SECURITIES AND EXCHANGE COMMISSION
                             Washington, D. C. 20549

                                    FORM 10-K
(Mark One)
[X]   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
      ACT OF 1934 [FEE REQUIRED]
      For the fiscal year ended December 31, 1996

                                       OR

[ ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
      For the transition period from

                      _______________ to _________________

                         Commission file number 2-80216

                            LEASERVICE INCOME FUND-I
             (Exact name of registrant as specified in its charter)

           California                                    06-1085385
  ----------------------------              ------------------------------------
  (State or other jurisdiction              (I.R.S. Employer Identification No.)
of incorporation or organization)

25 East Spring Valley Avenue, Maywood, New Jersey                     07607
-------------------------------------------------                  ----------
    (Address of principal executive offices)                       (Zip Code)

Registrant's telephone number, including area code: (201) 368-2515

Securities registered pursuant to Section 12(b) of the Act:

Title of each Class: None

Name of each exchange on which registered: None

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

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

      As of December 31, 1996, 76,328 Units of Limited Partnership interest were
outstanding. No market exists for the Units of Limited Partnership interest and,
therefore, there exists no aggregate market value at December 31, 1996.

                    Documents Incorporated by Reference: None

                                       -1-


<PAGE>


                                     PART I

Item 1.         Business

GENERAL

                Leaservice Income Fund-I (the  "Partnership") was organized as a
limited  partnership  under the Uniform Limited  Partnership Law of the State of
California on April 22, 1983. During the period from June 23, 1983 to October 9,
1984, the Partnership  sold an aggregate of 76,328 units of limited  partnership
interests  ("Units")  in the  Partnership  at a purchase  price of $100 per Unit
pursuant to a  Registration  Statement on Form S-1 (File No.  2-80216)  declared
effective by the  Securities  and  Exchange  Commission  on June 23,  1983.  The
Partnership  actively engaged in the equipment  leasing business from 1983 until
June 1986 during  which it  purchased  equipment  subject to nineteen  operating
leases having an aggregate  purchase price of  approximately  $9,462,615.  Since
June 1986 the Partnership  has not purchased any equipment.  Since May 24, 1991,
when the  Partnership  was  dissolved by virtue of the  dissolution  of its sole
general  partner,  Leaservice  Partners,  a New York  general  partnership,  the
Partnership has been in the process of winding up its business.  By December 31,
1993, all operating leases to which the Partnership's equipment had been subject
had expired and all of its equipment,  which by then had been fully depreciated,
was written off. A Certificate of  Cancellation  was filed with the Secretary of
State of the State of California on December 17, 1997

DISSOLUTION OF THE PARNERSHIP

                The Partnership's sole general partner was Leaservice  Partners,
a New York general  partnership  which  initially  consisted of three  corporate
partners:  (i) National Industrial Services Corp., a New York corporation (which
changed its name to Capital  Market  Services  Corp and was merged with and into
Pittsburgh Annealing Box Company, a Pennsylvania  corporation  ("PAB")in October
1987),  and which served as the managing  partner of Leaservice  Partners;  (ii)
Mid-States  Resources,  Inc., a Missouri corporation which dissolved on March 1,
1996; and (iii) Mid-States  Leasing,  Inc., a Missouri  corporation which on May
24, 1991 withdrew from  Leaservice  Partners  causing the general  partnership's
dissolution; Mid-States Leasing, Inc. was formally dissolved on June 29, 1991.

                The dissolution of Leaservice  Partners on May 24, 1991,  caused
the  dissolution of the Partnership  pursuant to the terms of the  Partnership's
Amended and Restated Agreement of Limited Partnership (the "Limited  Partnership
Agreement") . The Partnership's limited partners were advised of the dissolution
of  Leaservice  Partners  and its effect on the  Partnership  and were given the
opportunity,  pursuant  to the terms of the  Limited  Partnership  Agreement  to
continue the Partnership and elect a new general partner at a meeting of limited
partners  scheduled for July 8, 1991. At this meeting,  the requisite  number of
limited partners failed to vote to continue the Partnership.

                 Accordingly,  since May 1991, the  Partnership  has been in the
process of winding up its affairs.  From May 1991 until January  1998,  PAB, (as
the successor to the sole managing partner of Leaservice  Partners,  the general
partnership that served as the sole general partner of the Partnership)  oversaw
the winding up of the business of Leaservice  Partners and the  Partnership.  On
January  7,  1998,  Capital  Resource  Group,  L.L.C.,  a  Pennsylvania  limited
liability  company  ("CRG") assumed all of the rights and all of the obligations
of PAB in the  Partnership  and in Leaservice  Partners.  CRG is overseeing  the
final stages of the winding up of the affairs of the Partnership.


                                                        -2-


<PAGE>


Item 2.         Properties

                During the year ended  December  31,  1996 and  thereafter,  the
Partnership has not owned or leased any material property.

Item 3.         Legal Proceedings

                None.

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

                No matters were submitted to a vote of security holders, through
the solicitation of proxies or otherwise,  during the fourth quarter of the year
covered by this report or at anytime thereafter.


                                     PART II

Item 5.         Market for the Partnership's Common
                Equity and Related Stockholder Matters

                (a) The  Partnership's  Units have never been  publicly  traded.
Pursuant to the terms of the Partnership's Limited Partnership Agreement, a Unit
could  be  transferred  only  after  certain  requirements  were  satisfied  and
transferees  could become limited  partners only with the consent of the general
partner,  which consent  could be granted or withheld at the sole  discretion of
the general partner.  There has never been a market for such Units and no public
trading market ever developed for the Units.

                (b) As of  December  31, 1996 and through the date of the filing
of this  Annual  Report on Form 10-K,  there were  approximately  800 holders of
record  of the  Partnership's  Units and one  holder  of a  general  partnership
interest in the Partnership.

Item 6.         Selected Financial Data

<TABLE>
<CAPTION>

                                                          Fiscal           Fiscal          Fiscal           Fiscal          Fiscal
                                                           Year             Year            Year             Year            Year
                                                          Ended            Ended           Ended            Ended           Ended
                                                         12/31/96         12/31/95        12/31/94         12/31/93        12/31/92
                                                        ---------        ---------       ---------        ---------       ---------
<S>                                                     <C>              <C>             <C>              <C>             <C>      
Total Income ....................................       $      10        $   6,059       $   4,571        $  86,087       $   5,620
Net Income (Loss) Allocable 
to Limited Partners .............................          (3,990)           2,508          (8,815)          69,391         (20,904)
Net Income (Loss) Allocable
to General Partner ..............................             (40)             443             (89)          12,246            (211)
Distributions to Limited Partners ...............             -0-              -0-             -0-              -0-             -0-
Equipment Purchased for Rental ..................             -0-              -0-             -0-              -0-             -0-

</TABLE>

                                                                 -3-


<PAGE>
<TABLE>
<CAPTION>


                                                          Fiscal           Fiscal          Fiscal           Fiscal          Fiscal
                                                           Year             Year            Year             Year            Year
                                                          Ended            Ended           Ended            Ended           Ended
                                                         12/31/96         12/31/95        12/31/94         12/31/93        12/31/92
                                                        ---------        ---------       ---------        ---------       ---------
<S>                                                     <C>              <C>             <C>              <C>             <C>      
Total Assets ....................................       $ 139,247        $ 139,277       $ 137,326        $ 144,469       $ 173,479
Total Liabilities ...............................          75,731           71,731          72,731           70,970         181,617
Total Partners' Equity (Deficiency) .............          63,516           67,546          64,595           73,499          (8,138)

</TABLE>


Item 7.         Management's Discussion and Analysis of
                Financial Condition and Results of Operations

RESULTS OF OPERATIONS

                The  Partnership  was  dissolved in fiscal 1991 and continued to
wind up its affairs  during the fiscal year ended  December 31, 1996. See Item 1
"Business".  The Partnership  ceased  purchasing  equipment subject to operating
leases in June 1986,  because,  in the  opinion of the  general  partner,  total
prospective  returns  attainable  on  such  leases  (taking  into  consideration
residual  equipment value risks which the Partnership  would be subject to) were
not been favorable to the Partnership. During the fiscal year ended December 31,
1993, all operating leases to which the Partnership's equipment had been subject
expired  or were  otherwise  terminated  and all  equipment  then  owned  by the
Partnership  (which had an original  cost of  $104,197  and which had been fully
depreciated)  was written  off. In  addition,  amounts  held as deposits for the
final  months  rent under the  terminated  leases were  recognized  as income in
fiscal 1993.  During fiscal 1996, the  Partnership  held no equipment for rental
under operating leases and no deposits under operating leases.

                During the fiscal years ended December 31, 1996,  1995 and 1994,
the Partnership had no operating lease rentals.  Operating expenses were $4,040,
$3,108 and $13,475, respectively in fiscals 1996, 1995 and 1994.

                Net income  (loss) for the years ended  December 31, 1996,  1995
and 1994 was  ($4,030),  $2,951 and  ($8,904)  respectively.  Net (loss) for the
years  December  31, 1996 and  December  31,  1994 was  allocated  ($3,990)  and
($8,815) (99%)  respectively,  to the limited partners and ($40) and ($89) (1%),
respectively to the general partner.  Net income for the year ended December 31,
1995  was  allocated  $2,508  (85%) to the  limited  partners  and  $443  (15%),
respectively to the general partner.

                For the years ended  December  31, 1996,  1995 and 1994,  income
(loss)  per Unit on a  weighted  average  basis  was  ($.05),  $.03  and  ($.12)
respectively.


                                                        -4-


<PAGE>


LIQUIDITY AND CAPITAL RESOURCES

                The  Partnership  had sufficient  funds to cover its diminishing
expenses in 1997.

Item 8.         Financial Statements and Supplementary Data

                (Annexed hereto starting on page F-1)

Item 9.         Changes in and Disagreements on Accounting and
                Financial Disclosure

                As reported in the Company's  Annual Report on Form 10-K for the
year ended  December 31, 1992, on May 14, 1993 the Company  notified  Deloitte &
Touche,  which had previously  been the  independent  accountant of the Company,
that it had been  dismissed.  On  September  10, 1992 Capuano & Hartley CPAs was
selected to audit the Company's financial statements for the year ended December
31,  1991.  Capuano &  Hartley,  CPAs  served as the  Partnership's  independent
accountants  from  September  10,  1992 until they were  formally  dismissed  on
December 31, 1997. As reported in the Company's Current Report on Form 8-K dated
February 5, 1998,  on December  31, 1997,  the  Partnership  formally  dismissed
Capuano & Hartley, CPAs as its independent accountant because Capuano & Hartley,
CPAs had disbanded in 1996. On December 23, 1997, the Partnership engaged Wiss &
Co. to serve as its independent accountants to audit the Partnership's financial
statements for the years ended December 31, 1993,  1994,  1995, 1996 and 1997 as
part of the  Partnership's  effort to complete winding up its affairs  following
the  Partnership's  dissolution  on May 24, 1991.  As reported in the  Company's
Current  Report  on Form 8-K  dated  February  5,  1998,  while  serving  as the
Partnership's independent accountants from September 10, 1992 until December 31,
1997,  Capuano  &  Hartley,  CPAs  audited  the  Registrant's  annual  financial
statements  for the years ended  December 31, 1991 and 1992 and their reports on
these  financial  statements did not contain an adverse opinion or disclaimer of
opinion  and  were  not  qualified  or  modified  as to  uncertainty,  scope  or
accounting  principals.  Until  December  23,  1997,  the  Partnership  had  not
requested Capuano & Hartley,  CPAs or any other independent  accountant to audit
the  Partnership's  financial  statements for the years ended December 31, 1993,
1994,  1995,  1996 and 1997  because as more  particularly  described  in Item 1
above,  the  Partnership has been in the process of winding up its affairs since
its  dissolution  during fiscal 1991,  has engaged in no new business since June
1986 and  believed  that the cost of  annual  audits  exceeded  the  value to be
derived from same in light of the Partnership's small and diminishing assets and
the lack of a public market for its Units of limited partnership interest.


                                    PART III

Item 10.        Directors and Executive Officers of the Registrant

                The general partner of the Partnership was Leaservice  Partners,
a New York general  partnership  which has  dissolved on May 21, 1991.  From May
1991 until January 1998, PAB, (as the successor to the sole managing  partner of
Leaservice  Partners,  the general  partnership  that served as the sole general
partner of the Partnership) oversaw the winding up of the business of Leaservice
Partners and the Partnership.  On January 7, 1998, CRG assumed all of the rights
and all of the obligations of PAB in the Partnership and in Leaservice Partners.
CRG is  overseeing  the final  stages of the  winding  up of the  affairs of the
Partnership.


                                       -5-


<PAGE>


The executive  officers and directors of PAB during the year ended  December 31,
1996 were Sam Michaels, Chief Executive Officer,  President and Director, Edward
J.  Landau,  Secretary  and  Director  and John A.  Kenna,  Vice  President  The
executive  officers and managers of CRG are Sam Michaels,  Chairman of the Board
and  Manager,  Edward  J.  Landau,  Secretary  and  Manager  and Gary  Hitechew,
President and Manager.

Item 11.        Management Remuneration and Transactions

                (Certain  of the  capitalized  terms  used in this  section  are
defined at the end of the section.)

                The Partnership's  Limited  Partnership  Agreement provides that
the general  partner is compensated for services  performed in connection  with,
among other things, managing the operations of the Partnership.  As compensation
for  the  management  services  it  performs  the  general  partner  receives  a
management fee payable  quarterly in an amount equal to 3% of the  Partnership's
gross revenues derived from full payout leases,  6% of the  partnership's  gross
revenues  derived  from  operating  leases  and  3% of the  Partnership's  gross
revenues  derived  from  the  sale of  equipment.  If the  Partnership  does not
generate sufficient cash from operations to pay the management fee or even if it
does,  at the  discretion of the General  Partner,  such fees will be accrued as
debt of the Partnership payable out of cash available for distribution.

                In  addition  to the  management  fee,  the  general  partner is
allocated 1% of the  Partnership's  net losses and 15% of the  Partnership's net
income.  The general partner also is reimbursed for any direct expenses incurred
by it, its employees or agents in connection with the Partnership's business and
on behalf of the Partnership,  except that the general partner is not reimbursed
for any general and  administrative  expenses or other overhead  expenses of the
general  partner  and is not  reimbursed  for any  organizational  and  offering
expenses in excess of 3% of the gross proceeds of the offering of Units.

                During the fiscal year ended December 31, 1996, the  Partnership
did not pay or accrue a management  fee applicable to the general  partner;  the
general  partner was allocated  ($40) (1%) of the net (loss) of the  Partnership
for such year.

Item 12.        Security Ownership of Certain Beneficial
                Owners and Management

                (a) No person owns of record,  or is known by the Partnership to
own  beneficially,  more than 5% of any class of the  voting  securities  of the
Partnership

                (b) The general partner's  general  partnership  interest in the
Partnership represents a 15% interest in the Partnership's annual net income for
financial  reporting purposes and tax allocations of 1% of net losses and 15% of
net income.

Item 13.        Certain Relationships and Related Transactions

                None

Item 14.        Exhibits, Financial Statement
                Schedules and Reports on Form 8-K

                (a)    Exhibits


                                       -6-


<PAGE>


                       (3)      Restated  and   Amended  Agreement   of  Limited
Partnership  of the  Partnership  dated as of June  23,  1983.  Incorporated  by
reference to Exhibit A to the  definitive  Prospectus  dated June 23, 1983 filed
with the  Securities and Exchange  Commission  pursuant to Rule 424(b) under the
Securities Act of 1933.

                (b)    Financial Statements and Schedules

                       Financial Statements                             Page No.
                       --------------------                             --------

                       Independent Auditor's Report                          F-1

                       Balance Sheets as of December 31, 1996 and 1995       F-2

                       Statements of Operations for the years ended
                       December 31, 1996, 1995 and 1994                      F-3

                       Statements of Changes in Partners' Equity
                       (Deficiency) for the years ended
                       December 31, 1996, 1995 and 1994                      F-4

                       Statements of Cash Flows for the years ended
                       December 31, 1996, 1995 and 1994                      F-5

                       Notes to Financial Statements                         F-6

                       All other  schedules  are omitted  because they are not
                required or because the required information is presented in the
                financial statements or related notes.

                (c)    Reports on Form 8-K

                       The Partnership did not file  any Current Reports on Form
8-K during the fiscal year ended December 31, 1996.


                                       -7-


<PAGE>


                                   SIGNATURES


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

                                      LEASERVICE INCOME FUND - I (dissolved)

                                      By:  LEASERVICE PARTNERS (dissolved)

                                      By: CAPITAL RESOURCE GROUP LLC (successor
                                             to the managing partner of 
                                             Leaservice Partners)

Dated: September 29, 1998             By: /s/ Edward J. Landau
                                          --------------------
                                              Edward J. Landau
                                              Secretary

                Pursuant to the  requirements of the Securities  Exchange Act of
1934,  this report has been signed below by the  following  persons on behalf of
the Registrant and in the capacities and on the dates indicated:

Signature                   Title                             Date
---------                   -----                             ----

/s/ Sam Michaels            Chairman of the Board             September 29, 1998
----------------            and Manager
Sam Michaels                (Principal Executive Officer)


/s/ Patrick Costello        Consultant                        September 29, 1998
--------------------        Principal Accounting and
Patrick Costello            Financial Officer


/s/ Edward J. Landau        Secretary and Manager             September 29, 1998
--------------------
Edward J. Landau


                                       -8-


<PAGE>


                          INDEPENDENT AUDITORS' REPORT


General Partner and Limited Partners
Leaservice Income Fund - I


We have audited the accompanying balance sheets of Leaservice Income Fund - I (A
California Limited Partnership) as of December 31, 1996 and 1995 and the related
statements of operations,  changes in partners'  equity and cash flows, for each
of three years in the period  then ended  December  31,  1996.  These  financial
statements  are  the  responsibility  of  the  Partnership's   management.   Our
responsibility  is to express an opinion on these financial  statements based on
our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our  opinion,  such  financial  statements  present  fairly,  in all material
respects,  the financial  position of  Leaservice  Income Fund - I (A California
Limited  Partnership)  at  December  31,  1996 and 1995,  and the results of its
operations  and its cash flows for each of the three  years in the period  ended
December 31, 1996 in conformity with generally accepted accounting principles.

As indicated in the Notes to the financial statements,  the Partnership does not
own or hold any equipment for lease and has not entered into any new agreements.



                                                             WISS & COMPANY, LLP

Livingston, New Jersey
January 3, 1998


                                       F-1


<PAGE>


                           LEASERVICE INCOME FUND - I
                       (A CALIFORNIA LIMITED PARTNERSHIP)

                                 BALANCE SHEETS


                                                            December 31,
                                                    ---------------------------
                                                       1996              1995
                                                    ---------         ---------

                                     ASSETS

CASH AND CASH EQUIVALENTS ..................        $ 139,247         $ 139,277
                                                    =========         =========


                        LIABILITIES AND PARTNERS' EQUITY

LIABILITIES:
  Accrued expenses .........................        $   8,000         $   4,000
  Sales tax payable ........................           44,216            44,216
  Due to General Partner ...................           23,515            23,515
                                                    ---------         ---------
                                                       75,731            71,731

PARTNERS' EQUITY:
     Limited Partners ......................           71,297            75,287
     General Partners ......................           (7,781)           (7,741)
                                                    ---------         ---------
        Total Partners' Equity .............           63,516            67,546
                                                    ---------         ---------
                                                    $ 139,247         $ 139,277
                                                    =========         =========


                                       F-2


<PAGE>


                           LEASERVICE INCOME FUND - I
                       (A CALIFORNIA LIMITED PARTNERSHIP)

                            STATEMENTS OF OPERATIONS


                                               Year Ended December 31,
                                           -------------------------------
                                             1996        1995       1994
                                           --------    --------   --------

INTEREST INCOME ........................   $     10    $  6,059   $  4,571

OPERATING EXPENSES .....................      4,040       3,108     13,475
                                           --------    --------   --------
NET INCOME (LOSS) ......................   $ (4,030)   $  2,951   $ (8,904)
                                           ========    ========   ========



ALLOCATION OF NET INCOME (LOSS):

  Net income (loss) allocable
    to General Partner .................   $    (40)   $    443   $    (89)
                                           ========    ========   ========

  Net income (loss) allocable
    to Limited Partners ................   $ (3,990)   $  2,508   $ (8,815)
                                           ========    ========   ========

  Net income (loss) per weighted average
    Limited Partnership Unit ...........   $   (.05)   $    .03   $   (.12)
                                           ========    ========   ========


See the accompanying notes to financial statements.


                                       F-3


<PAGE>

<TABLE>
<CAPTION>

                                                     LEASERVICE INCOME FUND - I



                                                 (A CALIFORNIA LIMITED PARTNERSHIP)
                                              STATEMENTS OF CHANGES IN PARTNERS' EQUITY


                                                                                                                            Total
                                                                                          Limited Partners                Partners'
                                                                 General             --------------------------            Equity
                                                                 Partner             (Units)          (Amounts)         (Deficiency)
                                                                 -------             -------          ---------         ------------

<S>                                                             <C>                   <C>              <C>                 <C>     
Balance, January 1, 1994 ............................           $ (8,095)             76,328           $ 81,594            $ 73,499
  Year Ended December 31, 1994 -
      Net loss ......................................                (89)                  0             (8,815)             (8,904)
                                                                --------            --------           --------            --------
BALANCE, DECEMBER 31, 1994 ..........................             (8,184)             76,328             72,779              64,595
  Year Ended December 31, 1995 -
     Net income .....................................                443                   0              2,508               2,951
                                                                --------            --------           --------            --------
BALANCE, DECEMBER 31, 1995 ..........................             (7,741)             76,328             75,287              67,546
  Year Ended December 31, 1996 -
     Net loss .......................................                (40)                  0             (3,990)             (4,030)
                                                                --------            --------           --------            --------
BALANCE, DECEMBER 31, 1996 ..........................           $ (7,781)             76,328           $ 71,297            $ 63,516
                                                                ========            ========           ========            ========


See the accompanying notes to financial statements.


                                                                 F-4

</TABLE>


<PAGE>

<TABLE>
<CAPTION>

                                                     LEASERVICE INCOME FUND - I
                                                 (A CALIFORNIA LIMITED PARTNERSHIP)

                                                      STATEMENTS OF CASH FLOWS


                                                                                              Year Ended December 31,
                                                                                ---------------------------------------------------
                                                                                   1996                 1995                 1994
                                                                                ---------            ---------            ---------
<S>                                                                             <C>                  <C>                  <C>       
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net income (loss) ................................................           $  (4,030)           $   2,951            $  (8,904)
   Adjustments to reconcile net income (loss)
   to net cash flows from operating activities:
      Accrued expenses ..............................................               4,000               (1,000)               1,761
                                                                                ---------            ---------            ---------
         Net Cash Flows From Operating Activities ...................                 (30)               1,951               (7,143)

CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR ........................             139,277              137,326              144,469
                                                                                ---------            ---------            ---------

CASH AND CASH EQUIVALENTS, END OF YEAR ..............................           $ 139,247            $ 139,277            $ 137,326
                                                                                =========            =========            =========


                                                                 F-5

</TABLE>

<PAGE>


                           LEASERVICE INCOME FUND - I
                       (A CALIFORNIA LIMITED PARTNERSHIP)

                          NOTES TO FINANCIAL STATEMENTS


Note 1 -  Nature of the Business and Summary of Significant Accounting Policies:

          NATURE  OF  THE   BUSINESS  -   Leaservice   Income  Fund  -  I  ("the
          Partnership")  is a  California  Limited  Partnership  formed  for the
          purpose of acquiring  various  types of capital  equipment and leasing
          same to third parties  primarily on a short-term  basis. On August 18,
          1983, the first limited partners were admitted to the Partnership. The
          leasing of acquired equipment commenced on October 1, 1983.

          Leaservice Partners  ("Leaservice"),  a New York General  Partnership,
          was the sole General Partner of the Partnership until May 24, 1991.

          The   Partnership  was  informed  that  effective  as  of  such  date,
          Leaservice,  had  been  dissolved  due to  the  withdrawal  from  that
          partnership  of one of its  general  partners.  Section  14.1.1 of the
          Amended and Restated Partnership Agreement of the Partnership provides
          that the  Partnership is dissolved  upon the  dissolution of a general
          partner.

          A meeting  of limited  partners  was  scheduled  for the  purposes  of
          considering  whether the  Partnership  should be  continued  and a new
          general partner elected.  However, limited partners owning 50% or more
          of the  total  outstanding  Units of the Fund  voting  in person or by
          proxy did not vote to continue the existence of the  Partnership or to
          elect a new general partner.

          The sole remaining entity that once constituted  Leaservice is winding
          up the business of the Partnership.

          USE  OF  ESTIMATES  -  The  preparation  of  financial  statements  in
          conformity  with generally  accepted  accounting  principles  requires
          management to make estimates and assumptions  that affect the reported
          amounts of assets and liabilities and disclosures of contingent assets
          and  liabilities  at the  date  of the  financial  statements  and the
          reported amounts of revenues and expenses during the reporting period.
          Actual results could differ from those estimates.

          ALLOCATION  OF INCOME AND LOSSES - Net income is allocated  15% to the
          General Partner, and 85% to the Limited Partners.  Net losses incurred
          as a result of operations are allocated 1% to the General Partner, and
          99% to the Limited Partners.

          DISTRIBUTIONS  - To the extent that cash  available  for  distribution
          allows,  distributions  to limited  partners  will not be less than an
          amount equal to 50% of the limited  partners'  share of the net income
          of the Partnership.


                                       F-6


<PAGE>


                           LEASERVICE INCOME FUND - I
                       (A CALIFORNIA LIMITED PARTNERSHIP)

                          NOTES TO FINANCIAL STATEMENTS


          FINANCIAL INSTRUMENTS - Financial instruments include cash and accrued
          expenses.   The  amounts   reported  for  financial   instruments  are
          considered to be reasonable approximations of their fair values, based
          on market information available to management.

          CASH  AND CASH  EQUIVALENTS  -  Includes  cash  and  interest  bearing
          deposits  with  original  maturity  dates of less  than 90  days.  The
          Partnership  maintains  its cash  balances in a financial  institution
          which is insured by the Federal Deposit  Insurance  Corporation for up
          to $100,000.  At December  31, 1996,  the  Partnership  had  uninsured
          balances totalling approximately $116,000.

          INCOME  TAXES  -  Leaservice  Income  Fund  - I  is  classified  as  a
          partnership for Federal income tax purposes. Net income and losses are
          allocated  between the General and Limited  Partners in the same ratio
          as for financial reporting purposes.

Note 2 -  Operations:

          The Partnership  has not purchased any equipment  subject to operating
          leases since June 1986 and no equipment has been held for rental under
          operating leases since 1993.

Note 3 -  Partners' Equity (Deficiency):

          From  August 8, 1983 to October 9, 1984,  the  expiration  date of the
          offering,  Limited Partners representing 76,328 units were admitted to
          the  Partnership.  As a result thereof,  the Partnership  realized net
          proceeds of $7,022,176 from the sale of such units.

          Pursuant to the limited  partnership  agreement,  Leaservice  receives
          from the Partnership as General  Partner,  a quarterly  management fee
          equal to 3% of the  Partnership's  gross  revenues  derived  from full
          payout leases,  6% of the  Partnership's  gross revenues  derived from
          operating  leases and 3% of the  Partnership's  gross revenues derived
          from the sale of equipment.

          For the years ended  December 31, 1996,  1995 and 1994,  no management
          fees were earned under the  agreement.  Net income is allocated 15% to
          the General Partner and 85% to the Limited Partners. In addition,  the
          General Partner is entitled to receive an annual cash  distribution an
          amount equal to 15% of the Partnership's net income subject to certain
          limitations.  Net losses are  allocated 1% to the General  Partner and
          99% to the Limited Partners.


                                       F-7


<PAGE>


                           LEASERVICE INCOME FUND - I
                       (A CALIFORNIA LIMITED PARTNERSHIP)

                          NOTES TO FINANCIAL STATEMENTS


          Organization and offering  expenses up to a maximum of 3% of the gross
          proceeds of the offering have been  reimbursed to the General  Partner
          by the Partnership from the proceeds of the public offering.

          Net income (loss) per weighted  average limited  partnership  unit has
          been  computed  based  on  the  weighted  average  number  of  limited
          partnership units outstanding as of the first day of each month during
          the years ended December 31, 1996, 1995 and 1994.


                                       F-8