16






                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                   FORM 10-QSB

(Mark One)
[ X ] Annual Report Under Section 13 or 15(d) of the Securities Exchange Act of
1934 For the quarterly period ended March 31, 2002

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

Commission File Number:  333-22239


                              AeroCentury IV, Inc.
                 (Name of small business issuer in its charter)

           California                                  94-3260392
  (State or other jurisdiction            (I.R.S. Employer Identification No.)
of incorporation or organization)

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

Issuer's telephone number, including area code:                 (650) 340-1880
Securities registered pursuant to Section 12(b) of the Act:          None

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

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


On May 14, 2002 the aggregate market value of the voting and non-voting Common
equity held by non-affiliates (computed by reference to the price at which the
common equity was sold) was $0.


As of May 14, 2002 the Issuer has 243,420 Shares of Common Stock outstanding.


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



<PAGE>



                              AEROCENTURY IV, INC.
                                  Balance Sheet
                                 March 31, 2002
                                    Unaudited
<TABLE>
<CAPTION>

                                     ASSETS
<S>                                                                        <C>

Current assets:
     Cash                                                                  $     184,860
     Deposits                                                                    113,470
     Accounts receivable                                                         124,210
                                                                           -------------
Total current assets                                                             422,540

Aircraft and aircraft engines under operating leases,
     net of accumulated depreciation of $464,460                               1,174,740
Debt issue costs, net of accumulated
     amortization of $353,390                                                    236,130
Prepaid expenses                                                                  36,500
                                                                           -------------

Total assets                                                               $   1,869,910
                                                                           =============


                      LIABILITIES AND SHAREHOLDER'S DEFICIT

Current liabilities:
     Accounts payable                                                      $       2,150
     Interest payable                                                            191,210
     Prepaid rent                                                                 12,500
     Security deposits                                                            20,000
     Maintenance deposits                                                        217,680
                                                                           -------------
Total current liabilities                                                        443,540
                                                                           -------------

Medium-term secured notes                                                      3,869,000
                                                                           -------------

Total liabilities                                                              4,312,540
                                                                           -------------

Preferred stock, no par value, 100,000 shares authorized,
     no shares issued and outstanding                                                  -
Common stock, no par value, 500,000 shares authorized,
     243,420 shares issued and outstanding                                       243,420
Accumulated deficit                                                           (2,686,050)
                                                                           -------------
Total shareholder's deficit                                                   (2,442,630)
                                                                           -------------

Total liabilities and shareholder's deficit                                $   1,869,910
                                                                           =============

</TABLE>

The accompanying notes are an integral part of these statements.




<PAGE>



                              AEROCENTURY IV, INC.
                            Statements of Operations
<TABLE>
<CAPTION>


                                                                                      For the Three Months
                                                                                         Ended March 31,
                                                                                     2002             2001
                                                                                     ----             ----
<S>                                                                             <C>              <C>

                                                                                           Unaudited
Revenues:

     Rent income                                                                $      75,000    $      75,000
     Gain on sale of aircraft                                                               -           35,980
     Interest income                                                                    2,950           17,890
                                                                                -------------    -------------

                                                                                       77,950          128,870
                                                                                -------------    -------------

Expenses:

     Depreciation                                                                      29,050           29,050
     Amortization                                                                      19,150           19,150
     Interest                                                                         110,060          121,730
     Management fees                                                                        -           24,340
     Professional fees and general and administrative                                  34,720            4,950
                                                                                -------------    -------------

                                                                                      192,980          199,220
                                                                                -------------    -------------

Loss before taxes                                                                    (115,030)         (70,350)

Tax provision                                                                             800                -
                                                                                -------------    -------------

Net loss                                                                        $    (115,830)   $     (70,350)
                                                                                =============    =============

Weighted average common shares outstanding                                            243,420          243,420
                                                                                =============    =============

Basic loss per common share                                                     $       (0.48)   $       (0.29)
                                                                                =============    =============
</TABLE>


The accompanying notes are an integral part of these statements.




<PAGE>



                              AEROCENTURY IV, INC.
                            Statements of Cash Flows

<TABLE>
<CAPTION>

                                                                  For the Three Months Ended March 31,
                                                                       2002                  2001
                                                                       ----                  ----
<S>                                                               <C>                   <C>
                                                                                Unaudited

Net cash used by operating activities                             $       70,440        $     (82,460)
                                                                  --------------        -------------

Investing activity -
     Proceeds from disposal of assets                                          -              205,980
                                                                  --------------        -------------
Net cash provided by investing activities                                      -              205,980
                                                                  --------------        -------------

Financing activity -
     Repayment on medium-term secured notes                           (1,000,000)                   -
                                                                  --------------        -------------
Net cash used by financing activities                                 (1,000,000)                   -
                                                                  --------------        -------------

Net (decrease)/increase in cash                                         (929,560)             123,520

Cash, beginning of period                                              1,114,420            1,193,140
                                                                  --------------        -------------

Cash, end of period                                               $      184,860        $   1,316,660
                                                                  ==============        =============

Supplemental disclosures of cash flow information: Cash paid during the period
for:
                                                                            2002                 2001
                                                                            ----                 ----
     Interest (net of amount capitalized)                         $            -        $     121,730
     Income taxes                                                              -                    -

</TABLE>

The accompanying notes are an integral part of these statements.


<PAGE>




                              AEROCENTURY IV, INC.
                          Notes to Financial Statements

1.       Summary of Significant Accounting Policies

         Basis of Presentation

         AeroCentury IV, Inc. (the "Company") was incorporated in the state of
California on February 7, 1997 ("Inception"). The Company was formed solely for
the purpose of acquiring Income Producing Assets. The Company offered up to
$10,000,000 in $1,000 Secured Promissory Notes maturing on April 30, 2005 (the
"Notes") pursuant to a prospectus dated May 21, 1997 (the "Prospectus").

         All of the Company's outstanding common stock is owned by JetFleet
Holding Corp. ("JHC"), a California corporation formed in January 1994. In May
1998, JetFleet Management Corp., the sole shareholder of the Company was renamed
JetFleet Holding Corp. The rights and obligations under the management agreement
between the Company and JHC were assigned by JHC to a newly-created wholly-owned
subsidiary named "JetFleet Management Corp." ("JMC"). JMC also manages
AeroCentury Corp. ("ACY"), a Delaware corporation, and JetFleet III, a
California corporation, which are affiliates of JHC and which have objectives
similar to the Company's. Neal D. Crispin, the President of the Company, holds
the same position with JHC and JMC and owns a significant amount of the common
stock of JHC.

         Cash and Cash Equivalents/Deposits

         The Company considers highly liquid investments readily convertible
into known amounts of cash, with original maturities of 90 days or less, as cash
equivalents. Deposits represent cash balances held related to maintenance
reserves and security deposits and are subject to withdrawal restrictions. As of
March 31, 2002, the Company maintained $210,380 of its cash balances in a money
market fund held by a regional brokerage firm, which is not federally insured.

         Aircraft and Aircraft Engines Under Operating Leases

         The Company's interests in aircraft are recorded at the lower of cost
or market value, which includes acquisition costs (see Note 2). Depreciation is
computed using the straight-line method over each aircraft's estimated economic
life to its estimated residual value.

         Impairment of Long-lived Assets

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

         Debt Issue Costs

         Pursuant to the terms of the Prospectus, the Company paid an
Organization and Offering Expense Reimbursement to JHC in cash in an amount up
to 2.0% of Aggregate Gross Offering Proceeds for reimbursement of certain costs
incurred in connection with the organization of the Company and the Offering
(the "Reimbursement").




<PAGE>




                              AEROCENTURY IV, INC.
                          Notes to Financial Statements

1.       Summary of Significant Accounting Policies (continued)

         Debt Issue Costs (continued)

         To the extent that JHC incurred expenses in excess of the 2.0% cash
limit, such excess expenses were repaid to JHC in the form of Common Stock
issued by the Company at a price of $1.00 per share (the "Excess Stock"). The
amount of Excess Stock that the Company can issue was limited according to the
amount of Aggregate Gross Offering Proceeds raised by the Company. The Company
capitalized the Reimbursement paid and amortizes such costs over the life of the
Notes (approximately eight years).

         Assets Subject to Lien

         The Company's obligations under the Notes are secured by a security
interest in all of the Company's right, title and interest in the Income
Producing Assets acquired by the Company.

         Income Taxes

         The Company follows the liability method of accounting for income taxes
as required by the provisions of Statement of Financial Accounting Standards No.
109 - Accounting for Income Taxes.

         Use of Estimates

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

         The most significant estimates with regards to these financial
statements are the residual values of the aircraft, the useful lives of the
aircraft, and the estimated amount and timing of cash flow associated with each
aircraft that are used to evaluate impairment, if any.

         Recent Accounting Pronouncements

     In August 2001, the Financial  Accounting  Standards  Board issued SFAS No.
144,  "Accounting  for the  Impairment or Disposal of Long-lived  Assets," which
supercedes SFAS No. 121, "Accounting for the Impairment of Long-lived Assets and
Long-lived  Assets to Be Disposed  of." SFAS No. 144 is effective  for financial
statements  issued for fiscal years  beginning  after  December  15,  2001,  and
interim  periods within those fiscal years.  The Company adopted SFAS No. 144 on
January 1, 2002. Because SFAS No. 144 retains the fundamental provisions of SFAS
No. 121 for (a)  recognition  and  measurement  of the  impairment of long-lived
assets  to be held and used  and (b)  measurement  of  long-lived  assets  to be
disposed of by sale, the adoption of SFAS No. 144 has not had a material  effect
on the Company's results of operations or financial position.




<PAGE>



                              AEROCENTURY IV, INC.
                          Notes to Financial Statements

2.       Aircraft and Aircraft Engines Under Operating Leases

         Aircraft and Aircraft Engines

         At March 31, 2002, the Company owned a Fairchild Metro III aircraft,
serial number AC-647 ("S/N AC-647"), and a Pratt & Whitney JT8D-9A aircraft
engine, serial number 674452B (the "Engine"). The Company did not purchase or
sell any aircraft during the first three months of 2002.

         Aircraft and Aircraft Engines Leases

         When S/N AC-647 was acquired, it was subject to a 36-month lease,
expiring in April 2001, with a regional carrier in Uruguay. During June 1999,
however, management repossessed the aircraft due to non-payment of rent. In June
2000, S/N AC-647 was re-leased to a U.S. carrier for a two-year term, expiring
in June 2002.

         The Engine is used on a McDonnell Douglas DC-9 aircraft and is subject
to a 60-month lease with the seller, expiring in November 2002. The Engine is
subleased by the seller to a Mexican-based regional carrier.

         As of March 31, 2002, minimum future lease rent payments receivable
under noncancelable leases were as follows:

                  Year                    Amount
                  ----                    ------
                  2002              $     125,000

3.       Medium-Term Secured Notes

         As mentioned above, the Company raised funds through the Offering from
May 1997 to August 1997. During 1997, the Company accepted subscriptions for
4,869 Notes aggregating $4,869,000 in Gross Offering Proceeds. Pursuant to the
Prospectus, the Company subsequently issued $4,869,000 in Notes due April 30,
2005. As discussed in Note 6, the Company prepaid $1,000,000 of principal to
the Noteholders during the first quarter of 2002.  The Notes bear interest at
an annual rate of 10.00%, which is due and payable on a quarterly basis, in
arrears, on the first business day of February, May, August and November.

         The Company did not have sufficient cash from rent income to fund the
required interest payment of approximately $122,000 on February 1, 2002. The
Company was, therefore, in default under the Trust Indenture. The Company had 90
days to cure such default, but, as discussed in Notes 6 and 7, it did not have
sufficient cash from rent revenue to do so. Under the provisions of the Trust
Indenture, the Company and the Trustee have agreed to execute a transfer of
collateral in lieu of foreclosure, and are in the process of negotiating a
Transfer Agreement and Bill of Sale regarding transfer.

         As described in Note 6 to the financial statements, there is
substantial doubt as to the Company's ability to continue as a going concern.
Therefore, the fair value of the Notes is estimated to be approximately
$1,154,000, which is $2,715,000 less than the carrying value at March 31, 2002.
The fair value of the notes payable is estimated based upon the net book values
of the aircraft and the current net working capital of the Company.



<PAGE>



                              AEROCENTURY IV, INC.
                          Notes to Financial Statements

4.       Income Taxes

         The items comprising income tax expense are as follows:
<TABLE>
<S>                                                                                 <C>              <C>

                                                                                           2002             2001
                                                                                           ----             ----
         Current tax provision
              Federal                                                               $           -    $            -
              State                                                                           800               800
                                                                                    -------------    --------------
              Current tax provision                                                           800               800
                                                                                    -------------    --------------

         Deferred tax provision
              Federal                                                                     (41,380)          (15,910)
              State                                                                           380              (570)
                                                                                    -------------    --------------
              Deferred benefit                                                            (41,000)          (16,480)
              Change in valuation allowance                                                41,000            16,480
                                                                                    -------------    --------------
         Total provision for income taxes                                           $         800    $          800
                                                                                    =============    ==============

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

                                                                                           2002             2001
                                                                                           ----             ----

         Income tax benefit at statutory federal income tax rate                    $     (39,110)    $     (15,640)
         State taxes net of federal benefit                                                   (60)              (40)
         Other                                                                             (1,030)                -
         Change in valuation allowance                                                     41,000            16,480
                                                                                    -------------    --------------
         Total provision for income taxes                                           $         800    $          800
                                                                                    =============    ==============
</TABLE>




<PAGE>



                              AEROCENTURY IV, INC.
                          Notes to Financial Statements

4.       Income Taxes (continued)

         Temporary differences and carryforwards, which gave rise to a
significant portion of deferred tax assets and liabilities as of March 31, 2002
are as follows:
<TABLE>
<S>                                                                                 <C>

         Deferred tax assets:
              Depreciation of aircraft                                              $      37,770
              Maintenance deposits                                                         33,260
              Net operating losses                                                        375,940
              Other                                                                         4,530
                                                                                    -------------
                                                                                          451,500
                  Valuation allowance                                                    (451,390)
                                                                                    -------------
                  Net deferred tax assets                                                     110
         Deferred tax liability-
              Amortization of organizational costs                                           (110)
                                                                                    -------------

                                                                                    $           -
                                                                                    =============
</TABLE>
         The Company does not anticipate generating adequate future taxable
income to realize the benefits of the remaining deferred tax assets on the
balance sheet. Therefore, the Company has recognized a valuation allowance equal
to the net deferred tax asset.

         As discussed in Note 1, the Company is a subsidiary of JHC. JHC files a
consolidated tax return that includes the Company as a member of the
consolidated group. The current and deferred taxes of the consolidated group are
allocated to members of the group in their separately issued financial
statements. Current and deferred income taxes are allocated to members of the
group by applying FAS 109 as if it were a separate taxpayer. In addition, the
members of the group record inter-company receivables and payables to reflect
the tax benefits of net operating losses used in the consolidated tax return.
However, under the terms of the tax sharing arrangement with other members of
the consolidated group, the Company does not expect its inter-company receivable
to be collected because it does not expect to generate adequate future taxable
income. The Company's current Federal net operating losses of $1,104,130 may be
carried forward for twenty years and begin to expire in 2020.

5.       Related Party Transactions

         The Company's Income Producing Asset portfolio is managed and
administered under the terms of a management agreement with JMC. Under this
agreement, on the last day of each calendar quarter, JMC receives a quarterly
management fee equal to 0.5% of the Company's Aggregate Gross Proceeds received
through the last day of such quarter. Due to the default discussed in Notes 3, 6
and 7, no management fees were accrued during the first three months of 2002. In
the first three months of 2001, the Company accrued a total of $97,380, in
management fees to JMC.

         JMC may receive an acquisition fee for locating assets for the Company
and a remarketing fee in connection with the sale of the Company's assets,
provided that such fees are not more than the customary and usual fees that
would be paid to an unaffiliated party for such a transaction. The total of the
Aggregate Purchase Price plus the acquisition fee cannot exceed the fair market
value of the asset based on appraisal. JMC may also receive reimbursement of
Chargeable Acquisition Expenses incurred in connection with a transaction which
are payable to third parties. During the first three months of 2002 and 2001, no
acquisition fees or reimbursements for Chargeable Acquisition Expenses were paid
as the Company did not acquire additional assets. No remarketing fees were paid
to JMC during the first three months of 2002. During the first three months of
2001, remarketing fees of $2,550 were paid to JMC in connection with the sale of
aircraft.


<PAGE>



                              AEROCENTURY IV, INC.
                          Notes to Financial Statements

5.       Related Party Transactions (continued)

         As discussed in Note 1, the Company reimbursed JHC for certain costs
incurred in connection with the organization of the Company and the Offering.
The Company made no such payments during 2001 and 2000.

6.       Going Concern

         As indicated in the accompanying financial statements, as of March 31,
2002, the Company's total liabilities exceeded its total assets by $2,442,630.

         The Company sold several of its aircraft, which were returned from
defaulted lessees, during 2000 and 2001. Such sales were earlier than
anticipated, but were determined by the Company to be more beneficial to the
Noteholders than incurring the necessary maintenance expense to re-lease the
aircraft to new lessees. As a result, the proceeds received from the sales were
less than was expected had the aircraft not been sold "as-is", and the proceeds
were insufficient to purchase additional Income Producing Assets. Since the
Trust Indenture precludes the Company from using sales proceeds to fund interest
payments, after consultation with, and with the consent of, the Trustee, on
December 15, 2001, the Company's Board of Directors approved a resolution
authorizing a prepayment of $1,000,000 of principal to the Noteholders during
the first quarter of 2002. The Company made such prepayment during February
2002.

         The Company did not have sufficient cash from rent income to fund the
required interest payment of approximately $122,000 on February 1, 2002. The
Company was, therefore, in default under the Trust Indenture. The Company had 90
days to cure such default, but it did not have sufficient cash from rent income
to do so. Therefore, in May 2002, the Trustee declared an "Event of Default"
under the Trust Indenture. Under the provisions of the Trust Indenture, the
Company and the Trustee have agreed to execute a transfer of collateral in lieu
of foreclosure, and are in the process of negotiating a Transfer Agreement and
Bill of Sale regarding transfer. Management of the Company's assets and
extinguishment of the Company's liabilities are now the responsibility of the
Trustee.

         During 2001, the Company paid $100,000 to the Trustee, which amount is
estimated to be the expenses incurred by the Trustee and its counsel in
connection with the prepayment and the default. Based on reports from the
Trustee, during 2001 and the first three months of 2002, the Company expensed
$40,000 and $30,000, respectively, of the $100,000; the balance is included in
prepaid expenses and will continue to be expensed as incurred during 2002.

         These factors create a substantial uncertainty about the Company's
ability to continue as a going concern. The financial statements do not include
any adjustments that might be necessary if the Company is unable to continue as
a going concern. Since the Company has not yet elected liquidation, and there
has not yet been a change in management, liquidation accounting has not been
applied to these financial statements.

7.       Subsequent Events

         As discussed in Note 6, the Trustee declared an Event of Default under
the Trust Indenture during May 2002. The Company and the Trustee have agreed to
execute a transfer of collateral in lieu of foreclosure, and are in the process
of negotiating a Transfer Agreement and Bill of Sale regarding such transfer.
Title to the Company's assets will be transferred to the Trustee, and all of the
Company's obligations with respect to such assets and the lessees of the assets
will be the responsibility of the Trustee.


<PAGE>



Item 6.    Management's Discussion and Analysis or Plan of Operation.

Forward-Looking Statements

Certain statements  contained in this report and, in particular,  the discussion
regarding: the Company's beliefs, plans, objectives, expectations and intentions
regarding:  collection of  intercompany  tax  receivables  under its tax sharing
agreement,  and the incurring of  significant  operating  expenses for remaining
assets on lease are forward looking statements. While the company believes that
such statements are accurate,  actual results may differ due to further defaults
by existing lessees,  changing general economic  conditions,  particularly those
that affect the re-sale  value of  turboprop  aircraft  and  engines,  including
competition for turboprop and other aircraft, and future trends and results that
cannot be predicted with  certainty.  The Company's  actual results could differ
materially from those discussed in such forward looking statements. Factors that
could cause or contribute to such  differences  include those discussed below in
the section  entitled  "Factors that May Affect Future  Results." The cautionary
statements made in this Report should be read as being applicable to all related
forward-looking statements wherever they appear in this Report.

Critical Accounting Policies

In response to the Securities and Exchange Commission's Release No. 33-8040,
"Cautionary Advice Regarding Disclosure About Critical Accounting Policies", the
Company has identified the most critical accounting policies upon which its
financial status depends. It determined the critical principles by considering
accounting policies that involve the most complex or subjective decisions or
assessments. The Company identified its most critical accounting policies to be
those related to lease rental revenue recognition, depreciation policies and
valuation of aircraft. These accounting policies are stated in the notes to the
financial statements and relevant sections in this discussion and analysis.

Results of Operations

The Company recorded a net loss of ($115,830) or ($0.48) per share and ($70,350)
or ($0.29) per share for the three months ended March 31, 2002 and 2001,
respectively.

Rental income was the same in the first three months of 2002 and 2001. Gain on
sale of aircraft was approximately $36,000 lower in 2002 because there were no
asset sales during the period, versus one such sale during the first three
months of 2001. Interest income was lower in 2002 by approximately $15,000 due
to lower cash balances and lower interest rates.

The  Company's  asset which was sold during  January  2001 had  previously  been
written  down to its net sales  price  with no  subsequent  depreciation  taken.
Therefore,  total  depreciation  expense  was the same in both  2002  and  2001.
Amortization expense was also the same in both years. Interest expense decreased
approximately  $12,000  in  2002  due to the  principal  repayment  made  on the
Company's secured notes during February 2002. Management fees were approximately
$24,000 lower in 2002 because JMC has stopped  charging a management  fee to the
Company as a result of an Event of Default under the Trust Indenture,  which has
resulted in the Trustee taking control of management of the assets. Professional
fees and general and administrative  expenses were approximately  $30,000 higher
in 2002 as a result of trustee and its counsel's expenses incurred in connection
with the Event of Default.

Under the terms of a tax sharing arrangement between the members of the
consolidated group with which the Company files a consolidated tax return, in
the event that the Company has taxable income, the Company will be credited for
the tax benefits provided by the use of the Company's prior year net operating
losses. However, under this agreement, the Company does not expect its
inter-company receivable to be collected because it does not expect to generate
adequate future taxable income.

Capital Resources and Liquidity

The Company's current financial condition is a result of several factors,
primarily the default on lease obligations by four of its original five lessees.
As a result of such defaults, the aircraft were repossessed by the Company or
returned early by the lessees, which meant that the Company had to sell the
aircraft earlier than anticipated or negotiate lease terms with new lessees. See
"Factors that May Affect Future Results," below, for a complete discussion of
factors affecting the Company's cash flow.

Since its formation, the Company's capital has come in the form of equity
contributions from JHC, proceeds from the Offering, rental revenue from the
Income Producing Assets purchased using those proceeds, and, most recently,
proceeds from the sale of assets. The Company's liquidity has varied, increasing
to the extent cash flows from operations exceeded expenses, and decreasing as
interest payments were made to the Noteholders and to the extent expenses
exceeded cash flows from leases.

At March 31, 2002, the Company had cash balances of $184,860, consisting of rent
and sales proceeds of $106,960 and $77,900, respectively, and deposits of
$113,470. At March 31, 2002, the Company had Notes outstanding with an aggregate
principal face value of $3,869,000. The fair value of the Notes, based upon the
net book values of the aircraft and the net working capital of the Company as of
that date, is estimated to be approximately $1,154,000, which is approximately
30% of the outstanding principal of the Notes.

Since the Company has acquired  Income  Producing  Assets,  which are subject to
triple net leases (the lessee pays operating and maintenance expenses, insurance
and  taxes),  the  Company  typically  has not  incurred  significant  operating
expenses in connection with ownership of its Income  Producing Assets as long as
they  remained  on  lease.  The  Company  has,  however,   incurred  significant
maintenance  expense  for  aircraft  which  have been off  lease  prior to being
re-leased  or sold.  The Trustee  could incur  additional  expenses  for its two
remaining  assets if they are returned by the lessees when the leases  expire in
June and November 2002 and remain off lease.

The Company sold several of its aircraft, which were returned from defaulted
lessees, during 2000 and 2001. Such sales were earlier than anticipated, but
were determined by the Company to be more beneficial to the Noteholders than
incurring the necessary maintenance expense to re-lease the aircraft to new
lessees. The proceeds received from the sales, however, were less than was
expected and insufficient to purchase additional Income Producing Assets. Since
the Trust Indenture precludes the Company from using sales proceeds to fund
interest payments, after consultation with, and with the consent of, the
Trustee, on December 15, 2001, the Company's Board of Directors approved a
resolution authorizing a prepayment of $1,000,000 of principal to the
Noteholders during the first quarter of 2002. The Company made such prepayment
during February 2002. After the principal prepayment made during February 2002,
the Company has Notes outstanding with an aggregate principal face value of
$3,869,000. Including the February 2002 principal prepayment and all interest
paid to date, the Company has paid to Noteholders an aggregate of approximately
63% of the face value of the Notes.

The Company did not have sufficient cash from rent income to fund the required
interest payment of approximately $122,000 on February 1, 2002. The Company was,
therefore, in default under the Trust Indenture. The Company had 90 days to cure
such default, but it did not have sufficient cash from rent income to do so.
Therefore, in May 2002, the Trustee declared an "Event of Default" under the
Trust Indenture. Under the provisions of the Trust Indenture, the Company and
the Trustee have agreed to execute a transfer of collateral in lieu of
foreclosure, and are in the process of negotiating a Transfer Agreement and Bill
of Sale regarding transfer. Management of the Company's assets and
extinguishment of the Company's liabilities are now the responsibility of the
Trustee.

The Company's increase in cash flow from operations was due primarily to the
effect of the change in prepaid expenses, payable to affiliates, interest
payable and maintenance deposits, which effects were only partially offset by a
larger net loss and the effect of the change in cash classified as deposits from
year to year.

Specifically, the Company's cash flow from operations for the three months ended
March 31, 2002 consisted of a net loss of ($115,830) and adjustments consisting
primarily of depreciation and amortization of $29,050 and $19,150, respectively,
increases in cash classified as deposits, interest payable and maintenance
deposits of $17,690, $110,060 and $13,380, respectively, and decreases in
prepaid expenses and accounts payable of $29,750 and $11,730, respectively.

Specifically, the Company's cash flow from operations for the three months ended
March 31, 2001 consisted of a net loss of ($70,350) and adjustments consisting
primarily of depreciation and amortization of $29,050 and $19,150, respectively,
and decreases in cash classified as deposits, payable to affiliate and
maintenance deposits of $23,240, $36,420 and $27,770, respectively.

The decrease in cash flow provided by investing activities was because the
Company did not sell any aircraft during the first three months of 2002, versus
one such sale during the same period in 2001. There was no cash flow from
financing activities in 2002 or 2001 because the Offering terminated in August
1997.

During 2001, the Company paid $100,000 to the Trustee, which amount is estimated
to be the expenses incurred by the Trustee and its counsel in connection with
the prepayment and the default. Based on reports from the Trustee, during 2001
and the first three months of 2002, the Company expensed $40,000 and $30,000,
respectively, of the $100,000; the balance is included in prepaid expenses and
will continue to be expensed as incurred during 2002.

Outlook

As  discussed  above,  in May 2002,  the Trustee  declared an "Event of Default"
under  the  Trust  Indenture.  The  Company's  cash  balances  and  title to the
Company's  aircraft  are bing  transferred  to the  Trustee,  all of  which  are
collateral  for the notes  obligation.  Management of the  Company's  assets and
extinguishment  of the Company's  liabilities will be the  responsibility of the
Trustee,  and  the  Trustee  will  have  discretion  as to  the  timing  of  the
disposition of each asset.  The Trustee could choose to sell an asset to a third
party and immediately  distribute the proceeds of such sale to the  Noteholders.
In order to achieve an immediate  liquidation of the asset, however, the Company
may have to accept a price that is substantially less than the net book value of
the asset or lower than it would receive in a normal market sale. Alternatively,
the  Trustee  could  decide  to  continue  to hold an asset for the  benefit  of
Noteholders  and  collect  rent for such asset until the  underlying  user lease
expires,  or until  the  Trustee  determines  that the  asset  can be sold at an
acceptable price.

The Company's two assets are each currently on lease until June 2002 and
November 2002, at a monthly lease rate of $10,000 and $15,000, respectively. If
the Trustee were to retain both assets until lease end, a total of approximately
$125,000 could be collected under the leases; however, the amount of rental
income received would nonetheless be insufficient to permit the Trustee to make
net cash distributions to Noteholders at a rate of 10% per annum (the stated
interest rate under the Notes) on unpaid Note principal.

Any distributions to Noteholders of sales and/or rent proceeds would be net of
legal and administrative expenses incurred by the Trustee. The Trustee has
incurred $70,000 in total thus far. Under the terms of the Trust Indenture, any
final distribution to Noteholders upon sale of the last asset would consist
first of accrued, but unpaid, interest on the Notes, and then principal.

Factors that May Affect Future Results

Anticipated Event of Default; Ability to Maximize Returns. As discussed above,
due to cash flow problems created by lessee rental defaults, early termination
of leases, and lower than expected remarketing proceeds described above, the
Company was unable to make its February 1, 2002 interest payment and, on May 2,
2002, the Trustee, Wells Fargo Bank Northwest, National Association, declared an
Event of Default under the Trust Indenture. The Trustee and the Company have
agreed that the Company will transfer all of its assets to the Trustee for the
benefit of the Noteholders in lieu of a foreclosure proceeding. The Company's
assets securing the Indenture consist of the aircraft portfolio and leases and
all remaining cash held by the Company. Once the transfer is executed, the
Trustee will have the power to direct the disposition of the collateral with the
goal of maximizing value to the Noteholders. This could entail an immediate or
staged disposition of all the assets or retention of the assets on lease for the
benefit of the Noteholders, or a combination thereof. While the Trustee is
unlikely to realize sufficient proceeds to enable repayment of the entire Note
Indebtedness, its ability to maximize repayment to Noteholders will depend on
the risk factors described below, particularly those that affect asset values of
the Company's portfolio.

Re-lease of Assets or Sale. The ability to maximize return to the Noteholders on
the remaining assets of the Company will depend upon general economic conditions
and the speed of recovery of the air transport industry. The industry is
currently experiencing a cyclical downturn which has been exacerbated greatly by
the terrorist attacks of September 11, 2001 and their aftermath. As a result,
there has been a severe reduction in air travel and less revenue and less demand
for aircraft capacity by the major air carriers, particularly those that serve
U.S. markets.

One of the Company's assets is a regional aircraft leased to a U.S. regional
freight carrier. The second is a jet engine leased to a Mexican regional air
carrier. It is not clear whether and to what extent the current downturn will
have on these lessees. If the Company's lessees experience a corresponding
downturn in their own businesses, they may be at risk of failure, and default
under their respective leases. See "Risks Related to Regional Air Carriers",
below.

Even if the Company's lessees remain in compliance with their lease through
expiration, the industry downturn may result in the lessees deciding not to
renew the leases for an additional term. Any attempt to lease such aircraft to a
new lessee, however, could also be impacted by the financial condition of the
air travel industry. An unimproved or worse industry financial condition would
also tend to result in lower amounts realizable on the assets if they are sold
upon return from the lessee (See "Leasing Risks" and "Ownership Risks", below).

Leasing Risks. The successful negotiation of lease extensions, re-leases and
sales for its two assets as directed by the Trustee under the going-forward
agreement may be critical to its ability to achieve a maximum return of
principal to its Noteholders, and will involve a number of risks. Demand for
lease or purchase of the assets depends on the economic condition of the airline
industry, which is in turn sensitive to general economic conditions. The ability
to remarket equipment at acceptable rates may depend on the demand and market
values at the time of remarketing. The market for used aircraft is cyclical, and
generally, but not always, reflects economic conditions and the strength of the
travel and transportation industry. As discussed above, the demand for and value
of many types of older aircraft has been depressed by current airline financial
difficulties, increased fuel costs, the number of new aircraft on order and the
number of older aircraft coming off lease. The limited portfolio of two assets
subjects the Noteholders to economic risks if those particular airframe or
engine types should decline in value.

Risks Related to Regional Air Carriers. Because the Company's leases are with
regional air carriers, it will be subject to certain risks. First, lessees in
the regional air carrier market include a number of companies that are start-up,
low capital, and low margin operations. Often, the success of such carriers is
dependent upon arrangements with major trunk carriers, which may be subject to
termination or cancellation by such major carrier. This market segment is also
characterized by low entry costs, and thus, there is strong competition in this
industry segment from start-ups as well as major airlines. Thus, leasing
transactions with these types of lessees result in a generally higher lease
rate on aircraft, but may entail higher risk of default or lessee bankruptcy.

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

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

International Risks. The Company's portfolio currently includes a lease with a
foreign air carrier. Leases with foreign lessees may present somewhat different
credit risks than those with domestic lessees.

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

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

Casualties, Insurance Coverage. An owner of transportation equipment, could be
held liable for injuries or damage to property caused by its assets. Though some
protection may be provided by the United States Aviation Act with respect to its
aircraft assets, it is not clear to what extent such statutory protection would
be available to the Equipment owner and such act may not apply to aircraft
operated in foreign countries. Though the lease for the asset may require a
lessee to insure against a risk, some risks of loss may not be insurable. An
uninsured loss with respect to the Equipment or an insured loss, for which
insurance proceeds are inadequate, would result in a possible loss of invested
capital in and any profits anticipated from such equipment, as well as a
potential claim against the owner.

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

(a)      Exhibits.

None

 (b)     Reports on Form 8-K.

The Company filed a Report on Form 8-K on May 9, 2002 disclosing the receipt of
a notice of Event of Default under the Trust Indenture for the 10% Secured
Promissory Notes from the Indenture Trustee, Wells Fargo Bank Northwest,
National Association.






<PAGE>



                                   SIGNATURES

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

                                             AEROCENTURY IV, INC.


Date:    May 14, 2002              By:    /s/ Neal D. Crispin
                                             -------------------------------
                                             Neal D. Crispin

                                      Title: President, Chief Financial Officer