<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. 0-21396

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

Delaware                                                          04-3145953
-----------------------------------                         -------------------
(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 been subject
to such filing requirements for the past 90 days.   Yes |_| No |_|

                               AFG Investment Trust A

                                     FORM 10-Q

<PAGE>

                                       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 Changes in Participants' Capital
         for the three months ended March 31, 1998                           5

      Statement of Cash Flows
         for the three months ended March 31, 1998 and 1997                  6

      Notes to the Financial Statements                                   7-13


   Item 2.  Management's Discussion and Analysis of Financial
         Condition and Results of Operations                             14-18

PART II.  OTHER INFORMATION:

   Items 1 - 6                                                              19


                                       2
<PAGE>

                               AFG Investment Trust A

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

                                    (Unaudited)

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

Cash and cash equivalents                                                   $         3,375,626        $         3,176,850
Restricted cash                                                                       2,606,496                  2,606,496
Rents receivable                                                                        376,569                    533,052
Accounts receivable - affiliate                                                         177,898                    305,209
Note receivable - affiliate                                                             462,353                    462,353
Investment securities - affiliate                                                       183,482                    157,270
Equipment at cost, net of accumulated depreciation
     of $11,570,333 and $11,445,495 at March 31, 1998
     and December 31, 1997, respectively                                              6,024,547                  6,817,333
                                                                            -------------------        -------------------

        Total assets                                                        $        13,206,971        $        14,058,563
                                                                            -------------------        -------------------
                                                                            -------------------        -------------------

LIABILITIES AND PARTICIPANTS' CAPITAL

Notes payable                                                               $         1,871,613        $         2,342,924
Accrued interest                                                                         21,549                     31,244
Accrued liabilities                                                                      21,438                     11,550
Accrued liabilities - affiliate                                                          17,791                     35,621
Deferred rental income                                                                    6,585                     79,776
Cash distributions payable to participants                                              195,306                    195,306
                                                                            -------------------        -------------------

        Total liabilities                                                             2,134,282                  2,696,421
                                                                            -------------------        -------------------

Participants' capital (deficit):
     Managing Trustee                                                                    (9,550)                   (12,052)
     Special Beneficiary                                                                (76,321)                   (92,015)
     Class A Beneficiary Interests (483,816 Interests,
       initial purchase price of $25 each)                                            8,159,406                  8,357,529
     Class B Beneficiary Interests (826,072 Interests;
       initial purchase price of $5 each)                                             3,619,165                  3,728,691
     Treasury Interests (65,402 Interests at Cost)                                     (620,011)                  (620,011)
                                                                            -------------------        -------------------

         Total participants' capital                                                 11,072,689                 11,362,142
                                                                            -------------------        -------------------

         Total liabilities and participants' capital                        $        13,206,971        $        14,058,563
                                                                            -------------------        -------------------
                                                                            -------------------        -------------------
</TABLE>

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


                                       3
<PAGE>

                               AFG Investment Trust A

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

                                    (Unaudited)

<TABLE>
<CAPTION>
                                                              1998                     1997
                                                        ---------------          ---------------
<S>                                                       <C>                      <C>          
Income:

     Lease revenue                                        $     731,888            $   1,179,837

     Interest income                                             78,871                   25,800

     Interest income - affiliate                                 11,559                       --

     Gain (loss) on sale of equipment                            (1,298)                   2,095
                                                          -------------            -------------

         Total income                                           821,020                1,207,732
                                                          -------------            -------------
Expenses:

     Depreciation and amortization                              653,588                  932,497

     Interest expense                                            32,136                   43,358

     Equipment management fees - affiliate                       33,126                   44,578

     Operating expenses - affiliate                              50,233                   38,857
                                                          -------------            -------------

         Total expenses                                         769,083                1,059,290
                                                          -------------            -------------

Net income                                                $      51,937            $     148,442
                                                          -------------            -------------
                                                          -------------            -------------

Net income
     per Class A Beneficiary Interest                     $          --            $        0.25
                                                          -------------            -------------
                                                          -------------            -------------

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

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 A

                  STATEMENT OF CHANGES IN PARTICIPANTS' CAPITAL
                   for the three months ended March 31, 1998

                                   (Unaudited)

<TABLE>
<CAPTION>
                                          Managing        Special            Class A Beneficiaries    
                                          Trustee       Beneficiary    -----------------------------
                                           Amount         Amount          Interests        Amount      
                                        ------------  --------------   --------------  -------------   

<S>                                     <C>           <C>                     <C>      <C>             
Balance at December 31, 1997            $    (12,052) $      (92,015)         483,816  $     8,357,529  

     Net income                                5,916          46,021               --               -- 

     Unrealized gain on investment
        securities - affiliate                   262              --               --               -- 
                                        ------------  --------------   --------------  --------------- 

Comprehensive income                           6,178          46,021               --               -- 
                                        ------------  --------------   --------------  --------------- 

Cash distributions declared                   (3,676)        (30,327)              --         (198,123)
                                        ------------  --------------   --------------  --------------- 

Balance at March 31, 1998               $     (9,550) $      (76,321)         483,816  $     8,159,406 
                                        ------------  --------------   --------------  --------------- 
                                        ------------  --------------   --------------  --------------- 
</TABLE>

<TABLE>
<CAPTION>

                                       Class B Beneficiaries 
                                   -----------------------------        Treasury                    
                                      Interests        Amount           Interests        Total      
                                   --------------  -------------    --------------   --------------
                                                                                                    
<S>                                       <C>      <C>              <C>             <C>             
Balance at December 31, 1997              826,072  $     3,728,691  $     (620,011) $    11,362,142 
                                                                                                    
     Net income                                --               --              --           51,937 
                                                                                                    
     Unrealized gain on investment                                                                  
        securities - affiliate                 --           25,950              --           26,212 
                                   --------------  ---------------  --------------  --------------- 
                                                                                                    
Comprehensive income                           --           25,950              --           78,149 
                                   --------------  ---------------  --------------  --------------- 
                                                                                                    
Cash distributions declared                    --         (135,476)             --         (367,602)
                                   --------------  ---------------  --------------  --------------- 
                                                                                                    
Balance at March 31, 1998                 826,072  $     3,619,165  $     (620,011) $    11,072,689 
                                   --------------  ---------------  --------------  --------------- 
                                   --------------  ---------------  --------------  --------------- 

</TABLE>

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


                                       5
<PAGE>

                             AFG Investment Trust A

                             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                                                     $        51,937       $       148,442

Adjustments to reconcile net income to 
     net cash from operating activities:
         Depreciation and amortization                                 653,588               932,497
         (Gain) loss on sale of equipment                                1,298                (2,095)

Changes in assets and liabilities
     Decrease in:
         Rents receivable                                              156,483                34,792
         Accounts receivable - affiliate                               127,311                 6,910
     Increase (decrease) in:
         Accrued interest                                               (9,695)              (13,370)
         Accrued liabilities                                             9,888                (4,500)
         Accrued liabilities - affiliate                               (17,830)                3,088
         Deferred rental income                                        (73,191)               13,887
                                                               ---------------       ---------------

              Net cash from operating activities                       899,789             1,119,651
                                                               ---------------       ---------------
Cash flows from investing activities:
     Proceeds from equipment sales                                     137,900                12,500
                                                               ---------------       ---------------

              Net cash from investing activities                       137,900                12,500
                                                               ---------------       ---------------

Cash flows used in financing activities:
     Principal payments - notes payable                               (471,311)             (593,511)
     Distributions paid                                               (367,602)             (247,829)
                                                               ---------------       ---------------

              Net cash used in financing activities                   (838,913)             (841,340)
                                                               ---------------       ---------------

Net increase in cash and cash equivalents                              198,776               290,811

Cash and cash equivalents at beginning of period                     3,176,850             1,832,248
                                                               ---------------       ---------------

Cash and cash equivalents at end of period                     $     3,375,626       $     2,123,059
                                                               ---------------       ---------------
                                                               ---------------       ---------------

Supplemental disclosure of cash flow information:
     Cash paid during the period for interest                  $        41,831       $        56,728
                                                               ---------------       ---------------
                                                               ---------------       ---------------
</TABLE>

Supplemental disclosure of non-cash activity:
   See Note 5 to the financial statements regarding the recognition of an
   unrealized gain on the Trust's investment securities - affiliate during the
   three months ended March 31, 1998.


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


                                       6
<PAGE>

                             AFG Investment Trust A

                        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.

   As of January 1, 1998, the Company adopted Statement 130, Reporting
Comprehensive Income. Statement 130 establishes new rules for the reporting and
display of comprehensive income and its components; however, the adoption of
this Statement had no impact on the Trust's net income or participants' capital.
Statement 130 requires unrealized gains or losses on the Trust's
available-for-sale securities, which prior to adoption were reported separately
in participants' capital, to be included in comprehensive income. During the
first quarter of 1998, total comprehensive income amounted to $78,149.

NOTE 2 - CASH

   At March 31, 1998, the Trust had $5,751,093 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 $2,606,496 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 (see Note 9) and to redeem Class A Interests (see Note 10). 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. 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
$1,921,061 are due as follows:

<TABLE>
<CAPTION>
<S>                                               <C>
   For the year ending March 31, 1999             $ 1,104,308
                                 2000                 277,832
                                 2001                 223,771
                                 2002                 179,149
                                 2003                 136,001
                                                  -----------
                                Total             $ 1,921,061
                                                  -----------
                                                  -----------
</TABLE>


                                       7
<PAGE>

                             AFG Investment Trust A

                        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 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             $ 6,814,662
Materials handling                          0-30               2,876,902
Retail store fixtures                       0-12               2,527,721
Communications                                 9               1,802,423
Computers and peripherals                    0-6               1,345,094
Construction and mining                     0-57               1,206,181
Research and test                              0                 459,282
Manufacturing                                  3                 442,590
Energy systems                                 0                 108,975
Photocopying                                  19                  11,050
                                                             -----------

                            Total equipment cost              17,594,880

                        Accumulated depreciation             (11,570,333)
                                                             -----------

      Equipment, net of accumulated depreciation             $ 6,024,547
                                                             -----------
                                                             -----------
</TABLE>

   At March 31, 1998, the Trust's equipment portfolio included equipment having
a proportionate original cost of $6,750,905, representing approximately 38% of
total equipment cost.

   At March 31, 1998, the cost and net book value of equipment held for sale or
re-lease was approximately $2,198,000 and $891,000, 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 $1,153,983 and $754,295, 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.

NOTE 5 - INVESTMENT SECURITIES - AFFILIATE / NOTE RECEIVABLE - AFFILIATE

   On April 30, 1997, the vessel partnerships, in which the Trust and certain
affiliated investment programs are limited partners and through which the Trust
and the affiliated investment programs shared economic interests in three cargo
vessels (the "Vessels") leased by Gearbulk Shipowning Ltd (formerly Kristian
Gerhard Jebsen Skipsrederi A/S) (the "Lessee"), exchanged their ownership
interests in the Vessels for aggregate consideration of $11,565,375, consisting
of 1,987,000 newly issued shares (at $1.50 per share) of common stock in Semele
Group, Inc. (formerly Banyan Strategic Land Fund II) ("Semele"), a purchase
money note of $8,219,500 (the "Note") and cash of $365,375. Semele is a Delaware
corporation organized on April 14, 1987 and has its common stock listed on
NASDAQ. At the date of the exchange transaction, the common stock of Semele had
a net book value of approximately $1.50 per share and closing market value of
$1.00 per share. Semele has one principal real estate asset consisting of an
undeveloped 274 acre parcel of land near Malibu, California ("Rancho Malibu").

                                       8
<PAGE>

                             AFG Investment Trust A

                        Notes to the Financial Statements

                                   (Continued)

   The exchange was organized through an intermediary company (Equis Exchange
LLC, 99% owned by Semele and 1% owned by EFG), which was established for the
sole purpose of facilitating the exchange. There were no fees paid to EFG by
Equis Exchange LLC or Semele or by any other party that otherwise would not have
been paid to EFG had the Trust sold its beneficial interest in the Vessels
directly to the Lessee. The Lessee prepaid all of its remaining contracted
rental obligations and purchased the Vessels in two closings occurring on May 6,
1997 and May 12, 1997. The Note was repaid with $3,800,000 of cash and delivery
of a $4,419,500 note from Semele (the "Semele Note").

   As a result of the exchange transaction and its original 33% beneficial
ownership interest in Hato Arrow, one of the three Vessels, the Trust received
$433,036 in cash, became the beneficial owner of 209,694 shares of Semele common
stock (valued at $314,541 ($1.50 per share) at the time of the exchange
transaction) and received a beneficial interest in the Semele Note of $462,353.
The Semele Note bears an annual interest rate of 10% and will be amortized over
three years with mandatory principal reductions, if and to the extent that net
proceeds are received by Semele from the sale or refinancing of Rancho Malibu.
The Trust recognized interest income of $11,559 related to the Semele Note
during the three months ended March 31, 1998. The Trust's interest in the vessel
had an original cost and net book value of $2,399,580 and $1,185,726,
respectively. The proceeds realized by the Trust of $777,326 resulted in a net
loss, for financial statement purposes, of $408,400. In addition, as this vessel
was disposed of prior to the expiration of the related lease term, the Trust
received a prepayment of the remaining contracted rent due under the vessel's
lease agreement of $432,604.

   Cash equal to the amount of the Semele Note was placed in escrow for the
benefit of Semele in a segregated account pending the outcome of certain
shareholder proposals. Specifically, as part of the exchange, Semele agreed to
seek consent ("Consent") from its shareholders to: (1) amend its certificate of
incorporation and by-laws; (2) make additional amendments to restrict the
acquisition of its common stock in a way to protect Semele's net operating loss
carry-forwards, and (3) engage EFG to provide administrative services to Semele,
which services EFG will provide at cost. On October 21, 1997, such Consent was
obtained from Semele's shareholders. The Consent also allowed for (i) the
election of a new Board of Directors nominated by EFG for terms of up to three
years and an increase in the size of the Board to as many as nine members,
provided a majority of the Board shall consist of members independent of Semele,
EFG or any affiliate; and (ii) an amendment extending Semele's life to perpetual
and changing its name from Banyan Strategic Land Fund II. Contemporaneously with
the Consent being obtained, Semele declared a $0.20 per share dividend to be
paid on all shares, including those beneficially owned by the Trust. A dividend
of $41,939 was paid to the Trust on November 17, 1997. This dividend represented
a return of equity to the Trust, which proportionately reduced the Trust's
investment in Semele. Subsequent to the exchange transaction, Gary D. Engle,
President and Chief Executive Officer of EFG, was elected to the Board of
Directors and appointed Chief Executive Officer of Semele and James A. Coyne,
Executive Vice President of EFG was appointed Semele's President and Chief
Operating Officer, and elected to the Board of Directors.

   In accordance with the Financial Accounting Standard Board's Statement No.
115, Accounting for Certain Investments in Debt and Equity Securities,
marketable equity securities classified as available-for-sale are required to be
carried at fair value. During the three months ended March 31, 1998, the Trust
increased the carrying value of its investment in Semele common stock to $0.875
per share (the quoted price of the Semele stock on NASDAQ at March 31, 1998)
resulting in an unrealized gain in 1998 of $26,212. This gain was reported as a
component of comprehensive income, included in participants' capital.

                                       9
<PAGE>

                             AFG Investment Trust A

                        Notes to the Financial Statements

                                   (Continued)

NOTE 6 - 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 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 management fees           $  33,126     $   44,578
   Administrative charges                 17,070         10,134
   Reimbursable operating expenses
      due to third parties                33,163         28,723
                                       ---------     ----------

                        Total          $  83,359     $   83,435
                                       ---------     ----------
                                       ---------     ----------
</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 $177,898 by EFG for such funds and the interest
thereon. These funds were remitted to the Trust in April 1998.

   Refer to Note 9 regarding the purchase of Class B Interests by an affiliate,
Equis II Corporation and the change in ownership of the Managing Trustee.

NOTE 7 - NOTES PAYABLE

   Notes payable at March 31, 1998 consisted of installment notes of $1,871,613
payable to banks and institutional lenders. The notes bear interest rates
ranging between 5.7% and 8.9%, 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 a balloon
payment obligation of $282,421 at the expiration of the primary lease term
related to the aircraft leased to Reno Air, Inc. The carrying amount of notes
payable approximates fair value at March 31, 1998.

   The annual maturities of the notes payable are as follows:

<TABLE>
<CAPTION>
<S>                                         <C>
   For the year ending March 31, 1999       $ 1,142,538
                                 2000           111,702
                                 2001           120,800
                                 2002           130,639
                                 2003           365,934
                                            -----------
                                Total       $ 1,871,613
                                            -----------
                                            -----------
</TABLE>

                                       10
<PAGE>

                             AFG Investment Trust A

                        Notes to the Financial Statements

                                   (Continued)

NOTE 8 - 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 11). 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 


                                       11
<PAGE>

                             AFG Investment Trust A

                        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 9 - 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 "Amended Trust Agreement") which would (i)
amend the provisions of the Amended 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 Amended 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
Class A Beneficiaries.

    Pursuant to the Amended 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 Class A Beneficiaries. A majority of Class
A Interests, representing 286,868 Interests or 52.2% of all Class A Interests,
voted in favor of the Amendment; 49,019 Interests or 8.9% of all Class A
Interests voted against the Amendment; and 16,104 Interests or 2.9% of all Class
A Interests abstained. Approximately 64% of all Class A Interests participated
in the vote. Accordingly, the Amended 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 826,072 Class B Interests at $5.00 per interest, thereby generating
$4,130,360 in aggregate Class B capital contributions. Class A Beneficiaries
purchased 3,209 Class B Interests, generating $16,045 of such aggregate capital
contributions, and the Special Beneficiary, EFG, purchased 822,863 Class B
Interests, generating $4,114,315 of such aggregate capital contributions. The
Trust incurred offering costs in the amount of $41,304 and professional service
costs of $54,186 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 $808,363, to Class A Beneficiaries on August 15, 1997. See Note 10
regarding the redemption of Class A Interests.


                                       12
<PAGE>

                             AFG Investment Trust A

                        Notes to the Financial Statements

                                   (Continued)

NOTE 10 - REDEMPTION OF CLASS A INTERESTS

   On August 7, 1997, the Trust commenced an offer to purchase up to 45% of the
outstanding Class A Beneficiary 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 concerning the offer. On October 10, 1997, the Trust
used $620,011 of the net proceeds realized from the issuance of the Class B
Interests to purchase 65,402 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. 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 (see also Note
11).

NOTE 11 - 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 accompanying
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 8 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 $413,247 (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, 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 $929,806 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 8, 1996, will be
reinstated until December 31, 2001; 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 1,702 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 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.


                                       13
<PAGE>

                             AFG Investment Trust A

                                    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 A (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 8 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 8 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 $731,888, compared to $1,179,837 for the same period in 1997. The decrease in
lease revenue from 1997 to 1998 resulted principally from primary lease term
expirations, the sale of equipment and the exchange in the second quarter of
1997 of the Trust's interest in a vessel for consideration consisting of newly
issued shares of common stock in Semele Group, Inc. (formerly Banyan Strategic
Land Fund II) ("Semele"), a note receivable from Semele and cash (see Note 5 to
the financial statements herein). During the three months ended March 31, 1997,
the Trust recognized lease revenue of $178,195 related to this vessel. 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 11 to the
accompanying financial statements.


                                       14
<PAGE>

                             AFG Investment Trust A

                                    FORM 10-Q

                          PART I. FINANCIAL INFORMATION

   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 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 $90,430
compared to $25,800 for the same period in 1997. Interest income is typically
generated from temporary investment of rental receipts and equipment sale
proceeds in short-term instruments. Interest income in 1998 included $11,559
earned on the note receivable from Semele and interest earned on unexpended
proceeds resulting from the issuance of Class B Interests (see below). The
amount of future interest income is expected to 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 $139,198 to existing lessees and third parties. These sales
resulted in a net loss, for financial statement purposes, of $1,298 compared to
a net gain of $2,095 on equipment having a net book value of $10,405 during the
same period in 1997.

   It cannot be determined whether future sales of equipment will result in a
net gain or a 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 which will 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 $653,588 and $932,497 for the three
month periods 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 $32,136 during the three months ended March 31, 1998
compared to $43,358 for the same period in 1997. Interest expense in future
periods will continue to decline in amount as the principal balance of notes
payable is reduced through the application of rent receipts to outstanding
indebtedness.

   Management fees were 4.5% and 3.8% of lease revenue during 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.


                                       15
<PAGE>

                             AFG Investment Trust A

                                    FORM 10-Q

                          PART I. FINANCIAL INFORMATION

   Operating expenses consist principally of administrative charges,
professional service costs, such as audit and legal fees, as well as printing,
distribution and remarketing expenses. Collectively, operating expenses
represented 6.9% and 3.3% of lease revenue during the three months ended March
31, 1998 and 1997, respectively. The increase in operating expenses from 1997 to
1998 was due primarily to professional service costs incurred in connection with
the Solicitation Statement described in Note 11 to the accompanying financial
statements and an increase in administrative charges. 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. Operating activities generated net cash
inflows of $899,789 and $1,119,651 for the three months ended March 31, 1998 and
1997, respectively. Future renewal, re-lease and equipment sale activities will
cause a gradual decline in the Trust's primary-term lease revenue and
corresponding sources of operating cash. 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 realized from asset disposal transactions is reported under investing
activities on the accompanying Statement of Cash Flows. During the three months
ended March 31, 1998, the Trust realized net cash proceeds of $137,900 compared
to $12,500 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.

   In accordance with the Financial Accounting Standard Board's Statement No.
115, Accounting for Certain Investments in Debt and Equity Securities,
marketable equity securities classified as available-for-sale are required to be
carried at fair value. During the three months ended March 31, 1998, the Trust
increased the carrying value of its investment in Semele common stock to $0.875
per share (the quoted price of the Semele stock on NASDAQ at March 31, 1998)
resulting in an unrealized gain in 1998 of $26,212. This gain was reported as a
component of comprehensive income, included in participants' capital. The
Managing Trustee believes that the underlying tangible assets of Semele,
particularly the Rancho Malibu property, can be sold or developed on a tax free
basis due to Semele's net operating loss carryforwards and can provide an
attractive economic return to the Trust.


                                       16
<PAGE>

                             AFG Investment Trust A

                                    FORM 10-Q

                          PART I. FINANCIAL INFORMATION

   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 payments are collected, a portion or all
of the rental payment is used to repay the associated indebtedness. In future
periods, the amount of cash used to repay debt obligations will decline as the
principal balance of notes payable is reduced through the collection and
application of rents. However, the Trust has a balloon payment obligation of
$282,421 at the expiration of the primary lease term related to the aircraft
leased to Reno Air, Inc.

   For financial reporting purposes, the Managing Trustee and the Special
Beneficiary each has accumulated a capital deficit at March 31, 1998. This is
the result of aggregate cash distributions to these Participants being in excess
of their aggregate capital contributions ($1,000 each) and their respective
allocations of financial statement net income or loss. Ultimately, the existence
of a capital deficit for the Managing Trustee or the Special Beneficiary for
financial reporting purposes is not indicative of any further capital
obligations to the Trust by either the Managing Trustee or the Special
Beneficiary. However, for income tax purposes, the Trust Agreement requires that
income be allocated first to those Participants having negative tax capital
account balances so as to eliminate any such balances. 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 positive tax capital account balance.

   At March 31, 1998, the Trust had aggregate future minimum lease payments of
$1,921,061 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 $1,871,613 (see Note 7 to the financial statements).
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 826,072 Class B Interests at $5.00 per
interest, thereby generating $4,130,360 in aggregate Class B capital
contributions. Class A Beneficiaries purchased 3,209 Class B Interests,
generating $16,045 of such aggregate capital contributions, and the Special
Beneficiary, EFG, purchased 822,863 Class B Interests, generating $4,114,315 of
such aggregate capital contributions. The Trust incurred offering costs in the
amount of $41,304 and professional service costs of $54,186 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 (see also Note 9 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 to
the Class A Beneficiaries of the Trust. The Managing Trustee declared and paid
this special cash 


                                       17
<PAGE>

                             AFG Investment Trust A

                                    FORM 10-Q

                          PART I. FINANCIAL INFORMATION

distribution of approximately $1.47 per Class A Interest, aggregating $808,363,
to Class A Beneficiaries on August 15, 1997.

   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 $620,011 of the net proceeds realized from the issuance of the Class
B Interests to purchase 65,402 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 $2,606,496
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
10 and 11 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 sustained this distribution rate throughout 1997 and the first
quarter of 1998. For the Class B Beneficiaries, the Managing Trustee established
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 45 days following the end
of each calendar 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 $367,602. Of the total
distributions, the Beneficiaries were allocated $333,599 ($198,123 for Class A
Beneficiaries and $135,476 for Class B Beneficiaries); the Special Beneficiary
was allocated $30,327; and the Managing Trustee was allocated $3,676.

   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.


                                       18
<PAGE>

                             AFG Investment Trust A

                                    FORM 10-Q

                           PART II. OTHER INFORMATION

      Item 1.              Legal Proceedings
                           Response:

                           Refer to Note 8 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 11 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


                                       19
<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 A


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


                     By:   /s/ Michael J. Butterfield
                           ----------------------------------------------
                           Michael J. Butterfield
                           Treasurer 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
                           ----------------------------------------------


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