UNITED STATES
                       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 June 30, 2003

[ ] 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.
                 (Exact 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 August 13, 2003 the Issuer had 1,606,557 Shares of Common Stock
outstanding, of which 63,300 are held as Treasury Stock.

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








<PAGE>



                                     PART I

                              Financial Information

Forward-Looking Statements

This Quarterly Report on Form 10-QSB includes "forward-looking statements"
within the meaning of Section 27A of the Securities Act and Section 21E of the
Exchange Act. All statements in this Report other than statements of historical
fact are "forward-looking statements" for purposes of these provisions,
including any statements of plans and objectives for future operations and any
statements of assumptions underlying any of the foregoing. Statements that
include the use of terminology such as "may," "will," "expects," "plans,"
"anticipates," "estimates," "potential," or "continue," or the negative thereof,
or other comparable terminology are forward-looking statements.

Forward-looking statements include: (i) in Item 1 "Financial Statements,"
statements regarding the Company's expectations regarding negotiating renewed
lease terms with the lessees and completing the acquisition of four Fokker 50
aircraft, delivery of aircraft for which lease term sheets have been signed, the
return of three aircraft pursuant to early lease termination, delivery to a
lessee of a Fokker 50 aircraft immediately upon return acceptance by the
Company, extension of a lease for a DHC-8 aircraft through the maturity date of
the financing, discussions regarding long-term extensions of leases for Fokker
50 and DHC-8 aircraft, discussions with its agent bank regarding waiver of
certain covenants in its credit line facility; and the Company's expectation
that it will be able to obtain a new revolving credit facility in an amount
equal to or greater than $40 million at reasonable market terms; (ii) in Item 2
"Management's Discussion and Analysis or Plan of Operation -- Liquidity and
Capital Resources," statements regarding the Company's discussions with its
agent bank regarding waiver of certain covenants in its credit line facility;
the Company's expectation that no action will be taken by the agent bank on the
financial ratio covenant default so long as negotiations of the credit facility
renewal continue; the Company's expectation that it will be able to obtain a new
revolving credit facility in an amount equal to or greater than $40 million at
reasonable market terms, including a revision that will resolve the financial
covenant ratio non-compliance; the Company's expectation of an extension of a
lease for a DHC-8 aircraft through the maturity date of its special-purpose
financing, or if the lease is terminated, the Company's ability to meet loan
payment obligations through a reasonable six-month remarketing period; the
Company's belief that it will have adequate cash flow to meet its ongoing
operational needs; (iii) in Item 2 "Management's Discussion and Analysis or Plan
of Operation -- Outlook," statements regarding the Company's belief that it will
be able to renew its credit facility in advance of the August 28, 2003
expiration date, to add a third lender to its credit facility and to return the
credit facility to a $50 million limit; the Company's belief regarding
discussions with its agent bank regarding waiver of certain covenants in its
credit line facility and to revise financial covenants in its credit facility to
take into account the Company's financial circumstances; the Company's belief
that the lessee of the aircraft financed under a special purpose financing will
extend the lease through the maturity date of the financing; the Company's
belief that it will not experience events similar to the default of a Haitian
lessee and the weak credit position of a Brazilian lessee; the Company's
expectations regarding return of two Dash-7 aircraft from Haiti and the
substantial amount of time required to return these aircraft into revenue
producing status; and the Company's anticipation that revenue growth will likely
only occur through acquisition of new leased assets (iv) in Item 2 "Management's
Discussion and Analysis or Plan of Operation -- Factors that May Affect Future
Results," statements regarding the Company's obligation to make repayments in
the near term due to collateral base limitations; the Company's expectations
regarding return of two Dash-7 aircraft from Haiti and the substantial amount of
time required to return these aircraft into revenue producing status; the
Company's anticipated acquisition of primarily used aircraft; the Company's
ability to obtain third party guaranties, letters of credit or other credit
enhancements from future lessees; the opportunities available in overseas
markets; and JMC's competitiveness due to its experience and operational
efficiency in financing transaction types desired by regional air carriers and
its global reputation.
<page>
These forward-looking statements involve risks and uncertainties, and it is
important to note that the Company's actual results could differ materially from
those projected or assumed in such forward-looking statements. Among the factors
that could cause actual results to differ materially are the factors detailed
under the heading "Management's Discussion and Analysis or Plan of Operation --
Factors That May Affect Future Results," including general economic conditions,
particularly those that affect the demand for regional aircraft and engines and
the financial status of the Company's primary customers, regional passenger
airlines and non-U.S. lessees; lack of any further disruptions to the air travel
industry similar to that which occurred on September 11, 2001 or the SARS
outbreak; the success of the Company's efforts in remarketing or re-leasing
aircraft that are currently or are about to come off-lease and in concluding
transactions for which term sheets have been executed; the Company's ability to
obtain a new credit facility on reasonable business terms at or prior to the
expiration of its current credit facility, as well as locate a replacement
lender for a departing credit line participant; the financial performance of the
Company's lessees and their compliance with rental, maintenance and return
conditions under their respective leases; the availability of suitable aircraft
acquisition transactions in the regional aircraft market; and future trends and
results which cannot be predicted with certainty. The cautionary statements made
in this Quarterly Report should be read as being applicable to all related
forward-looking statements wherever they appear herein. All forward-looking
statements and risk factors included in this document are made as of the date
hereof, based on information available to the Company as of the date hereof, and
the Company assumes no obligation to update any forward-looking statement or
risk factor. You should consult the risk factors listed from time to time in the
Company's filings with the Securities and Exchange Commission.


<PAGE>



Item 1.       Financial Statements

                                AeroCentury Corp.
                      Condensed Consolidated Balance Sheet
                                    Unaudited

                                     ASSETS
<table>
<caption>

                                                                                      June 30,
                                                                                        2003
                                                                                        ----
<S>                                                                              <C>

Assets:
     Cash and cash equivalents                                                    $     1,274,370
     Deposits                                                                           7,844,620
     Accounts receivable, net of allowance for doubtful accounts of $250,000            1,389,670
     Aircraft and aircraft engines on operating leases,
        net of accumulated depreciation of $19,950,800                                 63,795,200
     Prepaid expenses and other                                                           377,590
                                                                                  ---------------

Total assets                                                                      $    74,681,450
                                                                                  ===============


                      LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities:
     Accounts payable and accrued expenses                                        $       687,230
     Notes payable and accrued interest                                                42,276,140
     Maintenance reserves and accrued costs                                             8,080,060
     Security deposits                                                                  2,230,850
     Prepaid rent                                                                         192,390
     Deferred taxes                                                                     2,759,760
                                                                                  ---------------

Total liabilities                                                                      56,226,430
                                                                                  ===============

Stockholders' 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                                                                  5,136,280
                                                                                  ---------------
                                                                                       18,959,090
     Treasury stock at cost, 63,300 shares                                              (504,070)
                                                                                  ===============

Total stockholders' equity                                                             18,455,020
                                                                                  ---------------

Total liabilities and stockholders' equity                                        $   74,681,450
                                                                                  ==============
</table>
The accompanying notes are an integral part of these statements.


<PAGE>



                                AeroCentury Corp.
                   Condensed Consolidated Statements of Income

<table>
<caption>

                                                   For the Six Months                  For the Three Months
                                                      Ended June 30,                      Ended June 30,
                                                 2003              2002               2003                2002
                                                 ----              ----               ----                ----
                                                          Unaudited                          Unaudited
<S>                                         <C>               <C>                   <C>              <C>


Revenues:

     Operating lease revenue                $    4,637,600    $   4,423,540         $   2,185,660    $    2,229,900
     Other income                                   45,360           58,720                21,430            27,270
                                            --------------    -------------         -------------    --------------

                                                 4,682,960        4,482,260             2,207,090         2,257,170
                                            --------------    -------------         -------------    --------------
Expenses:
     Management fees                               967,630          837,650               480,560           416,990
     Depreciation                                1,680,110        1,366,050               839,310           685,340
     Interest                                      952,670          937,240               441,670           469,730
     Maintenance                                 1,837,980          225,510             1,736,980           149,430
     Bad debt expense                            1,049,910                -               949,910                 -
     Professional fees and
        general and administrative                 418,240          258,340               202,470           129,580
                                            --------------    -------------         -------------    --------------

                                                 6,906,540        3,624,790             4,650,900         1,851,070
                                            --------------    -------------         -------------    --------------

(Loss)/income before taxes                     (2,223,580)          857,470           (2,443,810)           406,100

Tax (benefit)/provision                          (807,490)          292,880             (852,610)           141,120
                                            --------------    -------------         -------------    --------------

Net (loss)/income                           $  (1,416,090)    $     564,590         $ (1,591,200)    $      264,980
                                            ==============    =============         =============    ==============

Weighted average common
     shares outstanding                          1,543,257        1,543,257             1,543,257         1,543,257
                                            ==============    =============         =============    ==============

Basic (loss)/earnings per share             $       (0.92)    $        0.37         $      (1.03)    $         0.17
                                            ==============    =============         =============    ==============

</table>
The accompanying notes are an integral part of these statements.







<PAGE>



                                AeroCentury Corp.
                 Condensed Consolidated Statements of Cash Flows

<table>
<caption>

                                               For the Six Months Ended June 30,
                                                      2003                2002
                                                      ----                ----
                                                              Unaudited

<S>                                             <C>                <C>


Net cash provided by operating activities        $     1,272,150    $      2,177,580

Investing activities:
   Payments received on note payable                      17,600              25,160
   Purchase of aircraft and aircraft engines                   -           (316,600)
                                                 ---------------    ----------------
Net cash provided/(used) by investing activities          17,600           (291,440)

Financing activity -
   Repayment of notes payable                        (1,723,030)         (2,223,190)
                                                 ---------------    ----------------
Net cash used by financing activity                  (1,723,030)         (2,223,190)

Net decrease in cash and cash equivalents              (433,280)           (337,050)

Cash and cash equivalents, beginning of period         1,707,650           2,680,160
                                                 ---------------    ----------------

Cash and cash equivalents, end of period         $     1,274,370    $      2,343,110
                                                 ===============    ================

</table>


The accompanying notes are an integral part of these statements.


<PAGE>



                                AeroCentury Corp.
              Notes to Condensed Consolidated Financial Statements
                                  June 30, 2003
                                    Unaudited

1.       Organization and Summary of Significant Accounting Policies

(a)      Basis of Presentation

         AeroCentury Corp. ("AeroCentury"), a Delaware corporation, uses
leveraged financing to acquire leased aircraft assets. The Company purchases
used regional aircraft on lease to foreign and domestic regional carriers.
Financial information for AeroCentury and its two wholly-owned subsidiaries,
AeroCentury Investments LLC ("AeroCentury LLC") and AeroCentury Investments II
LLC ("AeroCentury II LLC") (collectively, the "Company"), is presented on a
consolidated basis. All intercompany balances and transactions have been
eliminated in consolidation.

         Although the Company believes that it has included all adjustments
necessary for a fair presentation of the interim periods presented and that the
disclosures are adequate to make the information presented not misleading, the
Company suggests that these condensed consolidated financial statements be read
in conjunction with the consolidated financial statements and related notes
included in the Company's annual report on Form 10-KSB for the fiscal year ended
December 31, 2002.

 (b)     Capitalization

         In 1998, in connection with the adoption of a stockholder rights plan,
the Company filed a Certificate of Designation, setting forth the rights,
preferences and privileges of a new Series A Preferred Stock. Pursuant to the
plan, the Company issued rights to its stockholders, giving each stockholder the
right to purchase one one-hundredth of a share of Series A Preferred Stock for
each share of Common Stock held by the stockholder. Such rights are exercisable
only under certain circumstances concerning a proposed acquisition or merger of
the Company.

         As discussed above, AeroCentury is the sole member and manager of
AeroCentury LLC and AeroCentury II LLC.

(c)      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
reserves and security deposits and generally are subject to withdrawal
restrictions.

         At June 30, 2003, the Company held security deposits of $2,230,850,
refundable maintenance reserves received from lessees of $351,620 and
non-refundable maintenance reserves of $5,262,150.

         The Company's leases are typically structured so that if any event of
default occurs under a lease, the Company may apply all or a portion of the
lessee's security deposit to cure such default. If such application of the
security deposit is made, the lessee typically is required to replenish and
maintain the full amount of the deposit during the remaining term of the lease.
All of the security deposits currently held by the Company are refundable to the
lessee at the end of the lease, upon satisfaction of all lease terms.



<PAGE>



                                AeroCentury Corp.
                   Notes to Consolidated Financial Statements
                                  June 30, 2003
                                    Unaudited

1. Organization and Summary of Significant Accounting Policies (continued)

(c) Cash and Cash Equivalents/Deposits (continued)

         Maintenance reserves which are refundable to the lessee at the end of
the lease may be retained by the Company if such amounts are necessary to meet
the return conditions specified in the lease and, in some cases, to satisfy any
other payments due under the lease.

         Non-refundable maintenance reserves held by the Company are accounted
for as a liability until the aircraft has been returned at the end of the lease,
at which time the Company evaluates the adequacy of the remaining reserves in
light of maintenance to be performed as a result of hours flown. At that time,
any excess is recorded as income. When an aircraft is sold, any excess
non-refundable maintenance reserves are recorded as income.

(d)      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 from the date of acquisition), to an estimated
residual value based on appraisal.

(e)      Impairment of Long-lived Assets

         In accordance with Statement of Financial Accounting Standards ("SFAS")
No. 144, "Accounting for the Impairment or Disposal of Long-lived Assets,"
assets are reviewed for impairment whenever events or changes in circumstances
indicate that the book value of the asset may not be recoverable. Periodically,
the Company reviews its long-lived assets for impairment based on third party
valuations. In the event such valuations are less than the recorded value of the
assets, the assets are written down to their estimated realizable value.

 (f)     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.

(g)      Maintenance Reserves and Accrued Costs

         Maintenance costs under the Company's triple net leases are generally
the responsibility of the lessees. Maintenance reserves and accrued costs in the
accompanying balance sheet include refundable and non-refundable maintenance
payments received from lessees. The Company periodically reviews maintenance
reserves for adequacy in light of the number of hours flown, airworthiness
directives issued by the manufacturer or government authority, and the return
conditions specified in the lease. As a result of such review, when it is
probable that the Company has incurred costs for maintenance in excess of
amounts received from lessees, the Company accrues its share of costs for work
to be performed as a result of hours flown. At June 30, 2003, the Company had
accrued maintenance costs of approximately $2,131,000 related to several of its
aircraft.



<PAGE>



                                AeroCentury Corp.
                   Notes to Consolidated Financial Statements
                                  June 30, 2003
                                    Unaudited

1. Organization and Summary of Significant Accounting Policies (continued)

(h)      Income Taxes

         The Company follows the liability method of 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.

(i)      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.

(j)      Use of Estimates

         The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosures of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.

         The most significant estimates with regard to these financial
statements are the residual values of the aircraft, the useful lives of the
aircraft, the estimated amount and timing of cash flow associated with each
aircraft that are used to evaluate impairment, if any, and accrued maintenance
costs in excess of amounts received from lessees.

(k)      Comprehensive Income

         The Company does not have any comprehensive income other than the
revenue and expense items included in the consolidated statements of income. As
a result, comprehensive income equals net income for the three months and six
months ended June 30, 2003 and 2002.

(l)      Recent Accounting Pronouncements

         In November 2002, the Financial Accounting Standards Board issued SFAS
Interpretation No. 45, "Guarantor's Accounting and Disclosure Requirements for
Guarantees, Including Indirect Guarantees of Indebtedness of Others" ("FIN 45").
FIN 45 is effective for guarantees issued or modified after December 31, 2002.
The Company has one guarantee, which was issued prior to December 31, 2002.
During the second quarter of 2003, the Company recorded a liability for the
maximum obligation it has assumed under this guarantee and wrote off the related
receivable (Note 5).

     In January 2003, the FASB issued  interpretation FIN No. 46,  Consolidation
of Variable  Interest  Entities  ("FIN No. 46").  FIN No. 46 requires a variable
interest  entity to be  consolidated by a company if that company is the primary
beneficiary of the entity.  A company is a primary  beneficiary if it is subject
to a majority of the risk of loss from the variable interest entity's activities
or entitled to receive a majority of the entity's  residual returns or both. FIN
No. 46 also requires disclosures about variable interest entities that a company
is not  required  to  consolidate  but in  which it has a  significant  variable
interest. The consolidation requirements of FIN No. 46 apply


<PAGE>




                                AeroCentury Corp.
                   Notes to Consolidated Financial Statements
                                  June 30, 2003
                                    Unaudited

1. Organization and Summary of Significant Accounting Policies (continued)

(l)      Recent Accounting Pronouncements (continued)

immediately to variable  interest  entities  created after January 31, 2003. The
consolidation  requirements  apply to existing entities in the first fiscal year
or interim  period  beginning  after June 15,  2003.  Certain of the  disclosure
requirements  apply in all financial  statements  issued after January 31, 2003,
regardless of when the variable  interest  entity was  established.  At June 30,
2003, the Company is a beneficiary of the services of one of its affiliates, the
details of which are  disclosed in Note 6. The Company is  currently  evaluating
the classification of this entity under FIN No. 46.

2.       Aircraft and Aircraft Engines On Operating Leases

         At June 30, 2003, the Company owned five deHavilland DHC-8s, two
deHavilland DHC-7s, three deHavilland DHC-6s, one Fairchild Metro III, two
Shorts SD 3-60s, six Fokker 50s, two Saab 340As and 26 turboprop engines. The
Company did not acquire or sell any aircraft during the first six months of
2003. In May 2003, the Company signed a term sheet for the acquisition of four
Fokker 50 aircraft, which are currently leased to one of the Company's
customers. The Company is in the process of negotiating revised lease terms with
the lessee as well as financing and anticipates completing the acquisition in
the third quarter of 2003.

         At June 30, 2003, one of the Company's aircraft and its two spare
engines, were off lease. The aircraft subsequently was delivered under a new
lease in July 2003. As discussed below, three of the Company's aircraft are in
the process of being returned pursuant to early lease terminations.

         In April 2003, the Company and the lessee for three of the Company's
aircraft signed lease amendments, which cured the lessee's default for rent and
reserves due for the Company's two deHavilland DHC-7 aircraft. The amendments
provided for deferral of the overdue rent and reserves and for payment of such
amounts over time in installments. The Company and the lessee also agreed to
terminate the lease for the third aircraft, a Shorts SD 3-60. All rent and
reserves due for the Shorts SD 3-60 aircraft were paid by the lessee in April
2003 and the Company anticipates that it will accept the aircraft in the third
quarter of 2003, upon completion of the pre-return inspection. The Company has
declared an event of default under the leases for the other two aircraft because
the lessee had failed to pay non-deferred amounts due in June 2003. The Company
is in the process of repossessing the aircraft. As a result, at June 30, 2003,
the Company recorded a bad debt expense of $649,910 for all rent and maintenance
reserves owed, as well as $150,000 for the maximum amount that the Company
guaranteed under a spare parts lease between the lessee and a third-party
maintenance vendor (Note 5). The Company also expensed $33,240 in legal fees
which would have been amortized over the remaining lease term. In addition, the
Company accrued $1,493,560 of maintenance expense for work to bring all three
aircraft up to the return conditions under the leases. Had the lessee performed
the required maintenance during the leases and returned the aircraft under the
required return conditions, these costs would have been borne by the lessee.

         The lease for one of the Company's Fokker 50 aircraft expired in
September 2002, but the lessee, which is in financial difficulty, is required to
continue to pay rent until the aircraft is returned and accepted by the Company,
which is expected to occur in the third quarter of 2003. The Company and the
lessee have signed an agreement regarding the return of the aircraft and the
amounts owed by the lessee. Although the Company holds a security deposit from
this lessee, the amount of the deposit is not sufficient to pay the rent accrued
at June 30, 2003 and reimburse the Company for the estimated maintenance work
which has been and continues to be performed to meet



<PAGE>



                                AeroCentury Corp.
                   Notes to Consolidated Financial Statements
                                  June 30, 2003
                                    Unaudited

2. Aircraft and Aircraft Engines On Operating Leases (continued)

the return conditions of the lease. Therefore, the Company established an
allowance for doubtful accounts in the amount of $100,000 on March 31, 2003 and
an additional allowance in the amount of $150,000 on June 30, 2003. In February
2003, the Company signed a term sheet with another lessee for the re-lease of
this aircraft and expects to deliver the aircraft immediately upon its return
acceptance.

         In April 2003, the Company's Fairchild Metro III aircraft, which was
returned by the original lessee in October 2002 was delivered to a new lessee
for a term of one year, with options to extend for two additional one-year
periods.

         In June 2003, the Company re-leased one of its two Saab 340A aircraft
to a new customer. The second aircraft was re-leased to the same customer in
July.

         The lease for one of the Company's Fokker 50 aircraft has been extended
on a series of short-term extensions through August 15, 2003. The lease for a
second Fokker 50 leased by the same customer has also been extended from its
expiration date in June 2003 to August 15, 2003. The Company and the customer
are currently discussing a long-term extension of both leases.

         In March 2003, the Company and the lessee of one of the Company's
deHavilland DHC-8 aircraft agreed to a short-term extension of the lease through
November 15, 2003, with periodic options to terminate it, and are currently
discussing a long-term extension.

         In May 2003, the Company and the lessee of one of the Company's
deHavilland DHC-6 aircraft agreed to extend the lease to April 30, 2004.

         In May 2003, the Company and the lessee for one of the Company's Fokker
50 aircraft agreed to extend the lease through May 15, 2005.

3.       Notes Payable and Accrued Interest

         The Company's credit facility, originally set to expire on June 28,
2003, bore interest through March 30, 2002, at the Company's option, at either
(i) prime or (ii) LIBOR plus a margin of 200 to 250 basis points depending on
certain financial ratios. The Company's assets, excluding those of AeroCentury
LLC and AeroCentury II LLC, serve as collateral under the facility. On March 7,
2002, the Company and its lenders agreed to modify certain financial covenants
contained in the loan agreement for the facility in order to enable the Company
to continue to take advantage of business opportunities in the current industry
environment of increased market demand for shorter-term leases. The changes,
originally in effect through December 31, 2002, were extended through February
28, 2003. In return for granting such changes, the Company's lenders increased
the margin on the interest rates chosen by the Company from a floating margin to
a fixed margin of 275 basis points, effective March 31, 2002. On March 1, 2003,
the margin returned to its original floating rate.

         In June 2003, the Company reached an agreement with its lenders to
accommodate the departure of one of the participating lenders that had decided
it no longer wished to participate in aviation finance, and to extend the
maturity date of its credit facility from June 28, 2003, until August 28, 2003.
The Company made a repayment to reduce total outstanding indebtedness to
$39,905,000, which was allocated between the two remaining participants. The
credit limit was reduced from $50 million to $40 million for the remaining term.
At the same time, the



<PAGE>



                                AeroCentury Corp.
                   Notes to Consolidated Financial Statements
                                  June 30, 2003
                                    Unaudited

3.       Notes Payable and Accrued Interest (continued)

Company reached agreement with its lenders to amend its credit agreement to make
certain revisions to the financial covenants, relating to net worth and debt
coverage ratios, and age of aircraft collateral, under the facility. The
amendment also provides for a fixed interest rate margin of 275 basis points.

         In accordance with the agreement for the credit facility, the Company
must maintain compliance with certain financial covenants. As a result of the
substantial net loss incurred during the second quarter of 2003, the Company was
out of compliance with a financial ratio covenant on June 30, 2003. The Company
has commenced discussions with the agent bank for the credit facility regarding
a waiver of that covenant. As of June 30, 2003, the Company was in compliance
with all other covenants, $39,905,000 was outstanding under the credit facility,
and interest of $4,920 was accrued.

         The Company and its lenders are continuing to discuss the final terms
of the renewal of the credit facility for an additional two years. The Company
expects to be able to obtain such a renewal prior to expiration of the credit
facility on reasonable market terms. If the Company is unable to secure a
renewal of the credit facility, it likely would have to sell assets in order to
repay its indebtedness under the facility. Such sales would likely not be on
terms favorable to the Company as the full market value of the assets sold may
not be realized by the Company in order to expedite the consummation of the
sales.

         Even if the Company is able to successfully sell a portion of its
assets and use the proceeds to repay the credit facility, if a renewed or
replacement facility is not obtained, the Company's future ability to acquire
assets will be significantly impaired, as this facility is the Company's primary
means of financing acquisitions and no other sources of acquisition financing
are immediately available. Thus, the renewal or replacement of the facility in
an amount equal or greater than the current $40 million limit will be critical
to both the Company's current level of operations and to its asset and revenue
growth.

         In November 1999 the Company acquired two aircraft using cash and bank
financing separate from its credit facility. During 2002, the Company used funds
from its credit facility to repay the outstanding bank financing related to both
aircraft.

         A similar financing was concluded in September 2000, consisting of a
note in the amount of $3,575,000, due April 18, 2003, which bore fixed interest
at 8.36% through April 17, 2003, for the acquisition of a deHavilland DHC-8
aircraft. The note is collateralized by this aircraft and is non-recourse to the
Company. Payments due under the note consisted of monthly principal and interest
and a balloon principal payment due on the maturity date. The balance of the
note payable at June 30, 2003 was $2,362,420 and interest of $3,800 was accrued.
As of June 30, 2003, the Company was in compliance with all covenants of this
loan agreement. The Company and the lessee have agreed to a short-term extension
of the lease through November 15, 2003, with periodic options to terminate it.
At the same time, the lender agreed to extend the financing through March 19,
2006, with borrower prepayment options at June 30, 2003 and November 30, 2003.
During the term of the extension, payments due under the note consist of monthly
principal and interest at the rate of one-month LIBOR plus 3%, with a balloon
payment at maturity. The financing also provides for a six month remarketing
period at the expiration of the lease or if the lease is terminated prior to its
expiration date. Payments due on the financing are reduced during this
remarketing period and the balloon principal payment is due at the end of the
six month period. The Company anticipates that the lessee of this aircraft will
extend the lease through the maturity date of the financing. If the lessee does
not do so, and the Company is unable to re-lease the aircraft within the six
month remarketing period, the Company would have to re-negotiate the financing.
If no such financing were available, the Company likely would have to sell the
aircraft.

<page>

                                AeroCentury Corp.
                   Notes to Consolidated Financial Statements
                                  June 30, 2003
                                    Unaudited

4.       Income Taxes

 The items comprising income tax expense are as follows:
                                              For the Six Months Ended June 30,
                                                   2003                2002
                                                   ----                ----
 Current tax provision:
      Federal                               $        185,660    $             -
      State                                           11,260              6,050
      Foreign                                             -              72,130
                                            ----------------    ---------------
      Current tax provision                          196,920             78,180
                                            ----------------    ---------------

 Deferred tax (benefit)/provision:
      Federal                                      (945,170)            216,960
      State                                         (59,240)            (2,260)
                                            ----------------    ---------------
      Deferred tax (benefit)/provision           (1,004,410)            214,700
                                            ----------------    ---------------
 Total (benefit)/provision for income taxes $      (807,490)    $       292,880
                                            ================    ===============

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


                                              For the Six Months Ended June 30,
                                                   2003                2002
                                                   ----                ----



     Income tax (benefit)/expense at        $      (756,020)    $       291,540
     statutory federal income tax rate
     State taxes net of federal benefit              (9,750)              7,260
     Tax rate differences                           (41,720)            (5,920)
                                            ----------------    ---------------
   Total income tax (benefit)/expense       $      (807,490)    $       292,880
                                            ================    ===============


         Temporary differences and carryforwards that gave rise to a significant
portion of deferred tax assets and liabilities as of June 30, 2003 are as
follows:

         Deferred tax assets:
              Allowance for doubtful accounts                 $         86,100
              Deferred maintenance                                     776,740
              Maintenance reserves                                   1,868,440
              Prepaid rent and other                                    66,590
                                                              ----------------
                  Deferred tax assets                                2,797,870
         Deferred tax liabilities:
              Depreciation on aircraft and aircraft engines        (5,316,970)
              Unearned income                                         (17,010)
              Other                                                  (222,320)
                                                              ----------------
                  Net deferred tax liabilities                $    (2,758,430)
                                                              ================

         No valuation allowance is deemed necessary, as the Company anticipates
generating adequate future taxable income to realize the benefits of all
deferred tax assets on the balance sheet.



<PAGE>



                                AeroCentury Corp.
                   Notes to Consolidated Financial Statements
                                  June 30, 2003
                                    Unaudited

5.       Commitments and Contingencies

         In connection with the re-lease of two of the Company's aircraft, the
Company guaranteed, up to a maximum amount of $150,000, the lessee's payments
under a contract with a third party vendor for spare parts. The agreement
provides for the lessee to reimburse the Company for any payments made under the
guarantee, upon demand by the Company. If the lessee does not make such
reimbursements or does not comply with any provisions of the parts agreement,
the Company may declare an event of default under the leases. As discussed in
Note 2, the Company has declared the lessee in default of its payment
obligations under its leases. At June 30, 2003, the lessee owed the vendor an
amount in excess of the guaranty. The Company believes that it will have to pay
the guaranteed amount to the vendor and that it will not be reimbursed by the
lessee. Therefore, the Company has written off the $150,000 as bad debt expense
at June 30, 2003.

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 JetFleet Management Corp. ("JMC"), which is an integrated
aircraft management, marketing and financing business and a subsidiary of
JetFleet Holding Corp. ("JHC"). Certain officers of the Company are also
officers of JHC and JMC and hold significant ownership positions in both JHC and
the Company. Under the management agreement, JMC receives a monthly management
fee based on the net asset value of the assets under management. JMC may also
receive an acquisition fee for locating assets for the Company, provided that
the aggregate purchase price, including chargeable acquisition costs and any
acquisition 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, acquisition fees and remarketing fees may
not exceed the customary and usual fees that would be paid to an unaffiliated
party for such services. The Company recorded management fees of $967,630 and
$837,650 during the six months ended June 30, 2003 and 2002, respectively.
Because the Company did not acquire any aircraft during the first six months of
2003 or 2002, no acquisition fees were paid to JMC. No remarketing fees were
accrued to JMC during 2003 or 2002.

7.       Subsequent Events

         The lease for one of the Company's Fokker 50 aircraft has been extended
on a series of short-term extensions. In July 2003, the lease was extended
through August 15, 2003. At the same time, the lease for a second Fokker 50
leased by the same customer was also extended to the same date. The Company and
the customer are currently discussing a long-term extension of both leases.













<PAGE>



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

Critical Accounting Policies

In response to the Securities and Exchange Commission's Release No. 33-8040,
"Cautionary Advice Regarding Disclosure About Critical Accounting Policies", the
Company has identified the most critical accounting policies upon which its
financial status depends. It determined the critical policies by considering
those that involve the most complex or subjective decisions or assessments. The
Company identified these policies to be those related to lease rental revenue
recognition, depreciation policies, valuation of aircraft and maintenance
reserves and accrued costs.

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.

Depreciation Policies

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 from the date of acquisition), to an estimated
residual value based on appraisal.

Valuation of Aircraft

In accordance with Statement of Financial Accounting Standards ("SFAS") No. 144,
"Accounting for the Impairment or Disposal of Long-lived Assets," assets are
reviewed for impairment whenever events or changes in circumstances indicate
that the book value of the asset may not be recoverable. Periodically, the
Company reviews its long-lived assets for impairment based on third party
valuations. In the event such valuations are less than the recorded value of the
assets, the assets are written down to their estimated realizable value.

Maintenance Reserves and Accrued Costs

Maintenance costs under the Company's triple net leases are generally the
responsibility of the lessees. Maintenance reserves and accrued costs in the
accompanying balance sheet include refundable and non-refundable maintenance
payments received from lessees. The Company periodically reviews maintenance
reserves for adequacy in light of the number of hours flown, airworthiness
directives issued by the manufacturer or government authority, and the return
conditions specified in the lease. As a result of such review, when it is
probable that the Company has incurred costs for maintenance in excess of
amounts received from lessees, the Company accrues its share of costs for work
to be performed as a result of hours flown.

Results of Operations

a.       Revenues

Operating lease revenue was approximately $214,000 higher in the six months
ended June 30, 2003 versus the same period in 2002 primarily because of lease
revenue from aircraft purchased during the second half of 2002 and from the
re-lease of several aircraft which had been off lease during a portion of the
first six months of 2002. These increases more than offset a decrease in
operating lease revenue resulting from lower overall lease rates and aircraft
off lease during 2003. Operating lease revenue was approximately $44,000 lower
in the three months ended June 30, 2003 versus the same period in 2002 primarily
due to lower overall lease rates and aircraft off lease during 2003, the effect
of which was partially offset by the increase in operating lease revenue from
aircraft purchased during the second half of 2002. Other income was lower by
approximately $13,000 and $6,000 during the six months and three months ended
June 30, 2003, respectively, versus the same periods in 2002 because of lower
interest rates earned on lower cash balances during 2003.

<page>

b.       Expense items

Management fees, which are calculated on the net book value of the aircraft
owned by the Company, were approximately $130,000 and $64,000 higher in the six
months and three months ended June 30, 2003, respectively, versus the same
periods in 2002 as a result of the purchase of two aircraft during the second
half of 2002, the effect of which was partially offset by the effect of
depreciation decreasing the net book value of the entire portfolio. Depreciation
was approximately $314,000 and $154,000 higher in the six months and three
months ended June 30, 2003, respectively, versus 2002 as a result of the 2002
aircraft purchases.

Interest expense was approximately $15,000 higher in the six months ended June
30, 2003 versus the same period in 2002 because of a higher average principal
balance during 2003, the effect of which was partially offset by lower average
interest rates during 2003. Interest expense was approximately $28,000 lower in
the three months ended June 30, 2003 versus the same period in 2002 because of
lower average interest rates during 2003, the effect of which was partially
offset by a higher average principal balance.

Maintenance expense was approximately $1,612,000 and $1,588,000 higher in the
six months and three months ended June 30, 2003, respectively, compared to 2002,
primarily due to work which must be performed on three aircraft which are in the
process of being returned early by the lessee that has been declared in default
of its payment obligations under its leases. Such work would have been borne by
the lessee if the lessee had performed the required maintenance during the
leases and returned the aircraft under the required return conditions.

Bad debt expense was approximately $1,050,000 and $950,000 in the six months and
three months ended June 30, 2003 versus no such expenses in 2002. In June 2003,
the Company recorded bad debt expense of approximately $650,000 for all rent and
maintenance reserves owed by a lessee, mentioned above, which defaulted on its
payment obligations under leases for three aircraft. The Company also expensed
$150,000, which is the maximum amount that the Company guaranteed under a spare
parts lease between the lessee and a third-party maintenance vendor. The Company
also expensed $100,000 and $150,000 in March and June 2003, respectively,
related to a portion of the amounts due from another lessee for rent and
maintenance, which has been and continues to be performed to meet the return
conditions of the lease. Although the Company holds a security deposit from this
lessee, the amount of the deposit is not sufficient to pay the estimated amounts
due.

Professional fees and general and administrative expenses were approximately
$160,000 and $73,000 higher in the six months and three months ended June 30,
2003, respectively, versus 2002, primarily due to higher legal expense as a
result of increased recurring costs and the amount of fees which would have been
amortized over the remaining lease term, but which were written off in
connection with the lessee default mentioned above. Accounting expense and
premiums for aircraft and directors and officers insurance were also higher in
2003.

The Company's effective tax rates in the six months and three months ended June
30, 2003 were approximately 36% and 35%, respectively, versus 34% and 35% for
the six months and three months ended June 30, 2002, respectively. The change in
rate for the six month periods from year to year was primarily a result of the
recognition of tax benefits relating to different state tax rates than had
previously been accrued.

Liquidity and Capital Resources

The Company is currently financing its assets primarily through credit facility
borrowings, special purpose financing and excess cash flow.



<PAGE>



a.       Credit facility

The Company's credit facility, originally set to expire on June 28, 2003, bore
interest through March 30, 2002, at the Company's option, at either (i) prime or
(ii) LIBOR plus a margin of 200 to 250 basis points depending on certain
financial ratios. On March 7, 2002, the Company and its lenders agreed to modify
certain financial covenants contained in the loan agreement for the facility in
order to enable the Company to continue to take advantage of business
opportunities in the current industry environment of increased market demand for
shorter-term leases. The changes, originally in effect through December 31,
2002, were extended through February 28, 2003. In return for granting such
changes, the Company's lenders increased the margin on the interest rates chosen
by the Company from a floating margin to a fixed margin of 275 basis points,
effective March 31, 2002. On March 1, 2003, the margin returned to its original
floating rate.

In June 2003, the Company reached an agreement with its lenders to accommodate
the departure of one of the participating lenders that had decided it no longer
wished to participate in aviation finance, and to extend the maturity date of
its credit facility from June 28, 2003, until August 28, 2003. The Company made
a repayment to reduce total outstanding indebtedness to $39,905,000, which was
allocated between the two remaining participants. The credit limit was reduced
from $50 million to $40 million for the remaining term. At the same time, the
Company reached agreement with its lenders to amend its credit agreement to make
certain revisions to the financial covenants, relating to net worth and debt
coverage ratios, and age of aircraft collateral, under the facility. The
amendment also provides for a fixed interest rate margin of 275 basis points.

In accordance with the agreement, the Company must maintain compliance with
certain financial covenants. As a result of the substantial net loss incurred
during the second quarter of 2003, the Company was out of compliance with a
financial ratio covenant on June 30, 2003. The Company has commenced discussions
with the agent bank for the credit facility regarding a waiver of that covenant.
If a waiver is refused, the agent bank could declare the credit facility in
default and accelerate the debt repayment and/or force the Company to liquidate
its assets. The Company, however, anticipates that no such action will be taken
by the agent bank so long as negotiation of the renewed credit facility
continues. As of June 30, 2003, the Company was in compliance with all other
covenants, $39,905,000 was outstanding under the credit facility, and interest
of $4,920 was accrued.

The Company and its lenders are continuing to discuss the final terms of the
renewal of the credit facility for an additional two years. The Company expects
to be able to obtain such facility at reasonable market terms, which will
include a revised financial ratio covenant that will resolve the Company's
current non-compliance. If the Company is unable to secure such a renewal of the
credit facility, it likely would have to sell assets in order to repay its
indebtedness under the facility. Such sales would likely not be on favorable
terms to the Company as the full market value of the assets sold may not be
realized by the Company in order to expedite the consummation of the sales.

Even if the Company is able to successfully sell a portion of its assets and use
the proceeds to repay the credit facility, if a renewed or replacement facility
is not obtained, the Company's future ability to acquire assets will be
significantly impaired, as this facility is the Company's primary means of
financing acquisitions and no other sources of acquisition financing are
immediately available. Thus, the renewal or replacement of the facility in an
amount equal or greater than the current $40 million limit will be critical to
the Company's asset and revenue growth.

The Company's interest expense generally moves up or down with the prevailing
interest rates, as the Company has not entered into any interest rate hedge
transactions for the credit facility indebtedness. Because aircraft owners
seeking financing generally can obtain financing through either leasing
transactions or traditional secured debt financings, prevailing interest rates
are a significant factor in determining market lease rates, and market lease
rates generally move up or down with prevailing interest rates, assuming supply
and demand of the desired equipment remain constant. However, because lease
rates for the Company's assets typically are fixed under existing leases, the
Company usually does not experience any positive or negative impact in revenue
from changes in market lease rates due to interest rate changes until existing
leases have terminated.

<page>

b. Special purpose financing

In November 1999, AeroCentury LLC acquired two aircraft using cash and bank
financing separate from its credit facility. During 2002, the Company used funds
from its credit facility to repay the outstanding bank financing related to both
aircraft.

A similar financing was concluded in September 2000, consisting of a note in the
amount of $3,575,000, due April 18, 2003, which bore fixed interest at 8.36%
through April 17, 2003, for the acquisition of a deHavilland DHC-8 aircraft. The
note is collateralized by this aircraft and is non-recourse to the Company.
Payments due under the note consisted of monthly principal and interest and a
balloon principal payment due on the maturity date. The balance of the note
payable at June 30, 2003 was $2,362,420 and interest of $3,800 was accrued. As
of June 30, 2003, the Company was in compliance with all covenants of this loan
agreement. The Company and the lessee have agreed to a short-term extension of
the lease through November 15, 2003, with periodic options to terminate it. At
the same time, the lender agreed to extend the financing through March 19, 2006,
with borrower prepayment options at June 30, 2003 and November 30, 2003. During
the term of the extension, payments due under the note consist of monthly
principal and interest at the rate of one-month LIBOR plus 3%, with a balloon
payment at maturity. The financing also provides for a six month remarketing
period at the expiration of the lease or if the lease is terminated prior to its
expiration date. Payments due on the financing are reduced during this
remarketing period and the balloon principal payment is due at the end of the
six month period. The Company believes it will have sufficient cash to meet the
reduced payment obligations required by the lender if the lease is terminated,
assuming that the aircraft is re-leased within six months, which the Company
believes is a reasonable period. The Company anticipates that the lessee of this
aircraft will extend the lease through the maturity date of the financing. If
the lessee does not do so, and the Company is unable to re-lease the aircraft
within the six month remarketing period, the Company would have to re-negotiate
the financing or refinance the loan using the Company's credit facility. If no
such financing were available, the Company likely would have to sell the
aircraft.

c.       Cash flow

The Company's primary source of revenue is lease rentals of its aircraft assets.
It is the Company's policy to monitor each lessee's needs in periods before
leases are due to expire. If it appears that a customer 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 the time that an asset will be "off-lease." The Company's aircraft are
subject to leases with varying expiration dates through June 2007.

Although the Company has experienced a significant net loss for the six months
and three months ended June 30, 2003, given the varying lease terms and
expiration dates for the aircraft in the Company's portfolio as well as the
anticipated timing of certain maintenance work to be performed, assuming that
its credit facility is renewed for two years under market terms, management
believes that the Company will have adequate cash flow to meet its on-going
operational needs.

The Company's cash flow from operations for the six months ended June 30, 2003
versus the six months ended June 30, 2002 decreased by approximately $932,000.
The decrease was due primarily to the effect of the change in net income,
deposits and deferred taxes. The effect of these changes was partially offset by
the positive effect of the change in accounts receivable, accounts payable and
accrued expenses and maintenance deposits and accrued costs.

No cash flow was used for equipment purchases during the six months ended June
30, 2003. Equipment purchases of $316,600, for equipment added to aircraft
already owned, were made in the six months ended June 30, 2002. The decrease in
cash flow used by financing activities from year to year was primarily a result
of lower repayments on the Company's credit facility in 2003 versus 2002.



<PAGE>



Outlook

The Company's near-term focus will be on renewing its credit facility, which
expires on August 28, 2003. Additionally, the Company will be seeking to
increase its credit limit under the facility to $50 million. This will likely
require the addition of a lender to the current loan participant group. The
Company is in ongoing discussions with the agent bank on these matters, and
anticipates that it will be able to renew the facility in advance of the August
28, 2003 expiration date. Based on its discussions with a potential third
participant, the Company believes that the credit facility will be returned to
its $50 million limit at the same time that the credit facility is renewed.

As discussed above in "Liquidity and Capital Resources," as a result of its
substantial net loss for the second quarter, the Company is currently out of
compliance with a debt coverage ratio financial covenant under its credit
facility agreement. The Company is seeking a waiver of that covenant from the
agent bank, and anticipates that it will receive such a waiver and that further,
under the renewed credit facility, the covenant in question will be revised to
take into account the Company's current financial circumstances.

If the Company is unable to secure a renewal of the credit facility, it likely
would have to sell assets in order to repay its indebtedness under the facility.
See "Factors that May Affect Future Results - Renewal of the Credit Facility,"
below.

The Company has one aircraft financed under a special purpose financing,
separate from the credit facility. The loan is collateralized by the financed
aircraft and is non-recourse to the Company. The current loan agreement provides
for a maturity date of March 19, 2006, with prepayment options at June 30, 2003,
and November 30, 2003. The lease for the financed aircraft expires on November
15, 2003. The Company anticipates that the lessee of this aircraft will extend
the lease through the maturity date of the financing. If the lessee does not do
so, the Company will be required to find another lessee or sell the aircraft.
See "Factors that May Affect Future Results - Special Purpose Financing; Lessee
Renewal," below.

The default by a Haitian lessee combined with the weak credit position of a
Brazilian lessee significantly affected the Company's results for the second
quarter. The Company does not believe that it will experience similar events
with other lessees of the Company in the near term. If, however, the aircraft
industry weakens further, this may affect the performance of lessees that
currently appear creditworthy. See "Factors that May Affect Future Results -
General Economic Conditions," below.

The Company anticipates that the return of two DHC-7 aircraft from Haiti may
require a significant amount of time to repossess and prepare for remarketing.
Further, the Company believes that the aircraft, once ready, will be relatively
difficult to re-lease based on prior experience with this type of aircraft.
Therefore, the Company anticipates that a substantial amount of time may be
required to return these DHC-7 aircraft into revenue-generating status. See
"Factors that May Affect Future Results - Repossession of Haitian Lessee
Aircraft," below.

The Brazilian lessee has agreed to sign a note, in an amount equal to the rent
and maintenance in excess of the security deposit held by the Company, at the
time the aircraft is delivered to the Company, The Company has recorded an
allowance against the amounts receivable and believes that such allowance is
sufficient.

The current lease rates for the Company's aircraft are depressed due to the
weakened financial condition of the airline industry, and the Company does not
foresee a recovery in lease rates in the short term. Therefore, as older leases
expire and are replaced by renewals or re-leases to new customers at current
market rates, it is likely that overall lease revenues will decline further. In
the near term, the Company anticipates that revenue growth will likely only
occur through acquisition of new leased assets, which will likely only occur
after the credit facility is renewed and enlarged, if possible, to $50 million.
See "Factors that May Affect Future Results - Renewal of Credit Facility" below.


The Company continues to review its asset valuations in light of the worldwide
economic downturn. Although the Company did not make any valuation adjustments
during 2002 or the first half of 2003, any future adjustments, if necessary,
would negatively affect the Company's financial results and the collateral
available for the Company's credit facility. In addition, the Company's periodic
review of the adequacy of its maintenance reserves, as well as routine and
manufacturer-required maintenance for off-lease aircraft, may result in changes
to estimated maintenance expense, further reducing earnings.

<page>

Factors that May Affect Future Results

Renewal of the Credit Facility. As discussed in "Outlook" above, the Company's
credit facility will expire on August 28, 2003. If the Company is not able to
renew the credit facility for the full outstanding amount, and cannot find
suitable alternative financing, it may be required to make a principal repayment
of the outstanding balance, or that portion of the balance for which replacement
financing is not obtained. The Company does not have sufficient cash reserves to
make a repayment of a significant portion of the outstanding credit facility
indebtedness and would be forced to sell assets in order to raise funds to make
such repayment. Such sales would likely not be on favorable terms to the Company
as the full market value of the assets sold may not be realized by the Company
in order to expedite the sales.

Even if the Company is able to successfully sell a portion of its assets and use
the proceeds to make a required repayment under the credit facility, if a
renewed or replacement facility is not obtained, the Company's future ability to
acquire assets would be significantly impaired, as the credit facility is the
Company's primary means of financing acquisitions and no other sources of
acquisition financing are immediately available. Thus the renewal or replacement
of the Company's credit facility in an amount at least equal to the current $40
million limit will be critical to the Company's liquidity. The increase of the
credit limit to $50 million will be critical for the Company's asset and revenue
growth.

Credit Facility Repayment Obligations. If a significant portion of the
collateral base goes off-lease for an extended period of time (see "Ownership
Risks" below), this could trigger a covenant default and an obligation to repay
a portion of the outstanding indebtedness under the credit facility. While the
Company currently does not anticipate that it will be required to make any
repayments in the near term, this belief is based on certain assumptions
regarding renewal of existing leases, a lack of extraordinary interest rate
increases, no lessee defaults or bankruptcies, and certain other matters that
the Company deems reasonable in light of its experience in the industry. There
can be no assurance that these assumptions will turn out to be correct. If the
assumptions do not prove to be true, and the Company has not obtained an
applicable waiver or amendment of applicable covenants from its lenders to deal
with the situation, the Company may have to sell a significant portion of its
portfolio in order to maintain compliance with the covenants, or, if that is not
possible, default on its credit facility.

Repossession of Haitian Lessee Aircraft. As discussed in Note 2 to the Company's
June 30, 2003 Consolidated Financial Statements, above, the Company has declared
a default under the lease for two DHC-7 aircraft leased to a Haitian carrier.
The Company is currently in the process of exercising its legal remedies to
repossess the aircraft from the lessee. Because the lessee and the aircraft are
located in a foreign country, there is risk that the repossession procedure will
not be as promptly or as easily accomplished as would be the case if this were a
U.S. lessee (See, "International Risks" and "Risks Related to Regional Carriers"
below). Any delay in regaining possession of the aircraft will necessarily delay
the Company's ability to prepare the aircraft for remarketing and will prevent
the Company from earning any revenue with respect to these aircraft. Further,
the repossession procedure may require substantial legal, logistical and other
related costs to the Company, which at this time cannot be calculated.

The two aircraft being repossessed are special purpose aircraft, with short
take-off and landing abilities, which make them attractive to specific niche
operators. Because they have four engines, however, they are relatively more
expensive to operate than other two- engine 50-passenger turboprop aircraft and,
therefore, unattractive to operators not requiring the aircraft's special
characteristics. Thus, it has been the Company's experience that the remarketing
period for DHC-7 aircraft may be significantly longer than for other similar
turboprop aircraft. Consequently, a significant amount of time may pass before
the DHC-7 aircraft begin to generate cash flow for the Company.

<page>

General Economic Conditions. The Company's business is dependent upon general
economic conditions and the strength of the travel and transportation industry.
The industry is experiencing a cyclical downturn which began in mid-2001. This
downturn was exacerbated by the terrorist attacks of September 11, 2001. More
recently, fears surrounding Severe Acute Respiratory Syndrome ("SARS") caused a
reduction in airline passenger loads, particularly in markets where the outbreak
is concentrated, from which the affected carriers have not yet fully recovered.
As a result, there continues to be a severe reduction in air travel and less
demand for aircraft capacity by the major air carriers. The duration of the
downturn is uncertain.

The Company's lessees and targeted potential lessees have been primarily outside
the U.S. If those lessees experience financial difficulties, this could, in
turn, affect the Company's financial performance. It appears that the downturn
has had an impact on some non-U.S. regional carriers, but it remains to be seen
how widespread the impact will be and how severely such carriers will be
affected. It is possible that in certain instances, current economic
circumstances may favor the Company, in that planned aircraft replacements for
the Company's leased aircraft by its lessees may be cancelled or postponed,
resulting in greater likelihood of renewals by existing lessees. Further, demand
for more economically operated turboprop aircraft, which make up the Company's
portfolio, relative to the more expensive new regional jets, may increase (see
"Leasing Risks" below). However, there can be no assurance that the Company will
realize any increase in renewals of existing leases or experience an increase in
demand for turboprop aircraft.

Since regional carriers are generally not as well-capitalized as major air
carriers, the downturn may result in the increased possibility of an economic
failure of one or more of the Company's lessees. The combined effect of
decreased air travel, further weakening of the industry as a result of
subsequent threats of attacks similar to the September 11 events, an increase in
the price of jet fuel due to fears of hostilities, and increased costs and
reduced operations by air carriers due to new security directives, depending on
their scope and duration, could have a material adverse impact on the Company's
lessees and thus the Company's results.

At this time, in response to lower passenger loads, many carriers have reduced
capacity, and as a result there has been a reduced demand for aircraft. As a
result, market lease rental rates have decreased. This reduced market value for
aircraft could affect the Company's results if the market value of an asset or
assets in the Company's aircraft portfolio falls below book value, and the
Company determines that a write-down of the value on the Company's book is
appropriate. Furthermore, as older leases expire and are replaced by lease
renewals or re-leases at current depressed rates, the lease revenue of the
Company on its existing portfolio is likely to decline, with the magnitude of
the decline dependent on the length of the downturn and the depth of the decline
in market rents.

Special Purpose Financing; Lessee Renewal. The Company has one aircraft financed
under special purpose financing, separate from the credit facility. The financed
aircraft is the sole recourse collateral for the loan. Under the loan agreement,
the maturity date of the loan is March 19, 2006. Currently, the lease for the
aircraft expires on November 30, 2003. If the lessee does not renew the lease,
the Company will have a six-month remarketing period, beginning at the
expiration of the lease. If the Company is unable to re-lease the aircraft
within the six-month remarketing period, the Company would have to re-negotiate
the financing. If the Company is unable to obtain such financing, it likely
would have to sell the aircraft in order to repay the special purpose financing
by the maturity date. There is no assurance that a sale under those terms would
yield a purchase price sufficient to repay the special purpose loan from the
sales proceeds.

Risks of Debt Financing. The Company's use of acquisition financing under its
credit facility and its special purpose financings subjects the Company to
increased risks of leveraging. If, due to a lessee default, the Company is
unable to repay the debt secured by the aircraft acquired, then the Company
could lose title to the acquired aircraft in a foreclosure proceeding. With
respect to the credit facility, the loans are secured by the Company's existing
assets as well as the assets acquired with each financing. Any default under the
credit facility could result in foreclosure upon not only the asset acquired
using such financing, but also the existing assets of the Company securing the
loan.

All of the Company's current credit facility indebtedness carries a floating
interest rate based upon either the lender's prime rate or a floating LIBOR
rate. Interest rates are currently at historically low levels and this has
partially offset the effect of falling market lease rates. If interest rates
rise, and lease rates do not increase at the same time, the Company would
experience lower net revenues and, if the interest rate increase were great
enough, may not be able to cover its interest expense with lease revenue.

<page>

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 involves a number of risks. Demand for lease or purchase of the
assets depends on the economic condition of the airline industry which is, in
turn, sensitive to general economic conditions. The ability to remarket
equipment at acceptable rates may depend on the demand and market values at the
time of remarketing. 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 reflects economic conditions and the strength of the
travel and transportation industry. The demand for and value of many types of
used 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 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
airframe or engine types should decline in value. If "regional jets" were to be
used on short routes previously served by turboprops, even though regional jets
are more expensive to operate than turboprops, the demand for turboprops could
lessen. This could result in lower lease rates and values for the Company's
existing turboprop aircraft.

Lessee Credit Risk. If a customer defaults upon its lease obligations, the
Company may be limited in its ability to enforce remedies. Most of the Company's
lessees are small 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 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 be further adversely affected by a declaration of
bankruptcy by a defaulting lessee.

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 is subject to certain risks. First, some of the lessees in the regional air
carrier market are 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. These types of lessees result in a generally higher lease
rate on aircraft, but may entail higher risk of default or lessee bankruptcy.
The Company evaluates the credit risk of each lessee carefully, and attempts to
obtain a third party guaranty, letters of credit or other credit enhancements,
if it deems them 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 in the United States.

Reliance on JMC. All management of the Company is performed by JMC under a
management agreement which is in its seventh year of a 20-year term and provides
for an asset-based management fee. JMC is not a fiduciary to the Company or its
stockholders. The Company's Board of Directors, however, has ultimate control
and supervisory responsibility over all aspects of the Company and owes
fiduciary duties to the Company and its stockholders. In addition, while JMC may
not owe any fiduciary duties to the Company by virtue of the management
agreement, the officers of JMC are also officers of the Company, and in that
capacity owe fiduciary duties to the Company and the stockholders by virtue of
holding such offices with the Company. In addition, certain officers of the
Company hold significant ownership positions in JHC and the Company. JMC is also
the management company for two other aircraft portfolio owners, JetFleet III,
which raised approximately $13,000,000 from investors, and AeroCentury IV, Inc.
("AeroCentury IV"), which raised approximately $5,000,000 from investors.
JetFleet III and AeroCentury IV are in the liquidation or wrap-up phase. In the
first quarter of 2002, AeroCentury IV defaulted on certain obligations to
noteholders. The indenture trustee for AeroCentury IV's noteholders has
foreclosed and has taken over management of the remaining two assets. JetFleet
III is in compliance with the terms of its trust indenture.

<page>

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. All 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 are less than the entire anticipated
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 sell the asset after the expiration
of the initial lease term. Some of the factors that have an impact on the
Company's ability to re-lease or 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 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.

International Risks. The Company has focused on leases in overseas markets,
which the Company believes present 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 than 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 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 an aircraft in the event
that a foreign lessee defaults.

A lease with a foreign lessee is subject to risks related to the economy of the
country or region in which such lessee is located, which may be weaker than the
U.S. economy. On the other hand, a foreign economy may remain strong even though
the U.S. economy does not. A foreign economic downturn may 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 to currency conversion fluctuations. Although the Company's current
leases are all payable in U.S. dollars, the Company may agree in the future to
leases that permit payment in foreign currency, which would subject such lease
revenue to monetary risk due to currency fluctuations. Even with U.S.
dollar-denominated lease payment provisions, the Company could still be affected
by a devaluation of the lessee's local currency that would make it more
difficult for a lessee to meet its U.S. dollar-denominated lease payments,
increasing the risk of default of that lessee, particularly if its 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 and
cost of complying with such requirements will fall primarily upon lessees of
equipment, there can be no assurance that the cost will not fall on the Company.
Furthermore, future government regulations could cause the value of any
non-complying equipment owned by the Company to decline substantially.

<page>

Competition. The aircraft leasing industry is highly competitive. The Company
competes 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 JMC's experience and operational efficiency in
identifying and obtaining financing for the transaction types desired by
regional air carriers. This market segment, which is characterized by
transaction sizes of less than $10 million and lessee credits that may be
strong, but are generally unrated, is not well served by the Company's larger
competitors in the aircraft industry. JMC 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, however, 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, may be named in a suit claiming damages for injuries or damage to
property caused by its assets. As a triple net lessor, the Company is generally
protected against such claims, since the lessee would be responsible for, insure
against and indemnify the Company for, such claims. Further, some protection may
be provided by the United States Aviation Act with respect to its aircraft
assets. It is, however, 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. Also, although the Company's leases generally require a
lessee to insure against likely risks, there may be certain cases where the loss
is not entirely covered by the lessee or its insurance. Though this is a remote
possibility, 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, as well as
a potential claim directly against the Company.

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 1.5 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.

Item 3. Controls and Procedures

Quarterly evaluation of the Company's Disclosure Controls and Internal Controls.
As of the end of the period covered by this report, the Company evaluated the
effectiveness of the design and operation of its "disclosure controls and
procedures" ("Disclosure Controls"), and its "internal control over financial
reporting" ("Internal Controls"). This evaluation (the "Controls Evaluation")
was done under the supervision and with the participation of management,
including the Company's Chief Executive Officer ("CEO") and Chief Financial
Officer ("CFO"). Rules adopted by the SEC require that in this section of the
Report the Company present the conclusions of the CEO and the CFO about the
effectiveness of our Disclosure Controls and Internal Controls based on and as
of the date of the Controls Evaluation.

CEO and CFO Certifications. Attached as exhibits to this report are two separate
forms of "Certifications" of the CEO and the CFO. The first form of
Certification is required in accordance with Section 302 of the Sarbanes-Oxley
Act of 2002 (the "Section 302 Certification"). This section of the report which
you are currently reading is the information concerning the Controls Evaluation
referred to in the Section 302 Certifications and this information should be
read in conjunction with the Section 302 Certifications for a more complete
understanding of the topics presented.

<page>

Disclosure Controls and Internal Controls. Disclosure Controls are procedures
that are designed with the objective of ensuring that information required to be
disclosed in the Company's reports filed under the Securities Exchange Act of
1934 (the "Exchange Act"), such as this report, is recorded, processed,
summarized and reported within the time periods specified in the Securities and
Exchange Commission's ("SEC") rules and forms. Disclosure Controls are also
designed with the objective of ensuring that such information is accumulated and
communicated to the Company's management, including the CEO and CFO, as
appropriate to allow timely decisions regarding required disclosure. Internal
Controls are procedures which are designed with the objective of providing
reasonable assurance that (1) the Company's transactions are properly
authorized; (2) the Company's assets are safeguarded against unauthorized or
improper use; and (3) the Company's transactions are properly recorded and
reported, all to permit the preparation of the Company's financial statements in
conformity with generally accepted accounting principles.

Limitations on the Effectiveness of Controls. The Company's management,
including the CEO and CFO, does not expect that its Disclosure Controls or its
Internal Controls will prevent all error and all fraud. A control system, no
matter how well conceived and operated, can provide only reasonable, not
absolute, assurance that the objectives of the control system are met. Further,
the design of a control system must reflect the fact that there are resource
constraints, and the benefits of controls must be considered relative to their
costs. Because of the inherent limitations in all control systems, no evaluation
of controls can provide absolute assurance that all control issues and instances
of fraud, if any, within the Company have been detected. These inherent
limitations include the realities that judgments in decision-making can be
faulty, and that breakdowns can occur because of simple error or mistake.
Additionally, controls can be circumvented by the individual acts of some
persons, by collusion of two or more people, or by management override of the
control. The design of any system of controls also is based in part upon certain
assumptions about the likelihood of future events, and there can be no assurance
that any design will succeed in achieving its stated goals under all potential
future conditions; over time, control may become inadequate because of changes
in conditions, or the degree of compliance with the policies or procedures may
deteriorate. Because of the inherent limitations in a cost-effective control
system, misstatements due to error or fraud may occur and not be detected.

Scope of the Controls Evaluation. The CEO/CFO evaluation of the Company's
Disclosure Controls and the Company's Internal Controls included a review of the
controls objectives and design, the controls implementation by the company and
the effect of the controls on the information generated for use in this report.
In the course of the Controls Evaluation, we sought to identify data errors,
controls problems or acts of fraud and to confirm that appropriate corrective
action, including process improvements, were being undertaken. This type of
evaluation will be done on a quarterly basis so that the conclusions concerning
controls effectiveness can be reported in the Company's quarterly reports on
Form 10-QSB and annual report on Form 10-KSB. The Company's Internal Controls
are also evaluated on an ongoing basis by other personnel in the Company's
finance organization and by the Company's independent auditors in connection
with their audit and review activities. The overall goals of these various
evaluation activities are to monitor the Company's Disclosure Controls and the
Company's Internal Controls and to make modifications as necessary; the
Company's intent in this regard is that the Disclosure Controls and the Internal
Controls will be maintained as dynamic systems that change (including with
improvements and corrections) as conditions warrant.

Among other matters, the Company sought in its evaluation to determine whether
there were any "significant deficiencies" or "material weaknesses" in the
Company's Internal Controls, or whether the Company had identified any acts of
fraud involving personnel who have a significant role in the Company's Internal
Controls. This information was important both for the Controls Evaluation
generally and because item 5 in the Section 302 Certifications of the CEO and
CFO require that the CEO and CFO disclose that information to the Audit
Committee of the Company's Board and to the Company's independent auditors and
to report on related matters in this section of the Report. In the professional
auditing literature, "significant deficiencies" are referred to as "reportable
conditions"; these are control issues that could have a significant adverse
effect on the ability to record, process, summarize and report financial data in
the financial statements. A "material weakness" is defined in the auditing
literature as a particularly serious reportable condition where the internal
control does not reduce to a relatively low level the risk that misstatements
caused by error or fraud may occur in amounts that would be material in relation
to the financial statements and not be detected within a timely period by
employees in the normal course of performing their assigned functions. The
Company also sought to deal with other controls matters in the Controls
Evaluation, and in each case if a problem was identified, the Company considered
what revision, improvement and/or correction to make in accordance with our
on-going procedures.

<page>

In accordance with SEC requirements, the CEO and CFO note that, there has been
no significant change in Internal Controls that occurred during our most recent
fiscal quarter that has materially affected or is reasonably likely to
materially affect our Internal Controls.

Conclusions. Based upon the Controls Evaluation, the Company's CEO and CFO have
concluded that, subject to the limitations noted above, the Company's Disclosure
Controls are effective to ensure that material information relating to the
Company and its consolidated subsidiaries is made known to management, including
the CEO and CFO, particularly during the period when periodic reports are being
prepared, and that the Company's Internal Controls are effective to provide
reasonable assurance that the Company's financial statements are fairly
presented in conformity with generally accepted accounting principles.

Item 4.  Submission of Matters to a Vote of Security Holders

On April 24, 2003, the Company held its annual stockholder's meeting in San
Carlos, California. At that meeting, Marc J. Anderson and Thomas W. Orr were
re-elected to the Board of Directors.

The vote tally was as follows:

                           FOR ELECTION                       WITHHELD

Mr. Orr                        1,128,322                            5,662
Mr. Anderson                   1,128,058                            5,926

The stockholders also confirmed the appointment of PricewaterhouseCoopers LLP as
auditors of the Company.

The vote was as follows:

In Favor                       1,123,919
Against                            1,483
Abstaining                         8,852



<PAGE>



Item 6.  Exhibits and Reports on Form 8-K.

(a)      Exhibits
         Exhibit
         Number                               Description

          31.1  Certification of Neal D. Crispin, Chief Executive Officer,
                pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
          31.2  Certification of Toni M. Perazzo, Chief Financial Officer,
                pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
          32.1* Certification of Neal D. Crispin, Chief Executive Officer,
                pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
          32.2* Certification of Toni M. Perazzo, Chief Financial Officer,
                pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.



* These certificates are furnished to, but shall not be deemed to be filed with,
the Securities and Exchange Commission ("SEC").
----------

 (b) Reports on Form 8-K.

Report on Form 8-K disclosing First Quarter 2003 Results, filed with the SEC on
April 22, 2003.



<PAGE>



                                   SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                                   AEROCENTURY CORP.


Date:    August 13, 2003           By:    /s/ Toni M. Perazzo
                                          -------------------------------
                                          Toni M. Perazzo

                                   Title: Senior Vice President-Finance and
                                          Chief Financial Officer