SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

(Mark One)

     |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: 333-22239


                              AeroCentury IV, Inc.
             (Exact name of Registrant as specified in its charter)

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

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

                                  650-340-1880
              (Registrant's telephone number including area code)

     Not applicable  (Former name,  former  address,  and former fiscal year, if
changed since last report)

     Check whether the issuer (1) has 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 ____

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

     Check whether the registrant  has filed all documents and reports  required
to be filed by Section 12, 13 or 15(d) of the  Securities  Exchange  Act of 1934
subsequent to the  distribution of securities under a plan confirmed by a court.
Yes ____ No ____


                   (APPLICABLE ONLY TO CORPORATE REGISTRANTS)

     State the number of shares  outstanding of each of the issuer's  classes of
common stock, as of the latest practicable date.

Title                                                        Outstanding

Common Stock                                                 243,420


Transitional Small Business Disclosure Format (check one);
Yes___ No X

<PAGE>

Part I.  Financial Information
Item 1.  Financial Statements

                                                         AeroCentury IV, Inc.
                                                            Balance Sheets
<TABLE>
<CAPTION>
                                                                    June 30,                 December 31,
                                                                      1998                       1997
                                                                   (Unaudited)

                                                                ASSETS
<S>                                                             <C>                       <C>
Current assets:
         Cash                                                   $      1,129,593          $      1,944,123
         Rent receivable                                                   7,500                    32,220
         Accounts receivable                                              15,000                     4,619
                                                                ----------------          ----------------
Total current assets                                                   1,152,093                 1,980,962

Aircraft under operating lease, net of
         accumulated depreciation of $124,641
         in 1998 and $37,353 in 1997                                   2,447,270                 2,534,558

Debt issue costs, net of accumulated
         amortization of $66,214 in 1998
         and $27,923 in 1997                                             523,306                   561,597

Note receivable                                                          866,667                         -
                                                                ----------------          ----------------   
Total assets                                                    $      4,989,336          $      5,077,117
                                                                ================          ================ 

                                                 LIABILITIES AND SHAREHOLDER'S EQUITY
Current liabilities:
         Accounts payable - trade                               $          1,050          $          5,000
         Interest payable                                                 81,150                    81,150
         Prepaid rents                                                    24,165                         -
                                                                ----------------          ---------------- 
Total current liabilities                                                106,365                    86,150

Medium-term secured notes                                              4,869,000                 4,869,000
                                                                ----------------          ----------------        
Total liabilities                                                      4,975,365                 4,955,150
                                                                ----------------          ----------------
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                   243,420
Accumulated deficit                                                     (229,449)                 (121,453)
                                                                ----------------          ---------------- 
Total shareholder's equity                                                13,971                   121,967
                                                                ----------------          ----------------      
Total liabilities and shareholder's equity                      $      4,989,336          $      5,077,117
                                                                ================          ================ 
See accompanying notes.
</TABLE>

<PAGE>

                                                         AeroCentury IV, Inc.
                                                       Statements of Operations
                                                              (Unaudited)

<TABLE>
<CAPTION>
                                                         For the Period
                                         For the         From Inception               For the
                                       Six Months      (February 7, 1997)          Three Months
                                     Ended June 30,        to June 30,            Ended June 30,
                                          1998              1997                1998             1997
<S>                                   <C>              <C>               <C>                 <C>    
Revenues:

         Rent income                  $     251,655    $            -    $       141,660     $             -
         Interest income                     62,004                 -             37,049                   -
                                      -------------    --------------    ---------------     ---------------   
                                            313,659                 -            178,709                   -
                                      -------------    --------------    ---------------     ---------------

Expenses:

         Depreciation expense                87,288                 -             43,644                   -
         Amortization expense                38,291                 -             19,145                   -
         Interest expense                   243,450             1,555            121,725               1,555
         Management fees                     48,690             2,545             24,345               2,545
         General and administrative           3,936               660              3,671                 611
                                      -------------    --------------    ---------------     ---------------  
                                            421,655             4,760            212,530               4,711
                                      -------------    --------------    ---------------     ---------------  
Net loss                              $    (107,996)    $      (4,760)    $      (33,821)     $       (4,711)
                                      =============    ==============    ===============     ===============
Weighted average common
   shares outstanding                       243,420            10,000            243,420              10,000
                                      =============    ==============    ===============     ===============
Net loss per common share             $       (0.44)   $        (0.48)   $         (0.14)    $         (0.47)
                                      =============    ==============    ===============     ===============













See accompanying notes.
</TABLE>

<PAGE>



                                                         AeroCentury IV, Inc.
                                                       Statements of Cash Flows
                                                              (Unaudited)


<TABLE>
<CAPTION>
                                                                                             For the Period
                                                                                             From Inception
                                                             For the Six Months            (February 7, 1997)
                                                               Ended June 30,                  to June 30,
                                                                    1998                          1997
<S>                                                         <C>                           <C>    
Net cash provided/(used) by operating activities            $     52,137                  $             (660)

Investing activity -
     Investment in secured promissory note                      (866,667)                                  -

Financing activities:
     Proceeds from issuance of medium-term
        secured promissory notes                                       -                             509,000
     Debt issue costs                                                  -                             (50,900)
     Proceeds from issuance of common stock                            -                              10,000
                                                            ------------                  ------------------
Net cash provided by financing activities                              -                             468,100
                                                            ------------                  ------------------
Net (decrease)/increase in cash                                 (814,530)                            467,440
 
Cash, beginning of period                                      1,944,123                                   -
                                                            ------------                  ------------------     
Cash, end of period                                         $  1,129,593                  $          467,440
                                                            ============                  ==================



















See accompanying notes.
</TABLE>


<PAGE>
                                             
                              AeroCentury IV, Inc.
                          Notes to Financial Statements
                                  June 30, 1998
                                   (Unaudited)


     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").  All of the Company's  outstanding
common  stock  is owned by  JetFleet  Management  Corp.  ("JMC"),  a  California
corporation  formed in  January  1994.  JMC is the  management  company  for the
Company, and also manages AeroCentury Corp., a Delaware corporation ("ACY"), and
JetFleet III, a California corporation,  which are affiliates of the Company and
which have objectives similar to the Company's.  Neal D. Crispin,  the President
of the Company,  holds the same position with JMC and owns a significant  amount
of the common stock of JMC.

     The accompanying  balance sheets at June 30, 1998 and December 31, 1997 and
statements of  operations  and cash flows for the six months ended June 30, 1998
and the period from Inception  (February 7, 1997) to June 30, 1997 and the three
months ended June 30, 1998 and 1997 reflect all adjustments  (consisting of only
normal recurring  accruals) which are, in the opinion of the Company,  necessary
for a fair presentation of the financial  results.  The results of operations of
the six months of 1998 are not  necessarily  indicative of results of operations
for a full year. The statements  should be read in conjunction  with the Summary
of Significant Account Policies and other notes to financial statements included
in the Company's  Annual  Report on Form 10-KSB for the year ended  December 31,
1997.

     2. Organization and Capitalization

     The Company was formed solely for the purpose of acquiring Income Producing
Assets, consisting mainly of aircraft, aircraft engines, aircraft parts or other
transportation  industry  equipment  subject to operating or full payout  leases
with third parties.  The Company raised $4,869,000 in $1,000 Secured  Promissory
Notes  maturing on April 30, 2005 (the "Notes")  pursuant to a prospectus  dated
May 21, 1997 (the "Prospectus").

     Debt issue costs

     Pursuant to the terms of the  Prospectus,  the Company paid an Organization
and  Offering  Expense  Reimbursement  to JMC 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 Company
also  issued  102,620  shares  of  common  stock  to  JMC  as  reimbursement  of
organization  and  offering  costs  JMC  incurred  in  excess  of the 2.0%  cash
reimbursement (collectively, the "Reimbursement").

     The Company capitalized the Reimbursement paid by the Company and amortizes
such costs over the life of the Notes (approximately eight years).
<PAGE>


                              AeroCentury IV, Inc.
                          Notes to Financial Statements
                                  June 30, 1998
                                   (Unaudited)


     3. Aircraft and Aircraft Engines Under Operating Leases

     Aircraft and aircraft engines

     The Company owns a 100% interest in a Shorts SD3-60-100,  serial number S/N
3606 ("S/N 3606"),  a Pratt & Whitney  JT8D-9A  aircraft  engine,  serial number
674452B (the "Engine") and a 50% undivided  interest in a Shorts SD-360,  serial
number S/N 3676 ("S/N 3676")

     Aircraft and aircraft engines leases

     S/N 3606 and S/N 3676 are subject to similar 48-month leases with a British
regional airline.

     The Engine is used on a  McDonnell  Douglas  DC-9  aircraft  operated  by a
Mexican  regional  passenger  airline serving Mexico and the United States.  The
Engine is subject to a 60 month term  expiring  on  November  4, 2002,  with the
seller,  which in turn subleases the Engine to the operator.  The seller's lease
obligations  are  secured by an  assignment  of its rights  under the  sublease,
including  the  guaranty  of  sublease  obligations  by  the  operator's  parent
corporation.

     4. Medium-term secured Notes

     From May 1997 to October 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.  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 carrying amount of the notes payable approximates
fair value.

     5. Secured note receivable

     As provided in the prospectus  for the Offering,  the Company may invest in
Financial Assets,  including indebtedness secured by Equipment. On March 4, 1998
the Company loaned $866,667 to ACY in connection with ACY's purchase of a Shorts
SD-360  aircraft.  ACY issued a secured  promissory note (the "ACY Note") to the
Company in the amount of the loan,  which is secured by a  perfected  first lien
security  interest in the aircraft.  The ACY Note bears  interest at the rate of
12% per annum,  payable  monthly in arrears.  The Note is due on March 31, 1999,
but may be prepaid without penalty at any time.

     6. 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 Compan's  Aggregate Gross Proceeds received through the last day
of such  quarter.  During  the first  six  months  of 1998 and the  period  from
Inception  (February  7, 1997) to June 30,  1997,  the  Company  paid a total of
$48,690 and $2,545, respectively in management fees to JMC.

<PAGE>


                              AeroCentury IV, Inc.
                          Notes to Financial Statements
                                  June 30, 1998
                                   (Unaudited)


     6. Related Party Transactions (continued)

     JMC may  receive a  brokerage  fee for  locating  assets  for the  Company,
provided that such fee is not more than the  customary  and usual  brokerage fee
that would be paid to an unaffiliated party for such a transaction. The total of
the  Aggregate  Purchase  Price plus the  brokerage  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.  Because  the  Company  did not  purchase
aircraft during the first six months of 1998 or during the period from Inception
(February 7, 1997) to June 30, 1997, no brokerage fees or Chargeable Acquisition
Expenses were paid to JMC.

     As  discussed  in Note 1, the  Company  reimbursed  JMC for  certain  costs
incurred in connection  with the  organization  of the Company and the Offering.
Because the Offering was closed to new  subscriptions  during  October 1997, the
Company did not reimburse JMC for any organization and offering  expenses during
the first six months of 1998.  During the period  from  Inception  (February  7,
1997) to June 30, 1997, the Company paid $10,180 to JMC.

     As discussed  in Note 5, the Company  loaned funds to ACY during March 1998
in  connection  with ACY's  purchase  of an  aircraft.  The  Company  received a
promissory note, secured by the aircraft, from ACY.

     7. Subsequent event

     On July 16, 1998,  the Company  purchased a Fairchild  Metro III  aircraft,
serial number AC-647 ("S/N AC-647").  S/N AC-647 is subject to a 36-month lease,
expiring  on April 13,  2001,  with a  regional  carrier in  Uruguay.  The lease
contains a  provision  for a personal  guaranty  by a  principal  officer of the
lessee, as well as a U.S. bank letter of credit.
 

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

     Capital Resources and Liquidity
 
     On June 30, 1998, the Company had cash balances of $1,129,593  This balance
was held  primarily for the interest  payment made to the  Noteholders in August
1998, for normally  recurring  expenses and for investment in additional  Income
Producing Assets.
 
     Since  Inception,  the Company's  funds have come in the form of an initial
contribution  from JMC,  proceeds from the Offering and rental  revenue from the
Income Producing Assets purchased using those proceeds.  The Company's liquidity
will vary in the future,  increasing  to the extent  cash flows from  operations
exceed expenses, and decreasing as interest payments are made to the Noteholders
and to the extent expenses exceed cash flows from leases.
 
     The Company's  primary use of its operating cash flow is interest  payments
to its  Unitholders.  Excess cash flow,  after payment of interest and operating
expenses is held for investment in additional Income Producing Assets. 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 does not anticipate that it will incur significant operating
expenses in connection with ownership of its Income  Producing Assets as long as
they remain on lease.
 
     The Company currently has available adequate reserves to meet its immediate
cash requirements. The leases for the Company's aircraft expire at varying times
between July 2001 and November 2002.
 
     Cash  flows  from  operations  during  the  first  six  months of 1998 were
primarily  from rent  received  for the  Company's  aircraft  leases,  including
prepaid rent and rent accrued as  receivable  at December 31, 1997.  The Company
had no significant operations until the third quarter of 1997.
 
     Cash flows used in investing activities during the first six months of 1998
consisted of a loan to AeroCentury  Corp. in connection  with its purchase of an
aircraft.  The Company used no cash in investing activities during the first six
months of 1997.
 
     The decrease in cash flows from financing  activities from year to year was
a result of the termination of the Offering during October 1997.
 
     Results of Operations
 
     The Company  recorded a net loss of  ($107,995)  or ($0.44) and ($4,760) or
($0.48)  per share for the three six months  ended June 30,  1998 and the period
from Inception (February 7, 1997) to June 30, 1997, respectively, and a net loss
of  ($33,821)  or ($0.14)  per share and  ($4,711)  or ($0.47) per share for the
three  months  ended June 30,  1998 and 1997,  respectively.  The losses  were a
result of management fees and  depreciation,  amortization and interest expense,
which more than offset the rental income received for the Company's aircraft. As
discussed  above,  the Company  had no  significant  operations  until the third
quarter of 1997.
 
     Factors that May Affect Future Results
 
     Year  2000  Considerations.   The  Company's  internal  and  administrative
operations are not highly dependent on advanced  technological computer or other
electronic systems,  and,  consequently,  management believes that the Company's
exposure  to loss as a result of Year 2000 issues is not  significant.  Further,
management  believes that the electronic systems used in the equipment leased by
the  Company  to  lessees  will not be  affected  by the Year 2000  issue,  and,
therefore,  this  issue  should not  directly  affect  the  Company's  financial
performance  or the  lessees'  ability  to comply  with their  respective  lease
obligations.  Of course, to the extent that a lessee has Year 2000 problems that
significantly  adversely  affect its overall  financial  status,  such  material
problems may affect the lessee's  operations and increase the risk of default by
a lessee  under its lease with the  Company.  Furthermore,  Year 2000 issues may
have a material  impact on FAA  operations  and the  operations  of certain  air
carriers,  which in turn  would  negatively  affect  the  aircraft  industry  in
general.
 

Part II.  Other Information

Item 1. Legal Proceedings

         None.

tem 2. Changes in Securities and Use of Proceeds

     The effective date of the Form SB-2 Registration  Statement for AeroCentury
IV was May 21, 1997, and assigned  Commission File No.  333-22239.  The offering
terminated  on October 3, 1997.  Of the  $10,000,000  in 10% Secured  Promissory
Notes ($1,000 principal amount per Note)  registered,  $5,254,000 were sold. The
Dealer  Manager for the  offering  was  Crispin  Koehler  Securities.  The gross
proceeds of the offering of the Notes was $4,869,000,  representing  4,869 Notes
sold, each with a principal amount of $1,000. The amount of expenses incurred in
connection with the issuance and  distribution  consisted of sale commissions of
$389,542  and  offering  expenses of $97,380.  Of the  remaining  $4,382,100  in
proceeds, $3,482,100 was applied toward purchase of aircraft equipment, of which
$299,000 consisted of brokerage fees paid to JetFleet Management Corp., the sole
common  shareholder  of and  management  company for the Company.  The remaining
$899,879  was applied  toward  working  capital of the Company to be invested in
additional equipment.
 
 
Item 3.  Defaults Upon Senior Securities

         No disclosure required.

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

         No disclosure required.


Item 5.  Other Information

         No disclosure required.


Item 6.  Exhibits and Reports on Form 8-K

1.  Exhibit 27.  Financial Data Schedule


 
                                   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.

                                            AeroCentury IV, Inc.

August 10, 1998                       By:    /s/ Neal D. Crispin 
Date                                    ----------------------------------------
                                        Neal D. Crispin, President and Chairman
                                        of the Board of Directors of the
                                        Registrant, Chief Financial Officer