 1999.


                                                   AEROCENTURY CORP.


                                               By:    /s/ Neal D. Crispin
                                                          Neal D. Crispin
                                               Title: President


In  accordance  with the Exchange  Act, this report has been signed below by the
following persons on behalf of the Registrant and in the capacities indicated on
May 13, 1999.

         Signature                               Title


/s/ Neal D. Crispin                Director, President and Chairman of the
-------------------------------    Board of Directors of the Registrant
     Neal D. Crispin               (Principal Executive Officer)




/s/ Toni M. Perazzo                Director, Vice President-Finance and Secty.
-------------------------------    of the Registrant (Principal Financial and 
     Toni M. Perazzo               Accounting Officer)



/s/ Marc J. Anderson               Director, Chief Operating Officer, Senior 
-------------------------------    Vice President
     Marc J. Anderson