SECURITIES AND EXCHANGE COMMISSION
                         WASHINGTON, DC 20549


                             FORM 10-QSB

(Mark One)
[ X ] Quarterly Report Under Section 13 or 15(d) of the Securities  Exchange Act
of 1934 For the quarterly period ended September 30, 1999

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

Commission File Number:  33-84336-LA


                                 JetFleet III
                 (Name of small business issuer in its charter)


      California                                     94-3208983
(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 November 15,  1999 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  November  15,  1999 the Issuer has 815,200  Shares of Common  Stock and
195,465 Shares of Series A Preferred Stock outstanding.


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

<PAGE>




Part I.           Financial Information

Item 1.           Financial Statements.


                                  JETFLEET III
                                  Balance Sheet
                               September 30, 1999

<TABLE>

                                                                ASSETS
<S>                                                                                          <C>

Current assets:
     Cash                                                                                    $     641,660
     Deposits                                                                                      690,550
     Accounts receivable                                                                            69,780
     Rent receivable                                                                                61,580
                                                                                             -------------
Total current assets                                                                             1,463,570
Aircraft and aircraft engines under operating leases,
     net of accumulated depreciation of $1,618,510                                              11,577,730
Debt issue costs, net of accumulated
     amortization of $727,920                                                                      933,530
Other assets                                                                                         3,330
                                                                                             -------------

Total assets                                                                                 $  13,978,160
                                                                                             =============

                                                 LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
     Accounts payable                                                                        $       5,790
     Taxes payable                                                                                   1,950
     Interest payable                                                                              152,120
     Prepaid rents                                                                                 113,160
     Security deposits                                                                              75,800
     Maintenance deposits                                                                          710,410
                                                                                             -------------
Total current liabilities                                                                        1,059,230

Medium-term secured bonds                                                                       11,076,350
Total liabilities                                                                               12,135,580

Preferred stock, no par value,
     300,000 shares authorized, 195,465
     issued and outstanding                                                                      1,661,450
Common stock, no par value,
     1,000,000 shares authorized, 815,200
     issued and outstanding                                                                        815,200
Accumulated deficit                                                                              (634,070)
                                                                                             -------------
Total shareholders' equity                                                                       1,842,580
                                                                                             -------------

Total liabilities and shareholders' equity                                                   $  13,978,160
                                                                                             =============

</TABLE>

See accompanying notes.




<PAGE>



                                                             JETFLEET III
                                                       Statements of Operations

<TABLE>
<S>                                                 <C>                               <C>

                                                    For the Nine Months Ended         For the Three Months Ended
                                                          September 30,                    September 30,
</TABLE>
<TABLE>
<S>                                              <C>              <C>               <C>             <C>

                                                      1999               1998           1999              1998
                                                      ----               ----           ----              ----
Revenues:

     Rent income                                 $   1,503,220    $    1,707,930    $     552,230    $      569,310
     Gain on sale of aircraft                           12,900                 -                -                 -
     Interest income                                    83,670            34,370           25,370            13,690
                                                 -------------    --------------    -------------    --------------

                                                     1,599,790         1,742,300          577,600           583,000
                                                 -------------    --------------    -------------    --------------


Expenses:

     Depreciation                                      420,010           450,810          146,220           150,270
     Amortization                                      171,470           171,470           57,160            57,160
     Interest                                          684,520         1,074,960          228,170           358,320
     Professional fees and
        general and administrative                      60,610            15,420           27,640             1,050
     Management fees                                   146,600           146,600           48,860            48,860
                                                 -------------    --------------    -------------    --------------

                                                     1,483,210         1,859,260          508,050           615,660
                                                 -------------    --------------    -------------    --------------

Income/(loss) before taxes                             116,580         (116,960)           69,550          (32,660)

Provision for income taxes                               2,880                 -            1,960                 -
                                                 -------------    --------------    -------------    --------------

Net income/(loss)                                $     113,700    $    (116,960)    $      67,590    $     (32,660)
                                                 =============    ==============    =============    ==============

Weighted average common shares outstanding             815,200           815,200          815,200           815,200
                                                 =============    ==============    =============    ==============

Basic earnings/(loss) per common share           $        0.14    $       (0.14)    $        0.08    $       (0.04)
                                                 =============    ==============    =============    ==============

</TABLE>

See accompanying notes.





<PAGE>



                                  JETFLEET III
                            Statements of Cash Flows

<TABLE>

                                                                 For the Nine Months Ended September 30,

<S>                                                              <C>                    <C>

                                                                       1999                  1998

Net cash provided by operating activities                         $      726,980        $     506,740

Investing activities:
     Purchase of interests in aircraft                               (2,800,050)                    -
     Proceeds from sale of aircraft                                    1,074,970                    -
                                                                  --------------        -------------
Net cash used by investing activities                                (1,725,080)                    -
                                                                  --------------        -------------

Net (decrease)/increase in cash                                        (998,100)              506,740

Cash, beginning of period                                              1,639,760              539,630
                                                                  --------------        -------------

Cash, end of period                                               $      641,660        $   1,046,370
                                                                  ==============        =============

Supplemental  disclosures of cash flow information:  Cash paid during the period
for:
     Interest                                                     $      684,520        $   1,433,280
     Income taxes                                                            920                1,080
</TABLE>


See accompanying notes.


<PAGE>



                                  JETFLEET III
                          Notes to Financial Statements
                               September 30, 1999


1.       Basis of Presentation

         JetFleet  III  (the  "Company")  was   incorporated  in  the  state  of
California on August 23, 1994  ("Inception").  The Company was formed solely for
the purpose of acquiring  Income  Producing  Assets.  The Company  offered up to
$20,000,000 in $1,000 Series A Units (the "Offering") consisting of an $850 bond
maturing on  November 1, 2003 (the  "Bonds")  and $150 of  preferred  stock (the
"Preferred  Stock")  pursuant  to a  prospectus  dated  September  27, 1995 (the
"Prospectus").

         The accompanying  balance sheet at September 30, 1999 and statements of
operations  and cash flows for the nine months and three months ended  September
30, 1999 and 1998 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 such periods
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, 1998.

         Organization and Capitalization

         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  its  newly-created
wholly-owned  subsidiary  named "JetFleet  Management  Corp." ("JMC").  JMC also
manages AeroCentury Corp., a Delaware  corporation,  and AeroCentury IV, Inc., a
California  corporation  ("AeroCentury IV"), 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 JHC and JMC and owns a
significant amount of the common stock of JHC.

         Aircraft and Aircraft Engines Under Operating Leases

         The Company's interests in aircraft are recorded at cost, which include
acquisition costs (see Note 2). Depreciation is computed using the straight-line
method over each aircraft's  estimated  economic life  (generally  assumed to be
twelve years) to an estimated residual value.

         Organization and Offering 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").

         JHC  contributed  $450,000 of the total it  estimated  it would pay for
organization  and offering  expenses as a common stock investment in the Company
(the "Initial Contribution").  The Company issued 450,000 shares of common stock
to JHC in return for the Initial  Contribution.  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 issued
was limited  according to the amount of Aggregate Gross Offering Proceeds raised
by the Company.

         The Company  capitalized the portions of both the Reimbursement paid by
the  Company  and the  Initial  Contribution  related  to the  Bonds  (85%)  and
amortizes such costs over the life of the Bonds (approximately eight years). The
remainder of any of the Initial Contribution and Reimbursement has been deducted
from shareholders' equity.



<PAGE>


                                  JETFLEET III
                          Notes to Financial Statements
                               September 30, 1999


1.       Basis of Presentation (continued)

         Assets Subject to Lien

         The  Company's  obligations  under the Bonds 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.

         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  and
are subject to withdrawal  restrictions.  As of September 30, 1999,  the Company
maintained  $1,289,950  of its cash  balances in two money  market funds held by
regional brokerage firms, which are not federally insured.

         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.

2.       Aircraft and Aircraft Engines Under Operating Leases

         Aircraft and Aircraft Engines

         At September  30, 1999,  the  Company's  aircraft  assets  consist of a
deHavilland  DHC-8-100,  serial number 13 ("S/N 13"), a Pratt & Whitney  JT8D-9A
aircraft  engine,  serial  number  674267  ("S/N  674267"),   three  deHavilland
DHC-6-300  aircraft  ("S/Ns 646, 751 and 696"), a Fairchild Metro III SA-227-AC,
Serial No. AC-621 ("S/N AC-621"), a Shorts SD3-60,  serial number S/N 3656 ("S/N
3656"),  a 50%  undivided  interest in a Shorts  SD3-60,  serial number S/N 3676
("S/N  3676"),  a 33% interest in a deHavilland  DHC-6,  serial number 668 ("S/N
668") and a Saab 340A, serial number 24 ("S/N 24").

         During July 1999,  the Company  purchased  the 33% interest in S/N 668.
The remaining  interest is owned by  AeroCentury  IV.  During  August 1999,  the
Company purchased S/N 24. The interests in the two aircraft were purchased for a
total of approximately  $2,800,000,  including  acquisition costs.  During March
1999, the Company sold its Shorts SD3-60, serial number 3611 ("S/N 3611").
The Company  recognized a gain of  approximately  $12,900 in connection with the
sale.

         Aircraft and Aircraft Engines Leases

         S/N 13 was  re-leased on June 15, 1999 to the previous  sub-lessee,  an
Australian carrier, for a one-year term.

         S/N  674267 is used on a  McDonnell  Douglas  DC-9 and is  subject to a
60-month  sublease,  expiring  on  November  1, 2001,  between  the seller and a
Mexican based regional carrier.

         S/Ns 646, 751 and 696 are subject to similar 36-month  leases,
expiring on July 1, 2001, with a U.S. regional carrier.

         As discussed in Note 6, S/N AC-621 was returned by the original  lessee
during October 1999 and has been re-leased.



                                  JETFLEET III
                          Notes to Financial Statements
                               September 30, 1999

2.       Aircraft and Aircraft Engines Under Operating Leases (continued)

         Aircraft and Aircraft Engines Leases (continued)

         S/N 3656 and S/N 3676 are subject to similar 48-month leases,  expiring
on July 27, 2001, with an English regional airline.

         S/N 668 is subject to a 60-month  lease expiring on July 8, 2004 with a
regional carrier in Colombia.

         S/N 24 is  subject  to a lease  expiring  on  October  31,  2002 with a
regional carrier in North America.

3.       Medium-term secured bonds

         As mentioned  above, the Company raised funds through the Offering from
November 1995 to June 1997. Each $1,000 Unit subscribed in the offering included
an $850 medium-term  secured bond maturing on November 1, 2003. During 1997, the
Company accepted  subscriptions for 2,310 Units aggregating  $2,310,000 in Gross
Offering Proceeds.  Pursuant to the Prospectus,  the Company subsequently issued
$1,963,500  in Bonds  and  40,050  shares of  Preferred  Stock.  The Bonds  bear
interest at an annual rate of 12.94% through October 31, 1998 and, thereafter, a
variable  rate,  adjusted  annually on November 1, equal to the one-year  United
States Treasury bill rate plus 2%, but not less than 8.24%.  Interest is due and
payable on a quarterly basis, in arrears, on the first business day of February,
May,  August and November.  Based on the one-year  Treasury bill rate on October
31, 1998, the Bonds bear interest at the minimum rate of 8.24% per annum for the
period  November 1, 1998 through  October 31, 1999.  The carrying  amount of the
Bonds approximates fair value.

4.       Income taxes

         The items  comprising  income tax  expense  for the nine  months  ended
September 30, 1999 are as follows:

         Current tax provision:
                  Federal                                         $           -
                  State                                                   2,877
                                                                  --------------

                  Current tax provision                                   2,877

         Deferred tax provision:
                  Federal                                                39,050
                  State                                                  33,790

                  Deferred tax provision                                 72,840
                  Valuation allowance                                   (72,840)

         Total provision for income taxes                         $       2,877
                                                                  ==============

         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:

         Income tax expense at
               statutory federal income tax rate                  $      39,636
         State taxes net of federal benefit                               1,648
         State franchise taxes                                            2,877
         Tax rate differences                                            31,556
         Valuation allowance                                            (72,840)
                                                                  --------------

         Total provision for income taxes                         $       2,877
                                                                  ==============



<PAGE>



                                  JETFLEET III
                          Notes to Financial Statements
                               September 30, 1999


4.       Income taxes (continued)

         Temporary   differences  and   carryforwards   which  gave  rise  to  a
         significant  portion  of  deferred  tax assets  and  liabilities  as of
         September 30, 1999 are as follows:

         Deferred tax assets:
                  Net operating loss                              $     350,141
                  Maintenance reserves                                  209,083
                  Prepaid rent                                           40,073
                  State franchise taxes                                     272
                  Amortization of organizational costs                       92
                                                                  --------------
                           Subtotal                                     599,661
                           Valuation allowance                         (220,935)
                                                                  --------------
                           Net deferred tax assets                      378,726
         Deferred tax liability:
                  Depreciation on aircraft                              378,726

                                                                  $           -
                                                                  ==============

         The Company  anticipates that the deferred tax liability will be offset
by deferred tax assets and has recorded a valuation  allowance for the remaining
portion of deferred  tax assets as the Company  does not  anticipate  generating
adequate future taxable income to realize the benefits of the remaining deferred
tax assets on the balance  sheet.  The  Company's  net  operating  losses may be
carried  forward for fifteen or twenty years depending on when they were created
and begin to expire in 2009.

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  0.375%  of the  Company's  Aggregate  Gross  Proceeds
received through the last day of such quarter. In the first nine months of 1999,
the Company paid a total of $146,600 in management fees to JMC.

         JMC may receive a brokerage 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 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.  In connection  with the purchases of S/N 668 and S/N 24, the
Company paid JMC a total of $112,870 in brokerage  fees. No remarketing  fee was
paid to JMC in  connection  with  the sale of S/N  3611 or the  re-lease  of S/N
AC-621.

         As  discussed  in Note  2,  the  Company  owns  50%  and 33%  undivided
interests  in S/N 3676  and S/N 668,  respectively.  The  remaining  50% and 67%
undivided  interests are owned by AeroCentury  IV. Each co-owner of S/N 3676 and
S/N 668 receives its pro-rata share of rent income received from the lessee.

6.       Subsequent Event

         S/N AC-621 was returned by the original  lessee  during  October  1999,
after extending the lease from its original expiration date of May 31, 1999. S/N
AC-621 has been  re-leased to a regional  carrier in North America for a term of
six months.






<PAGE>



Item 2.  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:  the Company's lack of significant operating expenses for assets that
remain  on lease  and the  Company's  exposure  to loss as a result of Year 2000
issues are forward  looking  statements.  While the Company  believes  that such
statements  are  accurate,  the  Company's  business is  dependent  upon general
economic  conditions,  particularly  those that affect the demand for  turboprop
aircraft and engines,  including  competition  for turboprop and other aircraft,
and future trends and results 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.

Capital Resources and Liquidity

At the end of  September  1999,  the Company had cash  balances of $641,660  and
deposits of $690,550.  The  Company's  cash  balances were held for the interest
payment  made to the  Unitholders  in  November  1999,  for  normally  recurring
expenses and for investment in additional Income Producing Assets.

The primary  source of the  Company's  funds is rental  revenue  from the Income
Producing Assets. 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 Unitholders 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 April 2000 and July 2004.  The lease for S/N AC-621  originally  expired
during May 1999, but was extended until October 1999, at which time the aircraft
was  re-leased to a different  carrier for a period of six months.  S/N 3611 was
sold in March  1999 at the time it came off lease and the  sales  proceeds  were
used to purchase the undivided interests in S/N 668 and S/N 24.

As  discussed  in Item 1, the  interest  rate on the  Bonds was  12.94%  through
October 31, 1998 and a variable rate thereafter, calculated annually on November
1. The variable rate is equal to the higher of (i) 2% plus the annual yield rate
on one-year U.S. Treasury Bills on the last business day of October of that year
or (ii) 8.24%.  On October 31, 1998,  the one-year  United States  Treasury bill
rate was 4.10% which would  result in a bond rate of 6.10%.  Therefore,  for the
period  November 1, 1998 through October 31, 1999, the variable rate is equal to
8.24%.  The  Company has  determined  that the rate will remain at 8.24% for the
period November 1, 1999 through October 31, 2000.

The  increase  in cash flow from  operations  was due  primarily  to the Company
having  net  income in the first  nine  months of 1999  versus a net loss in the
first nine months of 1998 (see Results of Operations,  below) and the collection
of prepaid rent and maintenance reserves from lessees. This effect was partially
offset  by  an  increase  in  rent  receivable,  accounts  receivable  and  cash
classified as deposits in 1999.

The increase in cash flow used by investing  activities was due to the Company's
purchases of the undivided  interests in S/N 668 and S/N 24 during July 1999 and
August 1999,  respectively,  which were partially offset by the sale of S/N 3611
during March 1999.  There were no cash flows from  financing  activities  during
1999 or 1998 because the Offering terminated during June 1997.

Results of Operations

The Company  recorded net income of $113,700 or $0.14 and net loss of ($116,960)
or ($0.14)  per share for the nine  months  ended  September  30, 1999 and 1998,
respectively,  and net income of $67,590 or $0.08 and net loss of  ($19,670)  or
($0.04)  per share for the  three  months  ended  September  30,  1999 and 1998,
respectively.



<PAGE>



Rental income decreased by approximately $205,000 and $17,000 for the nine month
and three months ended September 30, 1999 versus 1998, respectively, as a result
of the sale of an  aircraft  during  October  1998,  the sale of S/N 3611 during
March  1999 and the  one-month  off-lease  period  for S/N 13 during  the second
quarter of 1999.  This  decrease was  partially  offset by the  purchases of the
undivided interests in S/N 668 and S/N 24 in July and August 1999, respectively.
Interest  income  increased  by  approximately  $49,000 and $12,000 for the nine
month and three month  periods,  respectively,  in 1999  because the Company had
higher cash  balances in 1999 as a result of the aircraft  sales in October 1998
and March 1999.  During 1999, the Company  recognized a gain in connection  with
the sale of S/N 3611.

Depreciation  decreased  by  approximately  $31,000  and $4,000  during the nine
months and three months ended  September 30, 1999 versus 1998 as a result of the
sale of two aircraft  during  October 1998 and March 1999.  This effect was only
partially  offset  by the  depreciation  expense  incurred  as a  result  of the
aircraft  purchases  during  July and August  1999,  discussed  above.  Interest
expense decreased by approximately  $390,000 and $130,000 during the nine months
and  three  months  of 1999  due to the  decrease  in the  rate  payable  on the
Company's Bonds from 12.94% to 8.24%,  effective November 1, 1998.  Professional
fees increased by  approximately  $45,000 and $27,000 during the nine months and
three months ended  September 30, 1999 versus 1998 due to legal fees incurred in
connection with the sale of S/N 3611 and the re-lease of S/N 13 and S/N AC-621.

Factors that May Affect Future Results

General Economic Conditions. The market for used aircraft has been cyclical, and
usually  reflects  economic  conditions  and  the  strength  of the  travel  and
transportation  industry.  At any time,  the  market  for used  aircraft  may be
adversely  affected by such factors as airline  financial  difficulties,  higher
fuel costs, and improved availability and economics of new replacement aircraft.

An adverse change in the global air travel  industry,  however,  could result in
reduced  carrier revenue and excess capacity and increase the risk of failure of
some weaker regional air carriers.  While the Company  believes that with proper
asset and lessee  selection  the impact of such  changes on the  Company  can be
reduced,  there is no  assurance  that the  Company's  business  will escape the
effects of such a global downturn,  or a regional  downturn in an area where the
Company has placed a significant amount of its assets.

Reliance on JMC. All management of the Company is performed by JMC pursuant to a
management  agreement between JMC and the Company.  The Board of Directors does,
however,  have ultimate control and supervisory  responsibility over all aspects
of  the  Company  and  does  owe  fiduciary   duties  to  the  Company  and  its
stockholders.  In addition,  while JMC may not owe any  fiduciary  duties to the
Company by virtue of the management  agreement,  the officers of the Company are
also officers or employees of JMC, and in that capacity owe fiduciary  duties to
the Company and the stockholders by virtue of holding such offices. Although the
Company has taken steps to prevent such  conflicts,  such  conflicts of interest
arising from such dual roles may still occur.

Ownership  Risks.  All of 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 Company's  ability to recover its purchase  investment in an asset
subject  to an  operating  lease is  dependent  upon the  Company's  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  Company's  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.  If the Company is unable to
remarket its aircraft  equipment on favorable terms when the operating lease for
such equipment expires, the Company's business,  financial condition, cash flow,
ability to service debt and results of operation could be adversely affected.

Lessee Credit Risk. If a lessee defaults upon his obligations under a lease, the
Company may be limited in its ability to enforce remedies. Most of the Company's
lessees are small domestic and foreign regional passenger airlines, which may be
even  more  sensitive  to  airline  industry  market  conditions  than the major
airlines.  As a  result,  the  Company's  inability  to  collect  rent  under  a
significant  lease or to  repossess  equipment  in the event of a  default  by a
lessee  could have a material  adverse  effect on the  Company's  revenue.  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 Company 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 Company would have the right to repossess the  equipment.  This procedure
under the  Bankruptcy  Code has been subject to significant  recent  litigation,
however,  and it is possible that the Company's  enforcement rights may still be
further  adversely  affected by a  declaration  of  bankruptcy  by a  defaulting
lessee.

Concentration   of  Leases.   Currently,   three  of  the  Company's   aircraft,
representing  20% of the  Company's  monthly  revenue,  are on  lease  to a U.S.
regional carrier.  If such lessee should default on its lease  obligations,  the
Company would  endeavor to gain  immediate  return of those  aircraft.  However,
because all three aircraft would have to be remarketed simultaneously,  there is
no assurance that the Company could remarket all three aircraft immediately.  If
such remarketing  required an extended period of time, the Company's  ability to
meet its obligations under the Bonds could be affected.

International  Risks. The Company's  portfolio  includes leases with foreign air
carriers.  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 Company 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 engine 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
remains  strong.  On the other hand,  a foreign  economy may remain  strong even
though the domestic U.S. economy is 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 to currency  conversion  fluctuations.  Although the Company's
current leases are all payable in U.S. dollars,  in the future,  the Company may
agree to leases that permit  payment in foreign  currency,  which would  subject
such lease  revenue to  monetary  risk due to currency  fluctuations.  Even with
dollar-denominated lease payment provisions, the Company could still be affected
by a devaluation  of the lessee's  local  currency which makes 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.

Competition.  The Company has many competitors in the aircraft leasing industry,
including leasing companies, banks and other financial institutions and aircraft
leasing  partnerships.  The market is highly competitive.  Most of the Company's
competitors have  substantially  greater  financial and other resources than the
Company.

Casualties,   Insurance  Coverage.  The  Company,  as  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  Company and such act may not
apply to aircraft  operated in foreign  countries.  Though the Company may carry
insurance or 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.

Leasing  Risks.  The  Company's  successful  negotiation  of  lease  extensions,
re-leases  and sales may be critical  to its  ability to achieve  its  financial
objectives,  and will involve a number of substantial risks. Demand for lease or
purchase of the assets depends on the economic condition of the airline industry
which is in turn highly  sensitive to general  economic  conditions.  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.  The demand for and value of many types of
older  aircraft in the recent past has been depressed by such factors as airline
financial  difficulties,  increased  fuel costs,  the number of new  aircraft on
order  and the  number  of  older  aircraft  coming  off  lease.  The  Company's
concentration  in a  limited  number  of  airframe  and  aircraft  engine  types
(generally, turboprop equipment) subjects the Company to economic risks if those
airframe or engine types should  decline in value.  The recent  introduction  of
"regional  jets" to serve on short routes  previously  thought to be  economical
only for turboprop  aircraft  operation  could decrease the demand for turboprop
aircraft,  while  at the same  time  increasing  the  supply  of used  turboprop
aircraft.  This could  result in lower lease rates and values for the  Company's
turboprop aircraft.

Risks Related to Regional Air Carriers. Because the Company has concentrated its
existing  leases on leases to  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,  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
results in a generally higher lease rate on aircraft, but may entail higher risk
of default or lessee bankruptcy.

Year 2000 Considerations. Because all administrative and management functions of
the Company are carried out by its management company,  JMC, JMC's readiness for
Year 2000 will determine the Company's  status.  JMC has reported to the Company
that it has directed its  information  technology  ("IT") manager to require any
software or hardware  purchased for use by management to have a warranty of Year
2000  compliance.  It has also directed its IT manager to study any systems that
may require Year 2000 remediation.

The IT  manager  has  determined  that,  because  JMC's IT  system is based on a
"MacOS" system,  JMC's internal  technology systems are ready for Year 2000, and
there  should  not be any  material  costs  associated  with  such  remediation.
Furthermore, the phone and internet systems have been warranted by their vendors
for Year 2000 compliance.  The Company's internal and administrative  operations
are  not  highly  dependent  on  any  other  advanced  technology  system,  and,
consequently,  management  believes  that the  Company's  exposure  to loss as a
result of Year 2000 issues in its internal and administrative  operations is not
significant.

Management  believes that the electronic systems used in the equipment leased by
the Company to lessees will not be materially affected by the Year 2000 and that
any  remediation  of the  technology  systems  embedded in the aircraft  that it
leases will not be a material  expense to the Company.  The Company has notified
all lessees of the Year 2000 problem and has requested information on the status
of each lessee's  study and  remediation  plans.  To date,  all of the Company's
lessees have reported Year 2000  compliance  with respect to the aircraft leased
by the Company to the lessee.  The Company  will  request  Year 2000  compliance
information from any new additional lessees, if any.

The Company has also been  consulting with all the  manufacturers  of its leased
equipment to confirm Year 2000 compliance, who have all indicated that they have
already notified or will shortly notify all lessee operators of their respective
Year 2000 issues.  Generally,  the type of used turboprop  aircraft owned by the
Company are not highly  dependent upon  date-sensitive  electronics,  unless the
lessee has added upgraded  electronics to the aircraft.  In any event, since the
Company's leases  generally place all maintenance and repair  obligations on the
lessees, to the extent that the aircraft are on lease when the Year 2000 problem
is  identified,  it  would  generally  be the  lessee's  and not  the  Company's
responsibility  to remediate  any Year 2000 problem with the leased  aircraft or
additional upgraded electronics.

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.  The Company has also inquired with its lessees regarding Year
2000 compliance of its  administrative  and operational  activities.  It appears
responding  lessees are  generally  aware of the Year 2000 issue and have either
completed a plan or are in progress  toward  Year 2000  compliance.  There is no
assurance  that their  compliance  plans will be  successful,  however,  and the
Company is not independently  verifying any information provided by its lessees.
The Company continues to monitor its current lessees and each additional lessee.

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.  This, of course,  may affect the business of the Company's
existing and potential lessees, and in turn, the Company.

The essential  functions of JMC and the Company are not  dependent  upon any key
third  party  vendors or  service  providers  related to the  leasing or finance
business, and consequently, the interruption of goods and services from any such
industry-specific  third party vendor or service  provider to JMC or the Company
is not likely to cause a material loss to the Company.  Of course, the Company's
ordinary  business  operation  is dependent  upon  vendors  that  provide  basic
services to  businesses  generally,  such as utility  companies,  phone and long
distance  companies,  courier  services and banking  institutions.  The Company,
through its  managment and JMC, is  monitoring  the Year 2000  readiness of such
providers.  Management believes that a temporary interruption in services to the
Company by these types of service  providers  caused by Year 2000 problems would
not cause material  losses to the Company.  An extended loss of these  services,
however,   could   adversely   affect  the  Company's   business  and  financial
performance.  The Company has not made any  contingency  plans for the  extended
loss of these basic services.

The Company has not  incurred  and does not  anticipate  any  significant  costs
related to the Year 2000 issue.





<PAGE>



                                   SIGNATURES


Pursuant to the  requirements  of Section 13 or 15(d) of the  Securities  Act of
1934,  the  Registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized on November 15, 1999.

                                                   JETFLEET III


                                                   By: /s/ Neal D. Crispin
                                                      ----------------------
                                                      Neal D. Crispin
                                              Title:  President

Pursuant to the requirements of the Securities Act of 1934, this report has been
signed below by the following  persons in the  capacities  indicated on November
15, 1999.

Signature                                  Title

/s/ Neal D. Crispin
----------------------            President and Chairman of the
Neal D. Crispin                   Board of Directors of the Registrant
                                  Chief Financial Officer