<PAGE>   1

                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                    FORM 10-Q


[X]     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
        EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1998

                                       OR

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


                         Commission file number 0-27496

                       CRONOS GLOBAL INCOME FUND XVI, L.P.
             (Exact name of registrant as specified in its charter)


               California                            94-3230380
    (State or other jurisdiction of                (I.R.S. Employer
     incorporation or organization)               Identification No.)

         444 Market Street, 15th Floor, San Francisco, California 94111
               (Address of principal executive offices) (Zip Code)

                                 (415) 677-8990
              (Registrant's telephone number, including area code)


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 [ ].



                                       1
<PAGE>   2

                       CRONOS GLOBAL INCOME FUND XVI, L.P.

                  REPORT ON FORM 10-Q FOR THE QUARTERLY PERIOD
                               ENDED JUNE 30, 1998

                                TABLE OF CONTENTS


<TABLE>
<CAPTION>
                                                                                                                     PAGE
<S>                                                                                                                  <C>
PART I - FINANCIAL INFORMATION

  Item 1.  Financial Statements
           Balance Sheets - June 30, 1998 (unaudited) and December 31, 1997                                             4
           Statements of Operations for the three and six months ended June 30, 1998 and 1997 (unaudited)               5
           Statements of Cash Flows for the six months ended June 30, 1998 and 1997 (unaudited)                         6
           Notes to Financial Statements (unaudited)                                                                    7
  Item 2.  Management's Discussion and Analysis of Financial Condition and Results of Operations                       10
  Item 3.  Quantitative and Qualitative Disclosures About Market Risk                                                  12

PART II -  OTHER INFORMATION
  Item 1.  Legal Proceedings                                                                                           13
  Item 3.  Defaults Upon Senior Securities                                                                             14
  Item 5.  Other Information                                                                                           14
  Item 6.  Exhibits and Reports on Form 8-K                                                                            16
</TABLE>



                                       2
<PAGE>   3

                         PART I - FINANCIAL INFORMATION


Item 1. Financial Statements

        Presented herein are the Registrant's balance sheets as of June 30, 1998
        and December 31, 1997, statements of operations for the three and six
        months ended June 30, 1998 and 1997, and statements of cash flows for
        the six months ended June 30, 1998 and 1997.



                                       3
<PAGE>   4

                       CRONOS GLOBAL INCOME FUND XVI, L.P.

                                 BALANCE SHEETS

                                   (UNAUDITED)


<TABLE>
<CAPTION>
                                                                                              June 30,             December 31,
                                                                                                1998                   1997
                                                                                            ------------           ------------
                    Assets

<S>                                                                                         <C>                    <C>         
Current assets:
    Cash and cash equivalents, includes $1,591,819 at June 30, 1998 and $1,231,959
       at December 31, 1997 in interest-bearing accounts                                    $  1,591,919           $  1,232,159
    Net lease receivables due from Leasing Company
       (notes 1 and 2)                                                                           485,296                572,740
                                                                                            ------------           ------------

           Total current assets                                                                2,077,215              1,804,899
                                                                                            ------------           ------------

Container rental equipment, at cost                                                           26,710,954             26,755,856
    Less accumulated depreciation                                                              3,219,153              2,442,049
                                                                                            ------------           ------------
       Net container rental equipment                                                         23,491,801             24,313,807
                                                                                            ------------           ------------

Organizational costs, net                                                                        155,615                180,594
                                                                                            ------------           ------------

                                                                                            $ 25,724,631           $ 26,299,300
                                                                                            ============           ============
               Partners' Capital

Partners' capital (deficit):
    General partner                                                                         $     (2,245)          $     (4,653)
    Limited partners                                                                          25,726,876             26,303,953
                                                                                            ------------           ------------

           Total partners' capital                                                            25,724,631             26,299,300
                                                                                            ------------           ------------

                                                                                            $ 25,724,631           $ 26,299,300
                                                                                            ============           ============
</TABLE>



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



                                       4
<PAGE>   5

                       CRONOS GLOBAL INCOME FUND XVI, L.P.

                            STATEMENTS OF OPERATIONS

                                   (UNAUDITED)



<TABLE>
<CAPTION>
                                                                Three Months Ended                       Six Months Ended
                                                          ------------------------------          ------------------------------
                                                           June 30,             June 30,            June 30,             June 30,
                                                             1998                1997                 1998                1997
                                                          ----------          ----------          ----------          ----------

<S>                                                       <C>                 <C>                 <C>                 <C>       
Net lease revenue (notes 1 and 3)                         $  767,808          $  769,433          $1,481,109          $1,431,911

Other operating expenses:
    Depreciation                                             403,360             402,935             806,463             793,949
    Other general and administrative expenses                 16,831              19,392              30,897              32,761
                                                          ----------          ----------          ----------          ----------
                                                             420,191             422,327             837,360             826,710
                                                          ----------          ----------          ----------          ----------

       Earnings from operations                              347,617             347,106             643,749             605,201

Other income:
    Interest income                                           19,891              17,805              36,302              42,723
    Net gain on disposal of equipment                             --               1,321               8,237               3,352
                                                          ----------          ----------          ----------          ----------
                                                              19,891              19,126              44,539              46,075
                                                          ----------          ----------          ----------          ----------

       Net earnings                                       $  367,508          $  366,232          $  688,288          $  651,276
                                                          ==========          ==========          ==========          ==========

Allocation of net earnings:
    General partner                                       $   29,323          $   30,226          $   65,552          $   56,913
    Limited partners                                         338,185             336,006             622,736             594,363
                                                          ----------          ----------          ----------          ----------

                                                          $  367,508          $  366,232          $  688,288          $  651,276
                                                          ==========          ==========          ==========          ==========

Limited partners' per unit share of net earnings          $     0.20          $     0.33          $     0.39          $     0.59
                                                          ==========          ==========          ==========          ==========
</TABLE>



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



                                       5
<PAGE>   6

                       CRONOS GLOBAL INCOME FUND XVI, L.P.

                            STATEMENTS OF CASH FLOWS

                                   (UNAUDITED)




<TABLE>
<CAPTION>
                                                                            Six Months Ended
                                                                    ---------------------------------
                                                                      June 30,              June 30,
                                                                        1998                  1997
                                                                    -----------           -----------
<S>                                                                 <C>                   <C>        
Net cash provided by operating activities                           $ 1,553,236           $ 1,293,383

Cash flows provided by (used in) investing activities:
    Proceeds from disposal of equipment                                  69,416                    --
    Purchase of container rental equipment                                   --            (2,340,840)
    Acquisition fees paid to general partner                                 --              (117,268)
                                                                    -----------           -----------

       Net cash provided by (used in) investing activities               69,416            (2,458,108)
                                                                    -----------           -----------

Cash flows provided by (used in) financing activities:
    Capital contributions                                                    --             1,931,060
    Underwriting commissions                                                 --              (193,196)
    Offering and organizational expenses                                     --               (99,850)
    Distribution to partners                                         (1,262,892)           (1,177,057)
                                                                    -----------           -----------


       Net cash provided by (used in) financing activities           (1,262,892)              460,957
                                                                    -----------           -----------

Net increase (decrease) in cash and cash equivalents                    359,760              (703,768)


Cash and cash equivalents at January 1                                1,232,159             1,755,884
                                                                    -----------           -----------


Cash and cash equivalents at June 30                                $ 1,591,919           $ 1,052,116
                                                                    ===========           ===========
</TABLE>



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



                                       6
<PAGE>   7

                       CRONOS GLOBAL INCOME FUND XVI, L.P.

                     NOTES TO UNAUDITED FINANCIAL STATEMENTS


(1)   Summary of Significant Accounting Policies

      (a) Nature of Operations

          Cronos Global Income Fund XVI, L.P. (the "Partnership") is a limited
          partnership organized under the laws of the State of California on
          September 1, 1995, for the purpose of owning and leasing marine cargo
          containers, special purpose containers and container related
          equipment. Cronos Capital Corp. ("CCC") is the general partner and,
          with its affiliate Cronos Containers Limited (the "Leasing Company"),
          manages and controls the business of the Partnership. The Partnership
          shall continue until December 31, 2015, unless sooner terminated upon
          the occurrence of certain events.

          The Partnership commenced operations on March 29, 1996, when the
          minimum subscription proceeds of $2,000,000 were received from over
          100 subscribers (excluding from such count Pennsylvania residents, the
          general partner, and all affiliates of the general partner). On
          February 3, 1997, CCC suspended the offer and sale of units in the
          Partnership. The offering terminated on December 27, 1997.

          As of June 30, 1998, the Partnership operated 3,836 twenty-foot, 1,046
          forty-foot and 459 forty-foot high-cube marine dry cargo containers,
          90 twenty-foot and 299 forty-foot refrigerated containers, and 52
          twenty-four thousand-liter tanks.

      (b) Leasing Company and Leasing Agent Agreement

          The Partnership has entered into a Leasing Agent Agreement whereby the
          Leasing Company has the responsibility to manage the leasing
          operations of all equipment owned by the Partnership. Pursuant to the
          Agreement, the Leasing Company is responsible for leasing, managing
          and re-leasing the Partnership's containers to ocean carriers and has
          full discretion over which ocean carriers and suppliers of goods and
          services it may deal with. The Leasing Agent Agreement permits the
          Leasing Company to use the containers owned by the Partnership,
          together with other containers owned or managed by the Leasing Company
          and its affiliates, as part of a single fleet operated without regard
          to ownership. Since the Leasing Agent Agreement meets the definition
          of an operating lease in Statement of Financial Accounting Standards
          (SFAS) No. 13, it is accounted for as a lease under which the
          Partnership is lessor and the Leasing Company is lessee.

          The Leasing Agent Agreement generally provides that the Leasing
          Company will make payments to the Partnership based upon rentals
          collected from ocean carriers after deducting direct operating
          expenses and management fees to CCC and the Leasing Company. The
          Leasing Company leases containers to ocean carriers, generally under
          operating leases which are either master leases or term leases (mostly
          two to five years). Master leases do not specify the exact number of
          containers to be leased or the term that each container will remain on
          hire but allow the ocean carrier to pick up and drop off containers at
          various locations; rentals are based upon the number of containers
          used and the applicable per-diem rate. Accordingly, rentals under
          master leases are all variable and contingent upon the number of
          containers used. Most containers are leased to ocean carriers under
          master leases; leasing agreements with fixed payment terms are not
          material to the financial statements. Since there are no material
          minimum lease rentals, no disclosure of minimum lease rentals is
          provided in these financial statements.



                                                                     (Continued)

                                       7
<PAGE>   8

                       CRONOS GLOBAL INCOME FUND XVI, L.P.

                     NOTES TO UNAUDITED FINANCIAL STATEMENTS


      (c) Basis of Accounting

          The Partnership utilizes the accrual method of accounting. Net lease
          revenue is recorded by the Partnership in each period based upon its
          leasing agent agreement with the Leasing Company. Net lease revenue is
          generally dependent upon operating lease rentals from operating lease
          agreements between the Leasing Company and its various lessees, less
          direct operating expenses and management fees due in respect of the
          containers specified in each operating lease agreement.

      (d) Financial Statement Presentation

          These financial statements have been prepared without audit. Certain
          information and footnote disclosures normally included in financial
          statements prepared in accordance with generally accepted accounting
          procedures have been omitted. It is suggested that these financial
          statements be read in conjunction with the financial statements and
          accompanying notes in the Partnership's latest annual report on Form
          10-K.

          The preparation of financial statements in conformity with generally
          accepted accounting principles (GAAP) requires the Partnership to make
          estimates and assumptions that affect the reported amounts of assets
          and liabilities and disclosure of contingent assets and liabilities at
          the date of the financial statements and the reported amounts of
          revenues and expenses during the reported period. Actual results could
          differ from those estimates.

          The interim financial statements presented herewith reflect all
          adjustments of a normal recurring nature which are, in the opinion of
          management, necessary to a fair statement of the financial condition
          and results of operations for the interim periods presented.


(2)   Net Lease Receivables Due from Leasing Company

      Net lease receivables due from the Leasing Company are determined by
      deducting direct operating payables and accrued expenses, base management
      fees payable, and reimbursed administrative expenses payable to CCC and
      its affiliates from the rental billings payable by the Leasing Company to
      the Partnership under operating leases to ocean carriers for the
      containers owned by the Partnership. Net lease receivables at June 30,
      1998 and December 31, 1997 were as follows:


<TABLE>
<CAPTION>
                                                                 June 30,          December 31,
                                                                   1998                1997
                                                                ----------          ----------
<S>                                                             <C>                 <C>       
Lease receivables, net of doubtful accounts of $78,851
  at June 30, 1998 and $61,992 at December 31, 1997             $1,008,968          $1,051,836
Less:
Direct operating payables and accrued expenses                     361,974             326,518
Damage protection reserve                                           75,293              60,999
Base management fees                                                67,686              70,754
Reimbursed administrative expenses                                  18,719              20,825
                                                                ----------          ----------

                                                                $  485,296          $  572,740
                                                                ==========          ==========
</TABLE>



                                                                     (Continued)

                                       8
<PAGE>   9

                       CRONOS GLOBAL INCOME FUND XVI, L.P.

                     NOTES TO UNAUDITED FINANCIAL STATEMENTS


(3)   Net Lease Revenue

      Net lease revenue is determined by deducting direct operating expenses,
      base management fees and reimbursed administrative expenses to CCC and its
      affiliates from the rental revenue billed by the Leasing Company under
      operating leases to ocean carriers for the containers owned by the
      Partnership. Net lease revenue for the three and six-month periods ended
      June 30, 1998 and 1997 was as follows:


<TABLE>
<CAPTION>
                                                   Three Months Ended                       Six Months Ended
                                             ------------------------------          ------------------------------
                                              June 30,            June 30,            June 30,             June 30,
                                                1998                1997                1998                1997
                                             ----------          ----------          ----------          ----------
<S>                                          <C>                 <C>                 <C>                 <C>       
Rental revenue                               $1,056,286          $1,089,942          $2,137,161          $2,036,733
Less:
Rental equipment operating expenses             166,829             185,171             392,408             351,419
Base management fees                             72,240              75,649             146,414             141,700
Reimbursed administrative expenses               49,409              59,689             117,230             111,703
                                             ----------          ----------          ----------          ----------

                                             $  767,808          $  769,433          $1,481,109          $1,431,911
                                             ==========          ==========          ==========          ==========
</TABLE>



                                       9
<PAGE>   10

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

It is suggested that the following discussion be read in conjunction with the
Registrant's most recent annual report on Form 10-K.


1)    Material changes in financial condition between June 30, 1998 and December
      31, 1997.

      At June 30, 1998, the Registrant had $1,591,919 in cash and cash
      equivalents, an increase of $359,760 from the December 31, 1997 cash
      balances. At June 30, 1998, the Registrant had approximately $89,000 in
      cash generated from equipment sales reserved as part of its cash balances.
      Throughout the remainder of 1998, the Registrant expects to use cash
      generated from equipment sales to purchase and replace containers which
      have been lost or damaged beyond repair.

      The Registrant's cash distribution from operations for the second quarter
      of 1998 was 7.5% (annualized) of the limited partners' original capital
      contribution, unchanged from the first quarter of 1998. These
      distributions are directly related to the Registrant's results from
      operations and may fluctuate accordingly.

      Imbalances and reductions in trade volumes, fueled by the economic crisis
      in Asia, continue to affect the container leasing market and Partnership
      operations. Containerships leaving Asia are operating at full capacity.
      Yet, on the return eastbound trip they are going back to Asia with only a
      fraction of their holds utilized. This results in a shortage of containers
      available for exporting cargo from Asia and a surplus of containers in
      locations of low demand. As a consequence of this imbalance, container
      leasing companies are repositioning empty containers from low-demand
      locations back to Asian ports in order to keep equipment at the source of
      cargo and, at the same time, reduce the effects of additional depot
      charges for idle equipment and lost revenue. While there is a cost
      incurred when repositioning an empty container, revenue is lost while it
      is in transit. In spite of these market pressures, strong trade with other
      parts of the world is compensating for the imbalances with Asia. There is
      renewed demand for leased containers in locations such as Mexico, Canada,
      China, and areas of Europe where trade volumes of containerized goods are
      prospering. In light of the current market conditions, the Registrant's
      focus remains centered on strategic planning in order to reduce equipment
      imbalances and on improving collections to maximize returns.


2)    Material changes in the results of operations between the three and
      six-month periods ended June 30, 1998 and 1997.

      Net lease revenue for the three and six-month periods ended June 30, 1998
      was $767,808 and $1,481,109, respectively, a decrease of less than 1% and
      an increase of 3% from the respective three and six-month periods in the
      prior year. Gross rental revenue (a component of net lease revenue) for
      the three and six-month periods ended June 30, 1998 was $1,056,286 and
      $2,137,161, respectively, reflecting a decrease of 3% and an increase of
      5% from the same respective three and six-month periods in the prior year.
      Dry container average per-diem rental rates for the three and six-month
      periods ended June 30, 1998 decreased 2% and 1%, respectively, when
      compared to the same three and six-month periods in the prior year.
      Refrigerated container average per-diem rental rates for the three and
      six-month periods ended June 30, 1998 declined less than 1% and 2%,
      respectively, when compared to the same periods in the prior year. Tank
      container average per-diem rental rates for the three and six-month
      periods ended June 30, 1998 declined 12% and 10%, respectively, when
      compared to the same periods in the prior year.



                                       10
<PAGE>   11


      The Registrant's average fleet size and utilization rates for the three
      and six-month periods ended June 30, 1998 and 1997 were as follows:


<TABLE>
<CAPTION>
                                                       Three Months Ended              Six Months Ended
                                                   ---------------------------      -------------------------
                                                    June 30,        June 30,         June 30,        June 30,
                                                      1998            1997             1998            1997
                                                   -----------     -----------      -----------     ---------
<S>                                                <C>             <C>              <C>             <C>
Average fleet size (measured in twenty-foot
    equivalent units (TEU))
       Dry cargo containers                          6,845           6,870           6,850           6,700
       Refrigerated containers                         688             690             689             690
       Tank containers                                  52              52              52              52
Average Utilization
       Dry cargo containers                             82%             87%             82%             82%
       Refrigerated containers                          99%             98%             98%             94%
       Tank containers                                  87%             90%             87%             87%
</TABLE>


      Rental equipment operating expenses were 16% and 18%, respectively, of the
      Registrant's gross lease revenue during the three and six-month periods
      ended June 30, 1998, as compared to 17% of the Registrant's gross lease
      revenue during the same three and six-month periods ended June 30, 1997.

      Year 2000

      The Registrant relies upon the financial and operational systems provided
      by the Leasing company and its affiliates, as well as the systems provided
      by other independent third parties to service the three primary areas of
      its business: investor processing/maintenance; container leasing/asset
      tracking; and accounting finance. The Registrant has received confirmation
      from its third-party investor processing/maintenance vendor that their
      system is Year 2000 compliant. The Registrant does not expect a material
      increase in its vendor servicing fee to reimburse Year 2000 costs.
      Container leasing/asset tracking and accounting/finance services are
      provided to the Registrant by CCC and its affiliate, Cronos Containers
      Limited (the "Leasing Company"), pursuant to the respective Limited
      Partnership Agreement and Leasing Agent Agreement. CCC and the Leasing
      Company have initiated a program to prepare their systems and applications
      for the Year 2000. Preliminary studies indicate that testing, conversion
      and upgrading of system applications is expected to cost CCC and the
      Leasing Company less than $500,000. Pursuant to the Limited Partnership
      Agreement, CCC or the Leasing Company, may not seek reimbursement of data
      processing costs associated with the Year 2000 program. The financial
      impact of making these required system changes is not expected to be
      material to the Registrant's financial position, results of operations or
      cash flows.

      Cautionary Statement

      This Quarterly Report on Form 10-Q contains statements relating to future
      results of the Registrant, including certain projections and business
      trends, that are "forward-looking statements" as defined in the Private
      Securities Litigation Reform Act of 1995. Actual results may differ
      materially from those projected as a result of certain risks and
      uncertainties, including but not limited to changes in: economic
      conditions; trade policies; demand for and market acceptance of leased
      marine cargo containers; competitive utilization and per-diem rental rate
      pressures; as well as other risks and uncertainties, including but not
      limited to those described in the above discussion of the marine container
      leasing business under Item 2., Management's Discussion and Analysis of
      Financial Condition and Results of Operations; and those detailed from
      time to time in the filings of Registrant with the Securities and Exchange
      Commission.



                                       11
<PAGE>   12

Item 3.  Quantitative and Qualitative Disclosures About Market Risk

Not applicable.



                                       12
<PAGE>   13

                           PART II - OTHER INFORMATION


Item 1.Legal Proceedings

      As reported in the Registrant's Current Report on Form 8-K and Amendment
      No. 1 to Current Report on Form 8-K, filed with the Commission on February
      7, 1997 and February 26, 1997, respectively, Arthur Andersen, London,
      England, resigned as auditors of the Cronos Group, a Luxembourg
      corporation headquartered in Orchard Lea, England (the "Parent Company"),
      on February 3, 1997.

      The Registrant retained a new auditor, Moore Stephens, P.C. on April 10,
      1997, as reported in its Current Report on Form 8-K, filed April 14, 1997.

      In connection with its resignation, Arthur Andersen also prepared a report
      pursuant to Section 10A(b)(2) of the Securities Exchange Act of 1934 as
      amended, for filing by the Parent Company with the Securities and Exchange
      Commission ("SEC") citing its inability to obtain what it considered to be
      adequate responses to its inquiries primarily regarding the payment of
      $1.5 million purportedly in respect of professional fees relating to a
      proposed strategic alliance. This sum was returned to the Parent Company
      in January 1997.

      Following the report of Arthur Andersen, the SEC, on February 10, 1997,
      commenced a private investigation of the Parent Company for the purpose of
      investigating the matters discussed in such report and related matters.
      The SEC's investigation can result in several types of civil or
      administrative sanctions against the Parent Company and individuals
      associated with the Parent Company, including the assessment of monetary
      penalties. Actions taken by the SEC do not preclude additional actions by
      any other federal, civil or criminal authorities or by other regulatory
      organizations or by third parties.

      The SEC's investigation is continuing, and some of the Parent Company's
      present and former officers and directors and others associated with the
      Parent Company have given testimony. However, no conclusion of any alleged
      wrongdoing by the Parent Company or any individual has been communicated
      to the Parent Company by the SEC.

      The Registrant does not believe that the focus of the SEC's investigation
      is upon the Registrant or CCC. CCC is unable to predict the outcome of the
      SEC's ongoing private investigation of the Parent Company.

      As reported in the Registrant's Current Report on Form 8-K, filed with the
      SEC on May 21, 1998, the Parent Company reported that its Chairman and
      CEO, Stefan M. Palatin, was suspended from his duties pending the
      investigation of fraud charges against him by Austrian government
      authorities. On June 8, 1998, the Parent Company's Board of Directors
      removed Mr. Palatin as Managing Director and Chief Executive Officer. Mr.
      Palatin resigned from the Board of Directors of the Parent Company on July
      6, 1998. Mr. Rudolf J. Weissenberger has been appointed to replace Mr.
      Palatin as an executive director and Chief Executive Officer. Also, on
      June 8, 1998, the Board approved a proposal to add two independent
      directors to the Board. The Board engaged legal counsel to provide legal
      advice and commence legal action, if appropriate, against former officers
      or directors of the Parent Company (including Mr. Palatin) if it is
      determined that they engaged in any misfeasance or improper self-dealing.

      Mr. Palatin had been a director of CCC; he resigned from his position as
      director on April 23, 1998.

      CCC further understands that Austrian authorities have initiated
      investigations of persons in addition to Mr. Palatin, including Mr.
      Weissenberger and Dr. Axel Friedberg. Dr. Friedberg has been a
      non-executive director of the Parent Company since 1997. Such
      investigations, which are still pending, have not resulted in any action
      being taken against Messrs. Weissenberger or Friedberg, and each has
      informed the Parent Company that they do not believe that there is any
      basis for any action to be taken against them.



                                       13
<PAGE>   14

Item 3. Defaults Upon Senior Securities

      See Item 5. Other Information.


Item 5. Other Information

      In 1993, the Parent Company negotiated a credit facility (hereinafter, the
      "Credit Facility") with several banks for the use of the Parent Company
      and its affiliates, including CCC. At December 31, 1996, approximately
      $73,500,000 in principal indebtedness was outstanding under the Credit
      Facility. As a party to the Credit Facility, CCC is jointly and severally
      liable for the repayment of all principal and interest owed under the
      Credit Facility. The obligations of CCC, and the five other subsidiaries
      of the Parent Company that are borrowers under the Credit Facility, are
      guaranteed by the Parent Company.

      Following negotiations in 1997 with the banks providing the Credit
      Facility, an Amended and Restated Credit Agreement was executed in June
      1997, subject to various actions being taken by the Parent Company and its
      subsidiaries, primarily relating to the provision of additional
      collateral. This Agreement was further amended in July 1997 and the
      provisions of the Agreement and its Amendment converted the facility to a
      term loan, payable in installments, with a final maturity date of May 31,
      1998. The terms of the Agreement and its Amendment also provided for
      additional security over shares in the subsidiary of the Parent Company
      that owns the head office of the Parent Company's container leasing
      operations. They also provided for the loans to the former Chairman of
      $5,900,000 and $3,700,000 to be restructured as obligations of the former
      Chairman to another subsidiary of the Parent Company (not CCC), together
      with the pledge to this subsidiary company of 2,030,303 Common Shares
      beneficially owned by him in the Parent Company as security for these
      loans. They further provided for the assignment of these loans to the
      lending banks, together with the pledge of 1,000,000 shares and the
      assignment of the rights of the Parent Company in respect of the other
      1,030,303 shares. Additionally, CCC granted the lending banks a security
      interest in the fees to which it is entitled for the services it renders
      to the container leasing partnerships of which it acts as general partner,
      including its fee income payable by the Registrant. The Parent Company did
      not repay the Credit Facility at the amended maturity date of May 31,
      1998.

      On June 30, 1998, the Parent Company entered into a third amendment (the
      "Third Amendment") to the Credit Facility. The Third Amendment became
      effective as of that date, subject to the satisfaction thereafter of
      various conditions, including: the Parent Company must deliver its audited
      financial statements for 1997 by a specified date and; on or prior to July
      30, 1998, the Parent Company must furnish proof that any defaults under
      any other indebtedness have been waived and must also furnish various
      legal opinions, officers' certificates and other loan documentation. Under
      the Third Amendment, the remaining principal amount of $36,800,000 will be
      amortized in varying monthly amounts commencing on July 31, 1998 with
      $26,950,000 due on September 30 and a final maturity date of January 8,
      1999. All of these conditions will be fulfilled by August 14, 1998.

      The directors of the Parent Company are pursuing alternative sources of
      financing to meet the amended repayment obligations under the Third
      Amendment. Failure to meet revised lending terms would constitute an event
      of default with the lenders. The declaration of an event of default would
      result in further defaults with other lenders under loan agreement
      cross-default provisions. Should a default of the term loans be enforced,
      the Parent Company and CCC may be unable to continue as going concerns.

      CCC is currently in discussions with the management of the Parent Company
      to provide assurance that the management of the container leasing
      partnerships managed by CCC, including the Registrant, is not disrupted
      pending a refinancing or reorganization of the indebtedness of the Parent
      Company and its affiliates.



                                       14
<PAGE>   15

      The Registrant is not a borrower under the Credit Facility, and neither
      the containers nor the other assets of the Registrant have been pledged as
      collateral under the Credit Facility.

      CCC is unable to determine the impact, if any, these concerns may have on
      the future operating results and financial condition of the Registrant or
      CCC and the Leasing Company's ability to manage the Registrant's fleet in
      subsequent periods.



                                       15
<PAGE>   16

Item 6.   Exhibits and Reports on Form 8-K

(a)   Exhibits

<TABLE>
<CAPTION>
  Exhibit
    No.                           Description                                   Method of Filing
  --------   --------------------------------------------------------       ------------------------- 
  <S>        <C>                                                            <C>
    3(a)     Limited Partnership Agreement of the Registrant, amended       *
             and restated as of December 28, 1995

    3(b)     Certificate of Limited Partnership of the Registrant           **

    10       Form of Leasing Agent Agreement with Cronos Containers         ***
             Limited

    27       Financial Data Schedule                                        Filed with this document
</TABLE>


(b)   Reports on Form 8-K

      On May 21, 1998, the Registrant filed a Report on Form 8-K reporting
      changes on the board of directors of the Parent Company.



----------------

*     Incorporated by reference to Exhibit "A" to the Prospectus of the
      Registrant dated December 28, 1995, included as part of Registration
      Statement on Form S-1 (No. 33-98290)

**    Incorporated by reference to Exhibit 3.2 to the Registration Statement on
      Form S-1 (No. 33-98290)

***   Incorporated by reference to Exhibit 10.2 to the Registration Statement on
      Form S-1 (No. 33-98290)



                                       16
<PAGE>   17

                                   SIGNATURES



      Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.




                                            CRONOS GLOBAL INCOME FUND XVI, L.P.


                                            By     Cronos Capital Corp.
                                                   The General Partner




                                            By     /s/ Dennis J. Tietz
                                               ---------------------------------
                                                   Dennis J. Tietz
                                                   President and Director of 
                                                   Cronos Capital Corp. ("CCC")
                                                   Principal Executive Officer 
                                                   of CCC




Date: August 14, 1998



                                       17
<PAGE>   18

                                  EXHIBIT INDEX



<TABLE>
<CAPTION>
  Exhibit
    No.                           Description                                   Method of Filing
  --------   --------------------------------------------------------       ------------------------- 
  <S>        <C>                                                            <C>
    3(a)     Limited Partnership Agreement of the Registrant, amended       *
             and restated as of December 28, 1995

    3(b)     Certificate of Limited Partnership of the Registrant           **

    10       Form of Leasing Agent Agreement with Cronos Containers         ***
             Limited

    27       Financial Data Schedule                                        Filed with this document
</TABLE>



----------------

*     Incorporated by reference to Exhibit "A" to the Prospectus of the
      Registrant dated December 28, 1995, included as part of Registration
      Statement on Form S-1 (No. 33-98290)

**    Incorporated by reference to Exhibit 3.2 to the Registration Statement on
      Form S-1 (No. 33-98290)

***   Incorporated by reference to Exhibit 10.2 to the Registration Statement on
      Form S-1 (No. 33-98290)