<PAGE>


                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

(Mark One)

[ X X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
        EXCHANGE ACT OF 1934

For the quarterly period ended   March 31, 1998
                               --------------------------------------------

                                       OR

[    ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
       EXCHANGE ACT OF 1934

For the transition period from ___________________________________ to ______

                            _______________________

For Quarter Ended March 31, 1998                     Commission File No. 0-21444

                             AFG Investment Trust C
                             ----------------------
             (Exact name of registrant as specified in its charter)

Delaware                                                    04-3157232
--------                                                    ----------
(State or other jurisdiction of                            (IRS Employer
 incorporation or organization)                             Identification No.)

88 Broad Street, Boston, MA                                 02110
---------------------------                                 -----
(Address of principal executive offices)                   (Zip Code)

Registrant's telephone number, including area code   (617)854-5800
                                                   ---------------

(Former name, former address and former fiscal year, if changed since last
report.)

      Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 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|_|

                APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
                   PROCEEDINGS DURING THE PRECEDING FIVE YEARS

      Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13, or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under
a plan confirmed by a court during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has not
been subject to such filing requirements for the past 90 days. Yes |_| No |_|


<PAGE>

                             AFG Investment Trust C

                                    FORM 10-Q

                                      INDEX

                                                                            Page
                                                                            ----

PART I. FINANCIAL INFORMATION:

      Item 1. Financial Statements

            Statement of Financial Position
                at March 31, 1998 and December 31, 1997                        3

            Statement of Operations
                for the three months ended March 31, 1998 and 1997             4

            Statement of Cash Flows
                for the three months ended March 31, 1998 and 1997             5

            Notes to the Financial Statements                               6-12

      Item 2. Management's Discussion and Analysis of Financial
                Condition and Results of Operations                        13-18

PART II. OTHER INFORMATION:

      Items 1 - 6                                                             19


                                       2
<PAGE>

                             AFG Investment Trust C

                         STATEMENT OF FINANCIAL POSITION
                      March 31, 1998 and December 31, 1997

                                   (Unaudited)

<TABLE>
<CAPTION>
                                                       March 31,        December 31,
                                                         1998               1997
                                                    -------------      -------------
ASSETS
------

<S>                                                 <C>                <C>          
Cash and cash equivalents                           $  12,330,457      $   8,843,640
Restricted cash                                         9,566,189          9,566,189
Rents receivable                                          441,146            819,736
Accounts receivable - affiliate                           771,554            904,426
Equipment at cost, net of accumulated depreciation  
   of $48,775,793 and $50,635,609 at March 31, 
   1998 and December 31, 1997, respectively            58,920,180         61,902,787
                                                    -------------      -------------
     Total assets                                   $  82,029,526      $  82,036,778
                                                    -------------      -------------
                                                    -------------      -------------

LIABILITIES AND PARTICIPANTS' CAPITAL
-------------------------------------

Notes payable                                       $  38,467,220      $  39,928,173
Accrued interest                                          365,223            240,434
Accrued liabilities                                        20,973             11,550
Accrued liabilities - affiliate                            64,154            118,703
Deferred rental income                                    183,377            126,942
Cash distributions payable to participants                451,804            451,804
                                                    -------------      -------------
     Total liabilities                                 39,552,751         40,877,606
                                                    -------------      -------------

Participants' capital (deficit):
   Managing Trustee                                        14,232           (123,674)
   Special Beneficiary                                    117,411         (1,000,794)
   Class A Beneficiary Interests (1,792,353
     Interests; initial purchase price of
     $25 each)                                         30,895,483         30,858,790
   Class B Beneficiary Interests (3,024,740
     Interests; initial purchase price of
     $5 each)                                          13,741,216         13,716,417
   Treasury Interests (218,661 Interests at Cost)      (2,291,567)        (2,291,567)
                                                    -------------      -------------
     Total participants' capital                       42,476,775         41,159,172
                                                    -------------      -------------
     Total liabilities and participants' capital    $  82,029,526      $  82,036,778
                                                    -------------      -------------
                                                    -------------      -------------
</TABLE>

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


                                      3
<PAGE>

                             AFG Investment Trust C

                             STATEMENT OF OPERATIONS
               for the three months ended March 31, 1998 and 1997

                                   (Unaudited)
<TABLE>
<CAPTION>
                                                          1998             1997
                                                       ----------     ----------
<S>                                                    <C>            <C>
Income:

   Lease revenue                                       $4,101,575     $3,994,410

   Interest income                                        264,078        197,831

   Gain on sale of equipment                            2,284,311         34,537
                                                       ----------     ----------

      Total income                                      6,649,964      4,226,778
                                                       ----------     ----------

Expenses:

   Depreciation and amortization                        2,847,877      3,265,846

   Interest expense                                       844,967        310,922

   Equipment management fees - affiliate                  176,223        169,391

   Operating expenses - affiliate                         107,894        129,264
                                                       ----------     ----------

      Total expenses                                    3,976,961      3,875,423
                                                       ----------     ----------

Net income                                             $2,673,003     $  351,355
                                                       ----------     ----------
                                                       ----------     ----------

Net income
    per Class A Beneficiary Interest                   $     0.43     $     0.16
                                                       ----------     ----------
                                                       ----------     ----------

    per Class B Beneficiary Interest                   $     0.17     $       --
                                                       ----------     ----------
                                                       ----------     ----------

Cash distributions declared
    per Class A Beneficiary Interest
                                                       $     0.41     $     0.41
                                                       ----------     ----------
                                                       ----------     ----------

    per Class B Beneficiary Interest                   $     0.16     $       --
                                                       ----------     ----------
                                                       ----------     ----------
</TABLE>


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


                                       4
<PAGE>

                             AFG Investment Trust C

                             STATEMENT OF CASH FLOWS
               for the three months ended March 31, 1998 and 1997

                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                                 1998                       1997
                                                                                             ------------              ------------

<S>                                                                                          <C>                       <C>         
Cash flows from (used in) operating activities:
Net income                                                                                   $  2,673,003              $    351,355
Adjustments to reconcile net income to net cash
   from operating activities:
      Depreciation and amortization                                                             2,847,877                 3,265,846

      Gain on sale of equipment                                                                (2,284,311)                  (34,537)
Changes in assets and liabilities
   Decrease in:
      Rents receivable                                                                            378,590                   147,973
      Accounts receivable - affiliate                                                             132,872                 5,881,295
   Increase (decrease) in:
      Accrued interest                                                                            124,789                    67,028
      Accrued liabilities                                                                           9,423                    (5,235)
      Accrued liabilities - affiliate                                                             (54,549)                 (132,346)

      Deferred rental income                                                                       56,435                   122,353
                                                                                             ------------              ------------

         Net cash from operating activities                                                     3,884,129                 9,663,732
                                                                                             ------------              ------------

Cash flows from (used in) investing activities:
   Purchase of equipment                                                                               --                (1,054,800)
   Proceeds from equipment sales                                                                2,419,041                   162,066
                                                                                             ------------              ------------

         Net cash from (used in) investing activities                                           2,419,041                  (892,734)
                                                                                             ------------              ------------

Cash flows used in financing activities:
   Principal payments - notes payable                                                          (1,460,953)               (2,112,774)
   Distributions paid                                                                          (1,355,400)                 (907,448)

         Net cash used in financing activities                                                 (2,816,353)               (3,020,222)
                                                                                             ------------              ------------

Net increase in cash and cash equivalents                                                       3,486,817                 5,750,776

Cash and cash equivalents at beginning of period                                                8,843,640                10,634,493
                                                                                             ------------              ------------

Cash and cash equivalents at end of period                                                   $ 12,330,457              $ 16,385,269
                                                                                             ------------              ------------
                                                                                             ------------              ------------

Supplemental disclosure of cash flow information:
   Cash paid during the period for interest                                                  $    720,178              $    243,894
                                                                                             ------------              ------------
                                                                                             ------------              ------------
</TABLE>

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


                                       5
<PAGE>

                             AFG Investment Trust C

                        Notes to the Financial Statements
                                 March 31, 1998

                                   (Unaudited)

NOTE 1 - BASIS OF PRESENTATION

      The financial statements presented herein are prepared in conformity with
generally accepted accounting principles and the instructions for preparing Form
10-Q under Rule 10-01 of Regulation S-X of the Securities and Exchange
Commission and are unaudited. As such, these financial statements do not include
all information and footnote disclosures required under generally accepted
accounting principles for complete financial statements and, accordingly, the
accompanying financial statements should be read in conjunction with the
footnotes presented in the 1997 Annual Report. Except as disclosed herein, there
has been no material change to the information presented in the footnotes to the
1997 Annual Report.

      In the opinion of management, all adjustments (consisting of normal and
recurring adjustments) considered necessary to present fairly the financial
position at March 31, 1998 and December 31, 1997 and results of operations for
the three month periods ended March 31, 1998 and 1997 have been made and are
reflected.

NOTE 2 - CASH

      At March 31, 1998, the Trust had $21,091,881 invested in federal agency
discount notes and reverse repurchase agreements secured by U.S. Treasury Bills
or interests in U.S. Government securities. Such cash includes $9,566,189 which
represents net proceeds realized from the offering of the Class B Interests less
the portion thereof used to pay a special distribution to the Class A
Beneficiaries and to redeem Class A Interests (see Note 9). These funds are
reserved for future purchases of Class A Interests pursuant to the Trust
Agreement and are classified as Restricted Cash on the Trust's Statement of
Financial Position at March 31, 1998 and December 31, 1997.

NOTE 3 - REVENUE RECOGNITION

      Rents are payable to the Trust monthly, quarterly or semi-annually and no
significant amounts are calculated on factors other than the passage of time.
The leases are accounted for as operating leases and are noncancellable. Rents
received prior to their due dates are deferred. In certain instances, the Trust
may enter primary-term, renewal or re-lease agreements which expire beyond the
Trust's anticipated dissolution date. This circumstance is not expected to
prevent the orderly wind-up of the Trust's business activities as the Managing
Trustee and the Advisor would seek to sell the then-remaining equipment assets
either to the lessee or to a third party, taking into consideration the amount
of future non-cancelable rental payments associated with the attendant lease
agreements. Future minimum rents of $20,753,000 are due as follows:

<TABLE>

<S>                                             <C>
       For the year ending March 31, 1999       $ 9,481,965
                                     2000         3,654,803
                                     2001         2,521,061
                                     2002         2,125,899
                                     2003         1,904,141
                               Thereafter         1,065,131
                                                -----------
                                    Total       $20,753,000
                                                -----------
                                                -----------
</TABLE>


                                       6
<PAGE>

                             AFG Investment Trust C

                        Notes to the Financial Statements

                                   (Continued)

NOTE 4 - EQUIPMENT

      The following is a summary of equipment owned by the Trust at March 31,
1998. Remaining Lease Term (Months), as used below, represents the number of
months remaining from March 31, 1998 under contracted lease terms and is
presented as a range when more than one lease agreement is contained in the
stated equipment category. A Remaining Lease Term equal to zero reflects
equipment either held for sale or re-lease or being leased on a month-to-month
basis. In the opinion of Equis Financial Group Limited Partnership ("EFG"), the
acquisition cost of the equipment did not exceed its fair market value.

<TABLE>
<CAPTION>

                                         Remaining
                                         Lease Term            Equipment
     Equipment Type                       (Months)              at Cost
     --------------                       --------              -------
<S>                                        <C>               <C>
Aircraft                                    0-57             $47,400,169
Computers & peripherals                     0-21              10,914,878
Retail store fixtures                       0-18              10,348,100
Manufacturing                               9-65              10,328,381
Locomotives                                27-72               9,179,509
Construction & mining                       0-33               7,557,664
Materials handling                          0-59               7,493,210
Communications                               0-2               2,004,394
Research & test                              0-7               1,667,223
Furniture & fixtures                         5-7                 239,785
Trailers/intermodal containers                 1                 229,352
Tractors and heavy duty trucks                 0                 148,079
Photocopying                                 0-3                 118,652
Energy systems                                 0                  63,900
Medical                                        5                   2,206
Miscellaneous                                  6                     471
                                                             -----------

                            Total equipment cost             107,695,973

                        Accumulated depreciation             (48,775,793)
                                                             -----------

      Equipment, net of accumulated depreciation             $58,920,180
                                                             -----------
                                                             -----------
</TABLE>

      At March 31, 1998, the Trust's equipment portfolio included equipment
having a proportionate original cost of $59,469,631, representing approximately
55% of total equipment cost.

      At March 31, 1998, the cost and net book value of equipment held for sale
or re-lease was approximately $9,525,000 and $5,475,000, respectively. This
equipment includes the Trust's proportionate interest in a McDonnell Douglas
MD-82 aircraft formerly leased to Alaska Airlines, Inc. with a cost and net book
value of $7,333,098 and $5,127,708, respectively. The Managing Trustee is
currently holding discussions with a potential lessee regarding the re-lease of
this aircraft. The Managing Trustee is actively seeking the sale or re-lease of
all equipment not on lease. In addition, the summary above also includes
equipment being leased on a month-to-month basis.




                                       7
<PAGE>

                             AFG Investment Trust C

                        Notes to the Financial Statements

                                   (Continued)

NOTE 5 - RELATED PARTY TRANSACTIONS

      All operating expenses incurred by the Trust are paid by EFG on behalf of
the Trust and EFG is reimbursed at its actual cost for such expenditures. Fees
and other costs incurred during each of the three month periods ended March 31,
1998 and 1997, which were paid or accrued by the Trust to EFG or its Affiliates,
are as follows:

<TABLE>
<CAPTION>

                                                        1998              1997
                                                       --------         --------
<S>                                                    <C>              <C>
Equipment acquisition fees                             $     --         $ 30,722
Equipment management fees                               176,223          169,391
Administrative charges                                   22,686           14,346
Reimbursable operating expenses
  due to third parties                                   85,208          114,918
                                                       --------         --------

                     Total                             $284,117         $329,377
                                                       --------         --------
                                                       --------         --------
</TABLE>

      All rents and proceeds from the sale of equipment are paid directly to
either EFG or to a lender. EFG temporarily deposits collected funds in a
separate interest-bearing escrow account prior to remittance to the Trust. At
March 31, 1998, the Trust was owed $771,554 by EFG for such funds, and the
interest thereon. These funds were remitted to the Trust in April 1998.

      Refer to Note 8 regarding the purchase of Class B Interests by an
affiliate, Equis II Corporation and the change in ownership of the Managing
Trustee.

NOTE 6 - NOTES PAYABLE

      Notes payable at March 31, 1998 consisted of installment notes of
$38,467,220 payable to banks and institutional lenders. The notes bear interest
rates ranging between 6.1% and 14.46%, except for one note which bears a
fluctuating interest rate based on LIBOR (5.63% at March 31, 1998) plus a
margin. All of the installment notes are non-recourse and are collateralized by
the equipment and assignment of the related lease payments. Generally, the
installment notes will be fully amortized by noncancellable rents. However, the
Trust has balloon payment obligations of $22,704,268, $2,867,081 and $282,421 at
the expiration of the primary lease terms related to an aircraft leased to
Scandinavian Airlines System, certain rail equipment and the aircraft leased to
Reno Air, Inc., respectively. The carrying amount of notes payable approximates
fair value at March 31, 1998.

      The annual maturities of the notes payable are as follows:

<TABLE>

<S>                                                <C>
      For the year ending March 31, 1999           $   26,679,504
                                    2000               2,162,833
                                    2001               4,859,996
                                    2002               1,776,869
                                    2003               1,956,214
                              Thereafter               1,031,804
                                                       ---------

                                   Total             $38,467,220
                                                     -----------
                                                     -----------
</TABLE>




                                       8
<PAGE>

                             AFG Investment Trust C

                        Notes to the Financial Statements

                                   (Continued)

NOTE 7 - LEGAL PROCEEDINGS

      On or about January 15, 1998, certain plaintiffs (the "Plaintiffs") filed
a class and derivative action, captioned Leonard Rosenblum, et al. v. Equis
Financial Group Limited Partnership, et al., in the United States District Court
for the Southern District of Florida (the "Court") on behalf of a proposed class
of investors in 28 equipment leasing programs sponsored by EFG, including the
Trust (collectively, the "Nominal Defendants"), against EFG and a number of its
affiliates, including the Managing Trustee, as defendants (collectively, the
"Defendants"). Certain of the Plaintiffs, on or about June 24, 1997, had filed
an earlier derivative action, captioned Leonard Rosenblum, et al. v. Equis
Financial Group Limited Partnership, et al., in the Superior Court of the
Commonwealth of Massachusetts on behalf of the Nominal Defendants against the
Defendants. Both actions are referred to herein collectively as the "Class
Action Lawsuit."

      The Plaintiffs have asserted, among other things, claims against the
Defendants on behalf of the Nominal Defendants for violations of the Securities
Exchange Act of 1934, common law fraud, breach of contract, breach of fiduciary
duty, and violations of the partnership or trust agreements that govern each of
the Nominal Defendants. The Defendants have denied, and continue to deny, that
any of them have committed or threatened to commit any violations of law or
breached any fiduciary duties to the Plaintiffs or the Nominal Defendants.

      On March 9, 1998, counsel for the Defendants and the Plaintiffs entered
into a Memorandum of Understanding setting forth the terms pursuant to which a
settlement of the Class Action Lawsuit is intended to be achieved and which,
among other things, is expected to reduce the burdens and expenses attendant to
continuing litigation. The Memorandum of Understanding represents a preliminary
step towards a comprehensive Stipulation of Settlement between the parties that
must be presented to and approved by the Court as a condition precedent to
effecting a settlement. The Memorandum of Understanding (i) prescribes a number
of conditions necessary to achieving a settlement, including providing the
beneficiaries (or partners, as applicable) of the Nominal Defendants with the
opportunity to vote on any settlement and (ii) contemplates various changes
that, if effected, would alter the future operations of the Nominal Defendants
(see Note 10). To the extent that the parties agree upon a Stipulation of
Settlement that is approved by the Court, the complete terms thereof will be
communicated to all of the beneficiaries (or partners) of the Nominal Defendants
to enable them to vote thereon.

      There can be no assurance that the parties will agree on a Stipulation of
Settlement, or that it will be approved by the Court, or that the outcome of the
voting by the beneficiaries (or partners) of the Nominal Defendants, including
the Trust, will result in a settlement finally being effected or in the Trust
being included in any such settlement. The Managing Trustee and its affiliates,
in consultation with counsel, concur that there is a reasonable basis to believe
that a Stipulation of Settlement will be agreed upon by the parties and approved
by the Court. In the absence of a Stipulation of Settlement approved by the
Court, the Defendants intend to defend vigorously against the claims asserted in
the Class Action Lawsuit. The Managing Trustee and its affiliates cannot predict
with any degree of certainty the ultimate outcome of such litigation.

      On July 27, 1995, EFG, on behalf of the Trust and other EFG-sponsored
investment programs, filed an action in the Commonwealth of Massachusetts
Superior Court Department of the Trial Court in and for the County of Suffolk,
for damages and declaratory relief against a lessee of the Trust, National Steel
Corporation ("National Steel"), under a certain Master Lease Agreement ("MLA")
for the lease of certain equipment. EFG is seeking the reimbursement by National
Steel of certain sales and/or use taxes paid to the State of Illinois and other
remedies provided by the MLA. On August 30, 1995, National Steel filed a Notice
of Removal which removed the case to the United States District Court, District
of Massachusetts. On September 7, 1995, National Steel filed its Answer to EFG's
Complaint along with Affirmative Defenses and Counterclaims, seeking declaratory
relief and alleging breach of contract, implied covenant of good faith and fair
dealing and specific performance. EFG filed its Answer to these counterclaims on
September 29, 1995. Though the parties discussed settlement with respect to this
matter for some time, the negotiations were unsuccessful. Notwithstanding these
discussions, EFG recently filed an Amended and Supplemental Complaint alleging
further default under the MLA and EFG recently filed a motion for Summary
Judgment on all claims and counterclaims. The Court held a hearing on EFG's
motion in December 1997 and the Court recently entered a decision dismissing
certain of National Steel's counterclaims and finding in


                                       9
<PAGE>

                             AFG Investment Trust C

                        Notes to the Financial Statements

                                   (Continued)

favor of EFG on certain issues and in favor of National Steel on other issues.
The Trust does not anticipate that it will experience any material losses as a
result of this action.

NOTE 8 - ISSUANCE OF CLASS B INTERESTS

      On October 26, 1996, the Trust filed a Solicitation Statement with the
United States Securities and Exchange Commission (the "SEC") which subsequently
was sent to the Beneficiaries pursuant to Regulation 14A of Section 14 of the
Securities Exchange Act. The Solicitation Statement sought the consent of the
Beneficiaries to a proposed amendment (the "Amendment") to the Amended and
Restated Declaration of Trust (the "Trust Agreement") which would (i) amend the
provisions of the Trust Agreement governing the redemption of Beneficiary
Interests to permit the Trust to offer to redeem outstanding Beneficiary
Interests at such times, in such amounts, in such manner and at such prices as
the Managing Trustee might determine from time to time, in accordance with
applicable law; and (ii) add a provision to the Trust Agreement that would
permit the Trust to issue, at the discretion of the Managing Trustee and without
further consent or approval of the Beneficiaries, an additional class of
security with such designations, preferences and relative, participating,
optional or other special rights, powers and duties as the Managing Trustee
might affix. The funds obtained through the issuance of such a security would be
used by the Trust to (a) expand redemption opportunities for Beneficiaries
without using Trust funds which might otherwise be available for cash
distributions; and (b) make a special one-time cash distribution to the
Beneficiaries.

      Pursuant to the Trust Agreement, the adoption of the Amendment required
the consent of the Beneficiaries holding more than 50% in the aggregate of the
Class A Interests held by all Beneficiaries. A majority of the Class A
Interests, representing 1,215,771 Interests or 60.5% of all Class A Interests,
voted in favor of the Amendment; 174,315 Interests or 8.7% of all Class A
Interests voted against the Amendment; and 49,787 Interests or 2.5% of all Class
A Interests abstained. Approximately 72% of all Class A Interests participated
in the vote. Accordingly, the Trust Agreement was amended.

      On February 12, 1997, the Trust filed a Registration Statement on Form S-1
with the SEC, which became effective June 10, 1997. The Registration Statement
covered the issuance and sale of a new class of beneficiary interests in the
Trust (the "Class B Interests"). The characteristics of the Class B Interests,
associated risk factors and other matters of importance to the Beneficiaries and
purchasers of the Class B Interests were set forth in a Prospectus sent to the
Beneficiaries. On July 17, 1997, the offering closed and on July 18, 1997 the
Trust issued 3,024,740 Class B Interests at $5.00 per interest, thereby
generating $15,123,700 in aggregate Class B capital contributions. Class A
Beneficiaries purchased 5,520 Class B Interests, generating $27,600 of aggregate
capital contributions, and the Special Beneficiary, EFG, purchased 3,019,220
Class B Interests, generating $15,096,100 of such aggregate capital
contributions. The Trust incurred offering costs in the amount of $151,237 and
professional service costs of $153,842 in connection with this offering.

      Subsequently, EFG transferred its Class B Interests to a special-purpose
company, Equis II Corporation, a Delaware corporation. EFG also transferred its
ownership of AFG ASIT Corporation, the Managing Trustee of the Trust, to Equis
II Corporation. As a result, Equis II Corporation has voting control of the
Trust through its ownership of the majority of all of the Trust's outstanding
voting interests, as well as its ownership of AFG ASIT Corporation. Equis II
Corporation is controlled by EFG's President and Chief Executive Officer, Gary
D. Engle. Accordingly, control of the Managing Trustee did not change as a
result of the foregoing transactions.

      As described in the Prospectus for the offering of the Class B Interests,
the Managing Trustee used a portion of the net cash proceeds realized from the
offering of the Class B Interests to pay a one-time special cash distribution of
approximately $1.47 per Class A Interest to the Class A Beneficiaries of the
Trust. The Managing Trustee declared and paid this special cash distribution,
aggregating $2,960,865 to the Class A Beneficiaries on August 15, 1997.


                                       10
<PAGE>

                             AFG Investment Trust C

                        Notes to the Financial Statements

                                   (Continued)

NOTE 9 - REDEMPTION OF CLASS A INTERESTS

      On August 7, 1997, the Trust commenced an offer to purchase up to 45% of
the outstanding Class A Interests of the Trust by filing a Form 13E-4, Issuer
Tender Offer Statement, with the SEC and distributing to the Class A
Beneficiaries information (the "Tender Documents") concerning the offer. On
October 10, 1997, the Trust used $2,291,567 of the net proceeds realized from
the issuance of the Class B Interests to purchase 218,661 of the Class A
Interests tendered as a result of the offer. The Tender Documents described,
among other things, the terms of the offer and the purchase price per Class A
Interest being offered by the Trust. The Trust intends to purchase additional
outstanding Class A Interests through future offers to purchase during the
Initial Redemption Period (two years following the close of the Class B offering
which occurred on July 17,1997). These purchases will be funded by the net
proceeds realized from the issuance of the Class B Interests less the portion
thereof used to pay a special distribution to the Class A Beneficiaries and to
redeem Class A Interests to date. These funds are classified as Restricted Cash
on the Trust's Statement of Financial Position at March 31, 1998 and December
31, 1997 (see also Note 10).

NOTE 10 - SUBSEQUENT EVENT

      On May 5, 1998, the Trust filed a definitive Solicitation Statement with
the United States Securities and Exchange Commission in connection with the
solicitation by the Trust of the consent of the Beneficiaries to a proposed
amendment (the "Amendment") to the Second Amended and Restated Declaration of
Trust (the "Trust Agreement"). The Solicitation Statement and Consent of
Beneficiary were mailed to all of the Beneficiaries of the Trust on May 6, 1998.
The Beneficiaries were requested to use the Consent of Beneficiary to vote on
several proposals and return their votes on or before June 5, 1998.

      Subject to attaining a settlement in the Class Action Lawsuit described in
Note 7 herein, the Amendment, if approved, would modify the Trust Agreement in
the following principal respects: (i) the Trust would pay a Special Cash
Distribution to the Class A Beneficiaries of record as of September 1, 1997, or
to their successors or assigns, totaling $1,513,639 (or approximately $0.75 per
Class A Interest) using a portion of the Class B capital contributions that
otherwise would be distributed as a Class B Capital Distribution to Equis II
Corporation, (see Note 8) the parent company of the Managing Trustee and an
affiliate of EFG; (ii) Equis II Corporation will be required to reduce its
prospective Class B Capital Distributions by $3,405,688 and treat such amount as
a long-term equity investment in the Trust; (iii) certain voting restrictions
will be placed upon the Class B Interests owned by Equis II Corporation; (iv)
the Trust's reinvestment period, which originally expired on September 2, 1997,
will be reinstated until December 31, 2002; and (v) acquisition fees paid to EFG
in connection with reinvestment assets acquired after the Amendment date will be
reduced from a maximum of 3% to 1% and management fees earned in connection with
such assets will be reduced from a maximum of 5% to 2%.

      The proposed Amendment also provides for other modifications to the Trust
Agreement which are not contingent upon reaching a settlement in the Class
Action Lawsuit, principally as follows: (i) the Trust's stated investment
policies and objectives will be broadened to permit the Trust to invest in
assets other than leased equipment, and (ii) the Trust's financing provisions
will be modified to eliminate any cap on the amount of aggregate Trust
indebtedness and permit the Trust to use cross-collateralized and other recourse
debt structures, thereby enabling the Trust to secure financing at interest
rates that, generally, would be lower than under current borrowing arrangements.

      The Solicitation Statement contains additional information concerning the
proposed Amendment and associated risk factors. The Amendment will be adopted or
rejected based upon the majority of the Class A Interests actually voted
(including 9,210 Class A Interests owned by an affiliate of EFG). Accordingly,
the Amendment will be adopted no matter how few Class A Interests are actually
voted, provided a majority of those


                                       11
<PAGE>

                             AFG Investment Trust C

                        Notes to the Financial Statements

                                   (Continued)

Interests are voted in favor of the Amendment. Although Equis II Corporation has
voting control of the Trust, it will vote its Class B Interests in the same
proportion in which the majority of the Class A Interests are voted.


                                       12
<PAGE>

                             AFG Investment Trust C

                                    FORM 10-Q

                          PART I. FINANCIAL INFORMATION

Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.

      Certain statements in this quarterly report of AFG Investment Trust C (the
"Trust") that are not historical fact constitute "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of 1995 and
are subject to a variety of risks and uncertainties. There are a number of
important factors that could cause actual results to differ materially from
those expressed in any forward-looking statements made herein. These factors
include, but are not limited to, the outcome of the Class Action Lawsuit
described in Note 7 to the accompanying financial statements, and the ability of
Equis Financial Group Limited Partnership (formerly American Finance Group)
("EFG") to collect all rents due under the attendant lease agreements and to
successfully remarket the Trust's equipment, upon the expiration of such leases.

      The Year 2000 Issue is the result of computer programs being written using
two digits rather than four digits to define the applicable year. EFG's computer
programs were designed and written using four digits to define the applicable
year. As a result, EFG does not anticipate system failure or miscalculations
causing disruptions of operations. Based on recent assessments, EFG determined
that minimal modification of software is required so that its network operating
system will function properly with respect to dates in the year 2000 and
thereafter. EFG believes that with these modifications to the existing operating
system, the Year 2000 Issue will not pose significant operational problems for
its computer systems. EFG will utilize internal resources to upgrade software
for Year 2000 modifications and anticipates completing the Year 2000 project by
December 31, 1998, which is prior to any anticipated impact on its operating
system. The total cost of the Year 2000 project is expected to be insignificant
and have no effect on the results of operations of the Trust.

Three months ended March 31, 1998 compared to the three months ended March 31,
1997:

Overview

      As an equipment leasing trust, the Trust was organized to acquire a
diversified portfolio of capital equipment subject to lease agreements with
third parties. The Trust was designed to progress through three principal
phases: acquisitions, operations, and liquidation. During the operations phase,
a period of approximately six years, all equipment in the Trust's portfolio will
progress through various stages. Initially, all equipment will generate rental
revenues under primary term lease agreements. During the life of the Trust,
these agreements will expire on an intermittent basis and equipment held
pursuant to the related leases will be renewed, re-leased or sold, depending on
prevailing market conditions and the assessment of such conditions by EFG to
obtain the most advantageous economic benefit. Over time, a greater portion of
the Trust's original equipment portfolio will become available for remarketing
and cash generated from operations and from sales or refinancings will
fluctuate. Presently, the Trust is a Nominal Defendant in a Class Action
Lawsuit. The outcome of the Class Action Lawsuit could alter the future business
operations of the Trust. See Note 7 to the accompanying financial statements.
The Trust's operations commenced in 1992.

Results of Operations

      For the three months ended March 31, 1998, the Trust recognized lease
revenue of $4,101,575 compared to $3,994,410 for the same period in 1997. The
increase in lease revenue from 1997 to 1998 is attributable to the acquisition
of additional equipment in 1997 pursuant to the reinvestment provisions of the
Amended and Restated Declaration of Trust (the "Trust Agreement"). The period
during which the Trust could reinvest Cash from Sales or Refinancings in
additional equipment expired on September 2, 1997. Over time, the level of lease
revenue will decline due to the expiration of the Trust's primary lease term
agreements. The future level of lease revenue to be recognized by the Trust may
be impacted by the proposed amendment to the Trust Agreement as described in
Note 10 to the accompanying financial statements.

      The Trust's equipment portfolio includes certain assets in which the Trust
holds a proportionate ownership interest. In such cases, the remaining interests
are owned by EFG or an affiliated equipment leasing program 


                                       13
<PAGE>

                             AFG Investment Trust C

                                    FORM 10-Q

                          PART I. FINANCIAL INFORMATION

sponsored by EFG. Proportionate equipment ownership enables the Trust to further
diversify its equipment portfolio by participating in the ownership of selected
assets, thereby reducing the general levels of risk which could result from a
concentration in any single equipment type, industry or lessee. The Trust and
each affiliate individually report, in proportion to their respective ownership
interests, their respective shares of assets, liabilities, revenues, and
expenses associated with the equipment.

      Interest income for the three months ended March 31, 1998 was $264,078
compared to $197,831 for the same period in 1997. Generally, interest income is
generated from the temporary investment of rental receipts and equipment sale
proceeds in short-term instruments. Interest income in 1998 included interest
earned on unexpended proceeds resulting from the issuance of Class B Interests.
Future interest income will fluctuate in relation to prevailing interest rates,
the collection of lease revenue and the proceeds from equipment sales.

      During the three months ended March 31, 1998, the Trust sold equipment
having a net book value of $134,730 to existing lessees and third parties. These
sales resulted in a net gain, for financial statement purposes, of $2,284,311
compared to a net gain of $34,537 on equipment having a net book value of
$127,529 for the same period in 1997.

      It cannot be determined whether future sales of equipment will result in a
net gain or net loss to the Trust, as such transactions will be dependent upon
the condition and type of equipment being sold and its marketability at the time
of sale. In addition, the amount of gain or loss reported for financial
statement purposes is partly a function of the amount of accumulated
depreciation associated with the equipment being sold.

      The ultimate realization of residual value for any type of equipment is
dependent upon many factors, including EFG's ability to sell and re-lease
equipment. Changing market conditions, industry trends, technological advances
and many other events can converge to enhance or detract from asset values at
any given time. EFG attempts to monitor these changes in order to identify
opportunities which may be advantageous to the Trust and to maximize total cash
returns for each asset.

      The total economic value realized upon final disposition of each asset is
comprised of all primary lease term revenue generated from that asset, together
with its residual value. The latter consists of cash proceeds realized upon the
asset's sale in addition to all other cash receipts obtained from renting the
asset on a re-lease, renewal or month-to-month basis. The Trust classifies such
residual rental payments as lease revenue. Consequently, the amount of gain or
loss reported in the financial statements is not necessarily indicative of the
total residual value the Trust achieved from leasing the equipment.

      Depreciation and amortization expense was $2,847,877 and $3,265,846 for
the three months ended March 31, 1998 and 1997, respectively. For financial
reporting purposes, to the extent that an asset is held on primary lease term,
the Trust depreciates the difference between (i) the cost of the asset and (ii)
the estimated residual value of the asset on a straight-line basis over such
term. For purposes of this policy, estimated residual values represent estimates
of equipment values at the date of primary lease expiration. To the extent that
an asset is held beyond its primary lease term, the Trust continues to
depreciate the remaining net book value of the asset on a straight-line basis
over the asset's remaining economic life.

      Interest expense was $844,967 for the three months ended March 31, 1998
compared to $310,922 for the same period in 1997. Interest expense increased
from 1997 to 1998 due to additional leveraging obtained to finance the
acquisition of reinvestment equipment during 1997. In the future, interest
expense will decline as the principal balance of notes payable is reduced
through the application of rent receipts to outstanding indebtedness.

      Management fees were 4.3% and 4.2% of lease revenue for the three months
ended March 31, 1998 and 1997, respectively. Management fees are based on 5% of
gross lease revenue generated by operating leases and 2% of gross lease revenue
generated by full payout leases.


                                       14
<PAGE>

                             AFG Investment Trust C

                                    FORM 10-Q

                          PART I. FINANCIAL INFORMATION

      Operating expenses consist principally of administrative charges,
professional service costs, such as audit, insurance and legal fees, as well as
printing, distribution and remarketing expenses. Collectively, operating
expenses represented approximately 2.6% and 3.2% of lease revenue for the three
months ended March 31, 1998 and 1997, respectively. The amount of future
operating expenses cannot be predicted with certainty; however, such expenses
are usually higher during the acquisition and liquidation phases of a trust.
Other fluctuations typically occur in relation to the volume and timing of
remarketing activities.

Liquidity and Capital Resources and Discussion of Cash Flows

      The Trust by its nature is a limited life entity which was established for
specific purposes described in the preceding "Overview". As an equipment leasing
program, the Trust's principal operating activities derive from asset rental
transactions. Accordingly, the Trust's principal source of cash from operations
is provided by the collection of periodic rents. These cash inflows are used to
satisfy debt service obligations associated with leveraged leases, and to pay
management fees and operating costs. For the three months ended March 31, 1998,
operating activities generated net cash inflows of $3,884,129 compared to
$3,551,398 for the same period in 1997, after reductions in 1997 for equipment
sale proceeds of $2,265,436 received in connection with the sale of a vessel and
debt proceeds of $3,846,898 which relate to the leveraging of certain rail
equipment in the Trust's portfolio. These sale and debt proceeds were due from
EFG at December 31, 1996. In the future, operating activities are expected to
decrease due to the renewal, re-lease and equipment sale activities which will
cause the Trust's primary-term lease revenue and corresponding sources of
operating cash to decline. Overall, expenses associated with rental activities,
such as management fees, and net cash flow from operating activities will
decline as the Trust experiences a higher frequency of remarketing events.

      The Trust's equipment is leased by a number of creditworthy,
investment-grade companies and, to date, the Trust has not experienced any
material collection problems and has not considered it necessary to provide an
allowance for doubtful accounts. Notwithstanding a positive collection history,
there is no assurance that all future contracted rents will be collected or that
the credit quality of the Trust's lessees will be maintained. Collection risk
could increase in the future, particularly as the Trust remarkets its equipment
and enters re-lease agreements with different lessees. The Managing Trustee will
continue to evaluate and monitor the Trust's experience in collecting accounts
receivable to determine whether a future allowance for doubtful accounts may
become appropriate.

      Ultimately, the Trust will dispose of all assets under lease. This will
occur principally through sale transactions whereby each asset will be sold to
the existing lessee or to a third party. Generally, this will occur upon
expiration of each asset's primary or renewal/re-lease term. In certain
instances, casualty or early termination events may result in the disposal of an
asset. Such circumstances are infrequent and usually result in the collection of
stipulated cash settlements pursuant to terms and conditions contained in the
underlying lease agreements.

      Cash expended for equipment acquisitions and cash realized from asset
disposal transactions are reported under investing activities on the
accompanying Statement of Cash Flows. The Trust expended $1,054,800 during the
three months ended March 31, 1997 to acquire equipment pursuant to the
reinvestment provisions of the Trust Agreement. There were no equipment
acquisitions during the corresponding period in 1998. During the three months
ended March 31, 1998, the Trust realized net sale proceeds of $2,419,041
compared to $162,066 for the same period in 1997. Future inflows of cash from
asset disposals will vary in timing and amount and will be influenced by many
factors including, but not limited to, the frequency and timing of lease
expirations, the type of equipment being sold, its condition and age, and future
market conditions.

      The Trust obtained long-term financing in connection with certain
equipment leases. The repayments of principal related to such indebtedness are
reported as a component of financing activities. Each note payable is recourse
only to the specific equipment financed and to the minimum rental payments
contracted to be received during the debt amortization period (which period
generally coincides with the lease rental term). As rental


                                       15
<PAGE>

                             AFG Investment Trust C

                                    FORM 10-Q

                          PART I. FINANCIAL INFORMATION

payments are collected, a portion or all of the rental payment is used to repay
the associated indebtedness. In the near-term, the amount of cash used to repay
debt obligations is scheduled to increase as a result of leveraging obtained in
connection with the acquisition of reinvestment equipment. Thereafter, the
amount will decline as the principal balance of notes payable is reduced through
the collection and application of rents. However, the Trust has balloon payment
obligations of $22,704,268, $2,867,081 and $282,421 at the expiration of the
primary lease terms related to an aircraft leased to Scandinavian Airlines
System ("SAS"), certain rail equipment and the aircraft leased to Reno Air,
Inc., respectively. SAS has the option to renew the attendant lease agreement
for two one-year periods at the expiration of the primary lease term on December
29, 1998. The repayment of the associated indebtedness will be partly dependent
on whether SAS decides to renew such leases or the outcome of alternative
remarketing efforts, in the event SAS chooses not to do so.

      In accordance with the Trust Agreement, upon the dissolution of the Trust,
the Managing Trustee will be required to contribute to the Trust an amount equal
to any negative balance which may exist in the Managing Trustee's tax capital
account. At December 31, 1997, the Managing Trustee had a negative tax capital
account balance of $4,832.

      At March 31, 1998, the Trust had aggregate future minimum lease payments
of $20,753,000 from contractual lease agreements (see Note 3 to the financial
statements), a portion of which will be used to amortize the principal balance
of notes payable of $38,467,220 (see Note 6 to the financial statements and
discussion above). Additional cash inflows will be realized from future
remarketing activities, such as lease renewals and equipment sales, the timing
and extent of which cannot be predicted with certainty. This is because the
timing and extent of equipment sales is often dependent upon the needs and
interests of the existing lessees. Some lessees may choose to renew their lease
contracts, while others may elect to return the equipment. In the latter
instances, the equipment could be re-leased to another lessee or sold to a third
party. Accordingly, as the Trust matures and a greater level of its equipment
assets become available for remarketing, the cash flows of the Trust will become
less predictable. In addition, the Trust will have cash outflows to satisfy
interest on indebtedness and to pay management fees and operating expenses.
Ultimately, the Trust is expected to meet its future disbursement obligations
and to distribute any excess of cash inflows over cash outflows to the
Participants in accordance with the Trust Agreement. However, several factors,
including month-to-month lease extensions, lessee defaults, equipment casualty
events, and early lease terminations could alter the Trust's anticipated cash
flows as described herein and in the accompanying financial statements and
result in fluctuations to the Trust's periodic cash distribution payments.

      On July 18, 1997, the Trust issued 3,024,740 Class B Interests at $5.00
per interest, thereby generating $15,123,700 in aggregate Class B capital
contributions. Class A Beneficiaries purchased 5,520 Class B Interests,
generating $27,600 of such aggregate capital contributions, and the Special
Beneficiary, EFG, purchased 3,019,220 Class B Interests, generating $15,096,100
of such aggregate capital contributions. The Trust incurred offering costs in
the amount of $151,237 and professional service costs of $153,842 in connection
with this offering. Subsequently, EFG transferred its Class B Interests to a
special-purpose company, Equis II Corporation, a Delaware corporation. EFG also
transferred its ownership of AFG ASIT Corporation, the Managing Trustee of the
Trust, to Equis II Corporation. As a result, Equis II Corporation has voting
control of the Trust through its ownership of the majority of the Trust's
outstanding voting interests, as well as its ownership of AFG ASIT Corporation.
Equis II Corporation is controlled by EFG's President and Chief Executive
Officer, Gary D. Engle. Accordingly, control of the Managing Trustee did not
change as a result of the foregoing transactions (see also Note 8 to the
accompanying financial statements).

      As described in the Prospectus for the offering of the Class B Interests,
the Managing Trustee used a portion of the net cash proceeds realized from the
offering of the Class B Interests to pay a one-time special cash distribution of
approximately $1.47 per Class A Interest to the Class A Beneficiaries of the
Trust. The Managing Trustee declared and paid this special cash distribution,
aggregating $2,960,865, to Class A Beneficiaries on August 15, 1997.


                                       16
<PAGE>

                             AFG Investment Trust C

                                    FORM 10-Q

                          PART I. FINANCIAL INFORMATION

      On August 7, 1997, the Trust commenced an offer to purchase up to 45% of
the outstanding Class A Beneficiary Interests of the Trust. On October 10, 1997,
the Trust used $2,291,567 of the net proceeds realized from the issuance of the
Class B Interests to purchase 218,661 of the Class A Interests tendered as a
result of the offer. The Trust intends to purchase additional Class A Interests
through future offers to purchase during the Initial Redemption Period (two
years following the close of the Class B offering which occurred on July
17,1997). These purchases will be funded by the remaining net proceeds of
$9,566,189 realized from the issuance of the Class B Interests which are
classified as Restricted Cash on the Trust's Statement of Financial Position
(see also Notes 9 and 10 to the accompanying financial statements).

      Cash distributions paid to the Participants consist of both a return of
and a return on capital. Cash distributions do not represent and are not
indicative of yield on investment. Actual yield on investment cannot be
determined with any certainty until conclusion of the Trust and will be
dependent upon the collection of all future contracted rents, the generation of
renewal and/or re-lease rents, and the residual value realized for each asset at
its disposal date. Future market conditions, technological changes, the ability
of EFG to manage and remarket the assets, and many other events and
circumstances, could enhance or detract from individual asset yields and the
collective performance of the Trust's equipment portfolio.

      It is the intention of the Managing Trustee to maintain a cash
distribution level that is consistent with the operating cash flows of the Trust
and to optimize the long-term value of the Trust. A distribution level that is
higher than the Trust's operating cash flows could compromise the Trust's
working capital position, as well as its ability to refurbish or upgrade
equipment in response to lessee requirements or other market circumstances.
Accordingly, in order to better align monthly cash distributions with the
Trust's operating cash flows, the Managing Trustee reduced the level of monthly
cash distributions from an annualized rate of $2.52 per Class A Interest (the
rate established and paid from the Trust's inception through September 1995) to
an annualized rate of $1.26 per Class A Interest commencing in October 1995. In
October 1996, the Managing Trustee increased the annualized distribution rate to
$1.64 per Class A Interest and has sustained this distribution rate through the
first quarter of 1998. For the Class B Beneficiaries, the Managing Trustee
established and paid, from the Trust, an annualized distribution of $0.66 per
Class B Interest commencing July 18, 1997. Future distributions, with respect to
Class B Interests, will be subordinate to certain distributions with respect to
Class A Interests.

      Cash distributions to the Managing Trustee, the Special Beneficiary, and
the Beneficiaries are declared and generally paid within fifteen days following
the end of each month. The payment of such distributions is presented as a
component of financing activities. For the three months ended March 31, 1998,
the Trust declared total cash distributions of $1,355,400. The Beneficiaries
were allocated $1,230,026 ($733,969 for Class A Beneficiaries and $496,057 for
Class B Beneficiaries); the Special Beneficiary was allocated $111,820; and the
Managing Trustee was allocated $13,554.

      The nature of the Trust's principal cash flows gradually will shift from
rental receipts to equipment sale proceeds as the Trust matures. As this occurs,
the Trust's cash flows will become more volatile in that certain of the Trust's
equipment leases will be renewed and certain of its assets will be sold. In some
cases, the Trust may be required to expend funds to refurbish or otherwise
improve the equipment being remarketed in order to make it more desirable to a
potential lessee or purchaser. The Trust's Advisor, EFG, and the Managing
Trustee will attempt to monitor and manage these events to maximize the residual
value of the Trust's equipment and will consider these factors, in addition to
the collection of contractual rents, the retirement of scheduled indebtedness
and the Trust's future working capital and equipment requirements, in
establishing future cash distribution rates. Ultimately, the Beneficiaries
should expect that cash distribution rates will fluctuate over the long term as
a result of future remarketing activities.


                                       17
<PAGE>

                             AFG Investment Trust C

                                    FORM 10-Q

                           PART II. OTHER INFORMATION

      Item 1.              Legal Proceedings
                           Response:

                           Refer to Note 7 to the financial statements herein

      Item 2.              Changes in Securities
                           Response: None

      Item 3.              Defaults upon Senior Securities
                           Response: None

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

                           On May 5, 1998, the Trust filed a definitive
                           Solicitation Statement with the United States
                           Securities and Exchange Commission in connection
                           with the solicitation by the Trust of the consent
                           of the Beneficiaries to a proposed amendment to
                           the Second Amended and Restated Declaration of
                           Trust. The Solicitation Statement and accompanying
                           Consent of Beneficiary were mailed to all of the
                           Beneficiaries of the Trust on May 6, 1998. Refer
                           to Note 10 to the financial statements herein.

      Item 5.              Other Information
                           Response: None

      Item 6(a).           Exhibits
                           Response: None

      Item 6(b).           Reports on Form 8-K
                           Response: None


                                       18
<PAGE>

                                 SIGNATURE PAGE

      Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below on behalf of the registrant and in the capacity and
on the date indicated.

                             AFG Investment Trust C


                      By:  AFG ASIT Corporation, a Massachusetts
                           corporation and the Managing Trustee of
                           the Registrant.


                      By:  /s/ Michael J. Butterfield
                           --------------------------
                           Michael J. Butterfield
                           Treasurer of AFG ASIT Corporation
                           (Duly Authorized Officer and
                           Principal Accounting Officer)


                      Date: May 15, 1998
                            --------------------------


                      By:  /s/ Gary M. Romano
                           ---------------------------
                           Gary M. Romano
                           Clerk of AFG ASIT Corporation
                           (Duly Authorized Officer and
                           Principal Financial Officer)


                      Date: May 15, 1998
                            --------------------------


                                       19