<PAGE>   1


                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
--------------------------------------------------------------------------------
                                    FORM 10-K

[X] Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934

                  FOR THE FISCAL YEAR ENDED DECEMBER 31, 2000

[ ] 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 33-89506
                                                --------

                         BERTHEL GROWTH & INCOME TRUST I
                         -------------------------------
             (Exact name of Registrant as specified in its charter)

            Delaware                                   52-1915821
            --------                                   ----------
 (State or other jurisdiction of            (I.R.S. Employer Identification No.)
 incorporation or organization)

                701 Tama Street, Marion, Iowa            52302
                ----------------------------------------------
               (Address of principal executive offices) (Zip Code)

       Registrant's telephone number, including area code: (319) 447-5700
                                                            -------------

        Securities registered pursuant to Section 12(b) of the Act: NONE
                                                                    ----

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

                          Shares of Beneficial Interest
                          -----------------------------
                                 Title of Class

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 filings
requirements for the past 90 days. Yes [X] No [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]

As of March 1, 2001, 10,541 Shares of Beneficial Interest were issued and
outstanding. Based on the book value of $119.31 per share as of February 28,
2001, the aggregate market value at March 1, 2001 was $1,257,647.

                            EXHIBIT INDEX AT PAGE 36


<PAGE>   2


                         BERTHEL GROWTH & INCOME TRUST I
                          2000 FORM 10-K ANNUAL REPORT
                                TABLE OF CONTENTS

                                                                         PAGE
                                     PART I

Item 1.   Business.....................................................    3
Item 2.   Properties...................................................    4
Item 3.   Legal Proceedings............................................    4
Item 4.   Submission of Matters to a Vote of Shareholders..............    4


                               PART II

Item 5.   Market for the Registrant's Common Equity
          and Related Shareholder Matters..............................    4
Item 6.   Selected Financial Data......................................    5
Item 7.   Management's Discussion and Analysis
          of Financial Condition and Results of Operations.............    5
Item 7A.  Quantitative and Qualitative Disclosure About Market Risk....   11
Item 8.   Financial Statements and Supplementary Data..................   12
Item 9.   Changes in and Disagreements with Accountants
          on Accounting and Financial Disclosure.......................   30


                              PART III

Item 10.  Directors and Executive Officers of the Registrant...........   30
Item 11.  Executive Compensation.......................................   33
Item 12.  Security Ownership of Certain Beneficial
          Owners and Management........................................   34
Item 13.  Certain Relationships and Related Transactions...............   34


                                     PART IV

Item 14.  Exhibits, Financial Statement Schedules
          and Reports on Form 8-K......................................   34

SIGNATURES.............................................................   35

EXHIBIT INDEX..........................................................   36


                                       2
<PAGE>   3


                                     PART I

ITEM 1. BUSINESS
Berthel Growth & Income Trust I (the "Trust"), a Delaware business trust that
has elected to be treated as a business development company under the Investment
Company Act of 1940, was organized on February 10, 1995. The Trust's
Registration Statement was declared effective June 21, 1995, at which time the
Trust began offering Shares of Beneficial Interest ("shares"). The underwriting
period was completed on June 21, 1997, with a total of $10,541,000 raised. The
Trust's principal office is located at 701 Tama Street, Marion, Iowa 52302. The
Trust is a closed-end management investment company designed primarily as a
long-term investment and not as a trading vehicle.

On May 4, 1998, Berthel SBIC, LLC (the "SBIC"), a wholly owned subsidiary of the
Trust within the meaning of Section 2(a)(43) of the Investment Company Act of
1940, received a license to operate as a Small Business Investment Company from
the Small Business Administration ("SBA"). The SBIC was formed in 1997. The
Trust funded the SBIC with a capital contribution of $5,000,000, the minimum
amount eligible to be contributed in order to receive leverage under the SBA
Small Business Investment Company program. The Trust Advisor and Independent
Trustees also serve as the Independent Managers of the SBIC. As used
hereinafter, with respect to investment activities, the term "Trust" includes
investment activities of the SBIC.

Berthel Fisher & Company Planning, Inc. (the "Trust Advisor") is a corporation
organized under the laws of the State of Iowa on March 20, 1989. The Trust
Advisor is a registered investment advisor organized as a wholly owned
subsidiary of Berthel Fisher & Company ("Berthel Fisher"). Berthel Fisher, a
financial services holding company, was formed in 1985 as an Iowa corporation to
hold the stock of Berthel Fisher & Company Financial Services, Inc. ("Financial
Services"), a broker-dealer registered with the National Association of
Securities Dealers, Inc. Financial Services was the dealer-manager for the
Trust's offering of its Shares of Beneficial Interest.

The Trust will terminate upon the liquidation of all of its investments, but no
later than June 21, 2007. However, the Independent Trustees have the right to
extend the term of the Trust for up to two (2) additional one-year periods if
they determine that such extensions are in the best interest of the Trust and in
the best interest of the shareholders, after which the Trust will liquidate any
remaining investments as soon as practicable but in any event within three
years.

The investment objective of the Trust is to provide capital appreciation
potential and current income by investing primarily in subordinated debt,
preferred stock and related equity securities issued by small and medium sized
companies that are in need of capital and that the Trust Advisor believes offer
the opportunity for growth or appreciation of equity value while being able, if
required to do so, to service current yield bearing securities. The Trust,
through its Trust Advisor, directs its investment efforts to small and medium
sized companies which, in the view of the Trust Advisor, provides opportunities
for significant capital appreciation and prudent diversification of risk. The
Trust seeks investments in a variety of companies and industries. The securities
of portfolio companies purchased by the Trust typically will be rated below
investment grade, and more frequently, not rated at all. The securities of
portfolio companies will often have significant speculative characteristics.


                                       3
<PAGE>   4

ITEM 2. PROPERTIES
The Trust does not own or lease any real estate.

ITEM 3. LEGAL PROCEEDINGS
None

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SHAREHOLDERS
No matters were submitted to a vote of shareholders, through the solicitation of
proxies or otherwise during the period covered by this report.


                                    PART II

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER
        MATTERS
The Registrant's shares are not publicly traded. There is no established
public trading market for the Shares of Beneficial Interest of the Trust and it
is unlikely that any will develop. The Trust Advisor will resist the development
of a public market for the shares.

                                                          Number of Shares of
                            Number of Shareholders        Beneficial Interest
     Title of Class            at March 1, 2001             at March 1, 2001
     -----------------------------------------------------------------------
     Shares of Beneficial
     Interest                        877                          10,541

The Trust accrued an underwriting return based on 10% simple annual interest
computed on a daily basis from the initial closing (August 30, 1995) until June
21, 1997, the final closing. Shareholders were paid $250,000 in July 1996 and
$493,897 in July 1997, leaving $522,791 of the underwriting return remaining to
be paid. There remains to be paid $3,610, which represents interest earned by
the Trust on the investor's funds held in escrow through the initial closing.
Since the final closing, a priority return at 8% simple interest has been
accrued. The earned priority return amounted to $445,899 in 1997, $843,280 in
1998, $843,279 in 1999, and $845,590 in 2000. Priority return distributions were
$153,611 in 1997, $569,029 in 1998, $486,550 in 1999, and $0 in 2000. Priority
return distributions payable at December 31 of each year were $292,288,
$566,539, $923,268, and $1,768,858 for 1997, 1998, 1999, and 2000, respectively.

The Trust intends to make quarterly distributions of all cash revenues to the
extent it has cash available for such distributions. These distributions must be
approved by a majority of the Independent Trustees and made within sixty days of
the end of each quarter. The Trustees declared no distributions during 2000.
Distributions from the Trust's wholly-owned subsidiary, Berthel SBIC, LLC, to
the Trust are restricted under SBA regulations. Under SBA regulations, the SBIC
subsidiary is not able to distribute income to the parent unless it has
"earnings available for distribution" as defined by the SBA. At December 31,
2000, the SBIC had a deficit of "earnings available for distribution" in the
amount of $2,698,943.


                                       4
<PAGE>   5

ITEM 6.  SELECTED FINANCIAL DATA

<TABLE>
<CAPTION>

                                                                Year Ended December 31
                                       -------------------------------------------------------------------------
                                          2000            1999            1998           1997            1996
----------------------------------------------------------------------------------------------------------------
<S>                                  <C>             <C>             <C>            <C>             <C>
Total assets                         $ 13,692,384    $ 13,316,795    $ 12,381,442   $   7,461,953   $  6,543,075
Debentures payable                      9,500,000       5,550,000               0               0              0
Net increase (decrease) in
 net assets resulting
 from operations                       (3,773,281)     (4,229,880)      5,444,032         167,229       (879,654)
Unrealized gain (loss)
 on investments                        (3,483,551)     (2,195,298)      5,255,928               0     (1,000,000)
Realized (loss) on investments                  0      (1,930,000)              0               0              0
Net operational increase
 (decrease) in net assets
 per beneficial share                     (357.96)        (401.28)         516.46           16.70        (122.07)
Distributions per beneficial share              0           46.16           53.98           64.67          34.69
</TABLE>

The above selected data should be read in conjunction with the consolidated
financial statements and related notes appearing elsewhere in this report. As
discussed in the financial statements, during 1999 the Trust adopted Statement
of Position 98-5, "Reporting on the Costs of Start-up Activities", which
resulted in a cumulative effect of a change in accounting principle of $33,817.


ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

RESULTS OF OPERATIONS
Net investment income (loss) reflects the Trust's revenues and expenses
excluding realized and unrealized gains and losses on portfolio investments.
Interest income for the past three years is summarized as follows:

                          2000        1999       1998
                          ----        ----       ----
Portfolio investments   $796,285   $502,817   $387,843
Money market              17,694     55,634    196,712
                        --------   --------   --------
                        $813,979   $558,451   $584,555
                        ========   ========   ========

Changes in interest earned on portfolio investments reflect the level of
investment in interest earning debt securities and loans. Money market interest
reflects cash resources that are invested in highly liquid money market savings
funds. Money market interest declined in 1999 and 2000, reflecting uses of cash
to purchase new investments and finance operations.

Dividend income increased from $73,318 in 1999 to $247,000 in 2000, reflecting
dividends earned on preferred stock investments. Prior to 1999 the Trust held no
investments in dividend-paying equity securities.

Management fees, calculated as 2.5% of the combined temporary investment in
money market securities and loans and investments balances, have increased from
$318,357 in 1999 to $404,960 in 2000 due to increases in these assets.
Management fees are paid quarterly to the Trust Advisor, in accordance with the
management agreement.

Trustee fees were $34,000 in 2000, $39,000 in 1999, and $36,000 in 1998. As
compensation for services rendered to the Trust, each Independent Trustee is
paid $1,000 per month plus $1,000 per board meeting attended, up to a maximum of
$24,000 in meeting fees per year.


                                       5
<PAGE>   6

Professional fees were $65,663 in 2000, $167,406 in 1999, and $97,614 in 1998,
and include legal and accounting expenses. A major component of legal fees in
1999 are amounts paid to pursue recovery of the Trust's investment in Soil
Recovery Services ("SRS"). These costs were $82,960 in 1999 and $52,553 in 1998.
The attempts at recovery of the SRS loss terminated in 1999. Accounting and
auditing fees increased due to the increase in investment activity and were
$60,360, $45,200, and $26,470 for the years 2000, 1999, and 1998, respectively.

Interest expense was first incurred by the Trust in 1999 when it issued
debentures payable to the SBA through its wholly owned subsidiary-Berthel SBIC,
LLC. Through December 31, 2000, the Trust has issued debentures totalling
$9,500,000 ("Debentures"). The Debentures require the semiannual payment of
interest at annual interest rates ranging from 7.22% to 7.64%. In addition to
interest payments, the Trust is required to pay an annual 1% SBA loan fee on the
outstanding Debentures balance. The Debentures contain certain pre-payment
penalties and are subject to all of the regulations promulgated under the Small
Business Investment Act of 1958, as amended. Prepayment penalties are not
applicable within five years of maturity. As of December 31, 2000, the Trust was
in violation of the maximum capital impairment percentage permitted by the SBA
and has not obtained a waiver from the SBA. The remedies available to the SBA
include prohibiting the SBIC from making any additional investments other than
investments under existing legally binding commitments, prohibiting
distributions to investors, reviewing and redetermining management expenses, and
declaring the Debentures immediately due and payable. Debentures totalling
$1,000,000, $6,575,000, $725,000, and $1,200,000, are to be paid in full in
September, 2009, March, 2010, September, 2010, and March, 2011, respectively.

The changes in unrealized gains and losses and the realized gains and losses on
investments recognized during the previous three years are summarized in the
following table:

<TABLE>
<CAPTION>
CHANGE IN UNREALIZED GAINS (LOSSES):
                                                 2000                1999             1998
                                                 ----                ----             ----
<S>                                           <C>                <C>                <C>
Soil Recovery System, Inc.                    $         0        $ 1,000,000        $        0
McLeodUSA, Inc.                                  (165,506)                 0                 0
LIVEware5, Inc.                                   297,750                  0          (297,750)
Object Space, Inc.                               (200,000)                 0            (4,800)
Physicians Total Care, Inc.                      (411,795)                 0                 0
Bristol Retail Solutions                          (28,644)                 0                 0
Chequemate International                          274,359                  0                 0
Easy Systems, Inc.                               (977,422)                 0                 0
Kinseth Hospitality Co., Inc.                           0         (2,750,000)        2,750,000
VisionComm, Inc.                               (1,450,000)        (1,358,478)        2,808,478
iBEAM Broadcasting Corporation                     90,887                  0                 0
Webcasts.com, Inc.                               (913,180)           913,180                 0
                                              -----------        -----------        ----------
                                              $(3,483,551)       $(2,195,298)       $5,255,928
                                              ===========        ===========        ==========

REALIZED LOSSES:
                                                 2000                1999             1998
                                                 ----                ----             ----
Soil Recovery Systems, Inc.                   $         0        $(1,000,000)     $          0
SunStar Healthcare, Inc.                                0           (930,000)                0
                                              -----------        -----------        ----------
                                              $         0        $(1,930,000)     $          0
                                              ===========        ===========        ==========
</TABLE>


                                       6
<PAGE>   7

The unrealized loss on Soil Recovery Systems, Inc. was initially recognized in
1996. Following three years of efforts to recover the loss through litigation
and claims on SRS's bankruptcy process, it was determined in 1999 that the loss
should be recognized as realized. Other unrealized gains and losses are a result
of valuing each portfolio security at fair value. None of the Trust's
investments are readily marketable; therefore, securities are initially stated
at cost until a significant event or trend in operations requires a change in
valuation. The decreases in valuation in 1999 of warrants to purchase common
stock, issued by Kinseth Hospitality Company, Inc. and VisionComm, Inc. reflect
the Trustees' view of current operations and prospects for the future as
compared to year-end December 31, 1998. The unrealized appreciation of warrants
to purchase Webcasts.com common stock reflects a recent external transaction.

The realized loss on SunStar Healthcare, Inc., an investment purchased during
1999, was a result of action taken by the Florida Department of Insurance to
place SunStar into receivership. This action followed litigation over SunStar's
calculation of loss reserves and capitalization. The Trust will prudently pursue
recovery efforts, but at this time any recovery appears to be highly unlikely.

During the year 2000, several investment valuations were adjusted as unrealized
losses to reflect valuations based upon the portfolio company's financial
condition and expected future operating results. These adjustments include
reductions in the value of Object Space, Inc., Physicians Total Care, Inc., Easy
Systems, Inc., and VisionComm, Inc.

The investment in LIVEware5, Inc., which was acquired by McLeodUSA, Inc., was
exchanged for McLeod's common stock, allowing the Trust to reverse previous
unrealized losses. Subsequent to the LIVEware5-McLeod transaction, the value of
McLeod common stock, a publicly traded security, decreased, resulting in an
unrealized loss. Warrants to purchase shares of Bristol Retail Solutions common
stock declined reflecting the market for Bristol's common stock, which is
publicly traded.

Chequemate International, Inc. acquired the Trust's equity position in
VisionComm on December 30, 2000 in exchange for Chequemate common stock, a note
receivable, and warrants. The unrealized gain represents the estimated valuation
of Chequemate in excess of the carrying value of VisionComm.

Webcasts.com, Inc. was acquired by iBEAM Broadcasting Corporation in April,
2000, and the unrealized loss represents a reversal of the unrealized gain
recorded for Webcasts during 1999. The unrealized gain recorded for the
investment in iBEAM reflects the value of the publicly traded iBEAM stock in
excess of the original cost of the investments in Webcasts.

INVESTMENT ACTIVITY
The Trust's investment objective is to provide capital appreciation and current
income by investing in debt, preferred stock, and related equity securities
issued by small and medium sized companies.

The Trust's new investments for the past three years are summarized by type of
investment as follows:


                                       7
<PAGE>   8

                                   2000               1999             1998
                                   ----               ----             ----

Debt securities & loans         $ 2,646,115       $ 2,907,860       $   600,000
Preferred stock                   1,043,538         3,331,212           404,800
Common stocks and warrants        1,057,785         1,300,000                 0
                                -----------       -----------       -----------
                                $ 4,747,438       $ 7,539,072       $ 1,004,800
                                ===========       ===========       ===========

During 2000, two portfolio companies repaid debt totalling $509,120. During
1999, one portfolio company totally repaid its debt to the Trust in the amount
of $700,000.

INVESTMENT PORTFOLIO
The investment objective of the Trust is to provide capital appreciation
potential and current income by investing primarily in subordinated debt,
preferred stock and related equity securities issued by small and medium sized
companies that are in need of capital and that the Trust Advisor believes offer
the opportunity for growth or appreciation of equity value while being able, if
required to do so, to service current yield bearing securities. The Trust,
through its Trust Advisor, directs its investment efforts to small and medium
sized companies which, in the view of the Trust Advisor, provides opportunities
for significant capital appreciation and prudent diversification of risk. The
Trust seeks investments in a variety of companies and industries. The securities
of portfolio companies purchased by the Trust typically will be rated below
investment grade, and more frequently, not rated at all. The securities of such
portfolio companies will often have significant speculative characteristics. The
Trust's investments at December 31, 2000, 1999, and 1998 are summarized by type
of investment in the table below. The securities that were recognized as
realized losses in 1999, Soil Recovery Systems, Inc. and SunStar Healthcare,
Inc., are not included in the 1999 table.

                                        December 31, 2000
                                        -----------------
                                        Cost       Fair Value
                                        ----       ----------
Debt securities and loans           $ 7,290,598   $ 6,386,784
Preferred stocks                      3,349,549     2,844,750
Warrants to purchase common stock       435,685       407,041
Common stocks                         2,907,039     2,921,376
                                    -----------   -----------
                                    $13,982,871   $12,559,951
                                    ===========   ===========

                                        December 31, 1999
                                        -----------------
                                        Cost       Fair Value
                                        ----       ----------
Debt securities and loans           $ 5,307,860   $ 5,307,860
Preferred stocks                      2,806,012     2,801,212
Warrants to purchase common stock             0     2,363,180
Common stocks                         1,600,000     1,302,250
                                    -----------   -----------
                                    $ 9,713,872   $11,774,502
                                    ===========   ===========

                                        December 31, 1998
                                        -----------------
                                        Cost       Fair Value
                                        ----       ----------
Debt securities and loans           $ 4,100,000   $ 3,100,000
Preferred stocks                        404,800       400,000
Warrants to purchase common stock             0     5,558,478
Common stocks                           300,000         2,250
                                    -----------   -----------
                                    $ 4,804,800   $ 9,060,728
                                    ===========   ===========


                                       8
<PAGE>   9

Whenever possible, the Trust will negotiate enhancements to the securities
purchased in the form of warrants to purchase shares of common stock in
portfolio companies, options to force redemption of securities by portfolio
companies ("Put Options"), and registration rights should a portfolio company
begin to offer its shares in the public market. Agreements with portfolio
companies may also include restrictive covenants that contribute to sound
management practices at portfolio companies. Regardless of terms that the Trust
is able to achieve with any portfolio company, there is no assurance that any
investment made by the Trust will be repaid or redeemed at a profit; and there
is risk of total loss of any investment made by the Trust.

The difference between cost and fair value of the investments represents
accumulated unrealized gains and losses. Accumulated unrealized gains and losses
are reflected in the Statements of Assets and Liabilities. Changes in
accumulated unrealized gains and losses are reflected in the Statements of
Operations.

SUBSEQUENT ACTIVITIES
The Trust has committed to invest an additional $200,000 in Pickermans
Development Company in exchange for a 12% promissory note and warrants, which
was subsequently funded during January through March 2001.

During February 2001, the Trust entered into an agreement with Kinseth
Hospitality Company, Inc. ("Kinseth"), in which the Trust agreed to release its
warrants to purchase 25% of Kinseth common shares at $.01 per share, in exchange
for a lenders commitment to refinance the existing mortgage on certain Kinseth
property. The lenders commitment must be received no later than April 12, 2001.
The proceeds received from the lenders commitment must be used to pay off the
outstanding debt and accrued interest to the Trust by June 30, 2001.

SECURITIES AND EXCHANGE COMMISSION FILINGS
On June 14, 1996, the Trust filed, with the Securities and Exchange Commission,
a Cumulative Supplement No. 2 ("Sup. 2") to the prospectus dated June 21, 1995.
Sup. 2 provides for the renewal of registration and extension of the offering
period to June 21, 1997.

In addition to the extension of the offering period, the purpose of Sup. 2 was
to: a) report the status of the offering; b) provide information on the status
of investments in portfolio companies through May 31, 1996; c) provide a
description of additional information regarding the Trust and the Offering; and
d) report the financial statements of the Trust and the Trust Advisor.

FORMATION OF AN SBIC
On May 4, 1998, Berthel SBIC, LLC (the "SBIC"), a wholly owned subsidiary of the
Trust within the meaning of Section 2(a)(43) of the Investment Company Act of
1940, received a license to operate as a Small Business Investment Company from
the Small Business Administration ("SBA"). The SBIC was formed in 1997. The
Trust funded the SBIC with a capital contribution of $5,000,000, the minimum
amount eligible to be contributed in order to receive leverage under the SBA
Small Business Investment Company program.


                                       9
<PAGE>   10

<TABLE>
<CAPTION>
Liquidity and Capital Resources
                                                        Years Ending December 31
                                              -------------------------------------------
                                                 2000                1999            1998
                                                 ----                ----            ----
<S>                                           <C>                <C>                <C>
Major Cash Sources (Uses):
     Issuance of debentures                   $ 3,950,000        $ 5,550,000      $       ---
     Deferred financing costs incurred            (98,751)          (238,750)             ---
     Distributions                                    ---           (486,550)         (569,029)
     Changes in loans and investments          (4,238,317)        (6,839,072)       (1,004,800)
</TABLE>

Cash and temporary cash investments amounted to $684,244, $1,137,535, and
$3,219,116 as of December 31, 2000, 1999, and 1998, respectively. The net
investing activities reflect the investments the Trust has made less repayments
of notes receivable of $509,120 in 2000 and $700,000 in 1999. Net cash from
operating activities was a net use of cash of $4,291,016 in 2000 compared to a
net use of cash of $3,732,523 in 1999. This decrease in cash flow is due to the
net change in loans and investments in 2000 of $4,238,317.

Prior to 1999, the principal sources of liquidity and capital were the proceeds
of sales of beneficial shares of the Trust combined with the results of
investment operations. During 1999, the SBIC received commitments for SBA
Leverage in the form of debentures in the amount of $10,000,000. The Trust paid
a 1% commitment fee of $100,000 and leverage and underwriting fees totalling
$138,750, which represent 2.5% of the debentures issued during 1999 and leverage
and underwriting fees totalling $98,750 in 2000. As of December 31, 2000, unused
SBA leverage commitments amounted to $500,000. Each draw against SBA commitments
is conditional upon the SBIC's credit worthiness and compliance with specific
regulations, as determined by the SBA. The SBA may also limit the amounts that
may be drawn each year.

The Trust intends to make quarterly distributions of all cash revenues to the
extent it has cash available for such distributions. The Independent Trustees
must approve distributions. The Trustees declared no distributions during 2000.
Distributions from the Trust's wholly-owned subsidiary, Berthel SBIC, LLC, to
the Trust are restricted under SBA regulations. Under SBA regulations, the SBIC
subsidiary is not able to distribute income to the parent unless it has
"earnings available for distribution" as defined by the SBA. At December 31,
2000, the SBIC had a deficit of "earnings available for distribution" in the
amount of $2,698,943.

Regardless of the ability to make current distributions in cash, the Trust has
accrued an 8% priority return to beneficial owners of the Trust since June 1997.
A 10% underwriting return was accrued through the final closing of the offering
on June 21, 1997. Accrued underwriting and priority returns amounted to
$2,295,259, $1,449,669, and $1,092,940 as of December 31, 2000, 1999, and 1998,
respectively. Distributions paid to beneficial owners of the Trust amounted to
$0, $486,550, and $569,029 during the years 2000, 1999, and 1998, respectively.

The Trust plans to fund future operations with dividends and interest income on
portfolio investments and sale of certain investments. The Trust anticipates
that cash flow from these sources will be sufficient meet its operating needs
for at least the next twelve months.

The effect of interest rate fluctuations and inflation on the current Trust
investments is negligible.


                                       10
<PAGE>   11

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
The Trust's investment objective is to achieve capital appreciation in the value
of its net assets and to achieve current income principally by making
investments through private placements in securities of small and medium sized
privately and publicly owned companies. Securities consist of subordinated debt,
preferred stock, or common stock combined with equity participation in common
stock or rights to acquire common stock. Securities held for investment at
December 31, 2000 are not held for trading purposes.

The primary risk of the portfolio is derived from the underlying ability of
investee companies to satisfy debt obligations and their ability to maintain or
improve common equity values. Levels of interest rates are not expected to
impact the Trust's valuations, but could impact the capability of investee
companies to repay debt or create and maintain shareholder value.

As of December 31, 2000, the portfolio is valued at fair value, as determined by
the Independent Trustees ("Trustees"). In determining fair value for securities
and warrants, investments are initially stated at cost until significant
subsequent events and operating trends require a change in valuation. Among the
factors considered by the Trustees in determining fair value of investments are
the cost of the investment, terms and liquidity of warrants, developments since
the acquisition of the investment, the sales price of recently issued
securities, the financial condition and operating results of the issuer,
earnings trends and consistency of operating cash flows, the long-term business
potential of the issuer, the quoted market price of securities with similar
quality and yield that are publicly traded and other factors generally pertinent
to the valuation of investments. The Trustees rely on financial data of the
portfolio companies provided by the management of the portfolio companies.

The Trust Advisor maintains ongoing contact with management of the portfolio
companies including participation on their Boards of Directors and review of
financial information.

There is no assurance that any investment made by the Trust will be repaid or
re-marketed. Accordingly, there is a risk of total loss of any investment made
by the Trust. At December 31, 2000, the amount at risk was $12,559,951. The
portfolio consisted of the following at December 31, 2000:

                                        Cost       Fair Value
                                        ----       ----------
Debt securities and loans           $ 7,290,598   $ 6,386,784
Preferred stocks                      3,349,549     2,844,750
Warrants to purchase common stock       435,685       407,041
Common stocks                         2,907,039     2,921,376
                                    -----------   -----------
                                    $13,982,871   $12,559,951
                                    ===========   ===========


                                       11
<PAGE>   12


ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The following financial statements and related information as of the years ended
December 31, 2000, 1999 and 1998 are included in Item 8:

                                                          Page No.
                                                          --------
Independent Auditors' Report                                13
Consolidated Statements of Assets and Liabilities           14
Consolidated Statements of Operations                       15
Consolidated Statements of Changes in Net Assets            17
Consolidated Statements of Cash Flows                       18
Notes to Consolidated Financial Statements                  19
















                                       12
<PAGE>   13
INDEPENDENT AUDITORS' REPORT


To the Independent Trustees and Shareholders of
Berthel Growth & Income Trust I

We have audited the accompanying consolidated statements of assets and
liabilities of Berthel Growth & Income Trust I and subsidiary (the "Trust") as
of December 31, 2000 and 1999, and the related consolidated statements of
operations, changes in net assets, and cash flows for each of the three years in
the period ended December 31, 2000. These financial statements are the
responsibility of the Trust's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. 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 consolidated financial statements present fairly, in all
material respects, the financial position of the Trust at December 31, 2000 and
1999, and the results of their operations and their cash flows for each of the
three years in the period ended December 31, 2000 in conformity with accounting
principles generally accepted in the United States of America.

As discussed in Note 1 to the consolidated financial statements, loans and
investment securities not readily marketable amounting to $12,559,951 as of
December 31, 2000 have been valued at fair value, as determined by the
Independent Trustees ("Trustees"). We have reviewed the procedures applied by
the Trustees in valuing such investments and have inspected underlying
documentation and, in the circumstances, we believe that the procedures are
reasonable and the documentation appropriate. However, because of the inherent
uncertainty of valuation, the Trustees' estimates of fair values may differ
significantly from the values that would have been used had a ready market
existed for the investments, and the differences could be material.


/s/ Deloitte & Touche LLP


Cedar Rapids, Iowa
March 13, 2001


                                       13
<PAGE>   14

BERTHEL GROWTH & INCOME TRUST I


<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES
DECEMBER 31, 2000 AND 1999
------------------------------------------------------------------------------------------------

                                                                       2000            1999
<S>                                                                <C>              <C>
ASSETS:

  Loans and investments (Notes 2, 4, 7 and 9)                      $ 12,559,951    $ 11,774,502
  Cash                                                                  684,073       1,123,840
  Temporary investment in money market securities                           171          13,695
  Interest and dividends receivable, net of allowance for
    doubtful accounts of $48,868 in 2000 and $0 in 1999 (Note 2)        156,119         168,348
  Deferred financing costs                                              284,780         226,042
  Other receivables                                                       7,290          10,368
                                                                   ------------    ------------
           Total assets                                              13,692,384      13,316,795
                                                                   ------------    ------------

LIABILITIES:

  Accrued interest payable                                              257,385          73,273
  Accounts payable and other accrued expenses                            39,207          59,332
  Due to affiliate (Notes 3 and 4)                                      105,024          88,121
  Deferred income                                                        29,647          11,667
  Distributions payable to shareholders (Note 5)                      2,295,259       1,449,669
  Debentures (Note 6)                                                 9,500,000       5,550,000
                                                                   ------------    ------------
           Total liabilities                                         12,226,522       7,232,062
                                                                   ------------    ------------

COMMITMENTS AND CONTINGENCIES (Note 7)

NET ASSETS (equivalent to $139.06 per share in 2000,
  and $577.24 per share in 1999)                                   $  1,465,862    $  6,084,733
                                                                   ------------    ------------

Net assets consist of:
  Shares of beneficial interest, net of syndication costs
    of $1,507,237, 25,000 shares authorized - 10,541 shares
    issued and outstanding in 2000 and 1999                        $  4,818,783    $  5,954,103
  Accumulated net realized losses                                    (1,930,000)     (1,930,000)
  Accumulated net unrealized gains (losses)                          (1,422,921)      2,060,630
                                                                   ------------    ------------
                                                                   $  1,465,862    $  6,084,733
                                                                   ============    ============
</TABLE>


See notes to consolidated financial statements.



                                      -14-

<PAGE>   15

BERTHEL GROWTH & INCOME TRUST I

<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998
-------------------------------------------------------------------------------------------

                                                     2000            1999         1998
<S>                                              <C>            <C>            <C>
REVENUES:
  Interest income                                $   813,979    $   558,451    $   584,555
  Dividend income                                    247,000         73,318           --
  Application, closing and other fees                 13,354          4,000         15,502
                                                 -----------    -----------    -----------
           Total revenues                          1,074,333        635,769        600,057
                                                 -----------    -----------    -----------

EXPENSES:
  Management fees (Note 4)                           404,960        318,357        194,820
  Administrative services (Note 4)                    38,400         38,400         39,016
  Trustee fees                                        34,000         39,000         36,000
  Professional fees                                   65,663        167,406         97,614
  Interest expense (Notes 3 and 6)                   683,479         98,001           --
  Other general and administrative expenses          137,561         79,187         44,503
                                                 -----------    -----------    -----------
           Total expenses                          1,364,063        740,351        411,953
                                                 -----------    -----------    -----------

NET INVESTMENT INCOME (LOSS)                        (289,730)      (104,582)       188,104
                                                 -----------    -----------    -----------

UNREALIZED GAIN (LOSS) ON INVESTMENTS (Note 2)    (3,483,551)    (2,195,298)     5,255,928

REALIZED LOSS ON INVESTMENTS (Note 2)                   --       (1,930,000)          --
                                                 -----------    -----------    -----------

NET GAIN (LOSS) ON INVESTMENTS                    (3,483,551)    (4,125,298)     5,255,928
                                                 -----------    -----------    -----------

NET INCREASE (DECREASE) IN NET ASSETS
  RESULTING FROM OPERATIONS                       (3,773,281)    (4,229,880)     5,444,032

CUMULATIVE EFFECT OF A CHANGE IN
  ACCOUNTING PRINCIPLE                                  --          (33,817)          --
                                                 -----------    -----------    -----------

NET INCREASE (DECREASE) IN NET ASSETS            $(3,773,281)   $(4,263,697)   $ 5,444,032
                                                 ===========    ===========    ===========
</TABLE>


See notes to consolidated financial statements.                      (Continued)



                                      -15-
<PAGE>   16


BERTHEL GROWTH & INCOME TRUST I


<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF OPERATIONS (CONCLUDED)
FOR THE YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998
----------------------------------------------------------------------------------------------------------------------------------

                                                      2000             1999             1998
<S>                                             <C>              <C>              <C>
PER BENEFICIAL SHARE DATA:
  Investment income                             $      101.92    $       60.31    $       56.92
  Expenses                                            (129.40)          (70.24)          (39.08)
                                                -------------    -------------    -------------

NET INVESTMENT INCOME (LOSS)                           (27.48)           (9.93)           17.84
                                                -------------    -------------    -------------

UNREALIZED GAIN (LOSS) ON INVESTMENTS                 (330.48)         (208.26)          498.62

REALIZED LOSS ON INVESTMENTS                             --            (183.09)            --
                                                -------------    -------------    -------------

NET GAIN (LOSS) ON INVESTMENTS                        (330.48)         (391.35)          498.62
                                                -------------    -------------    -------------

NET OPERATIONAL INCREASE (DECREASE)
  IN NET ASSETS                                       (357.96)         (401.28)          516.46
CUMULATIVE EFFECT OF A CHANGE IN
  ACCOUNTING PRINCIPLE                                   --              (3.21)            --
                                                -------------    -------------    -------------
NET INCREASE  (DECREASE) IN NET ASSETS          $     (357.96)   $     (404.49)   $      516.46
                                                -------------    -------------    -------------
WEIGHTED AVERAGE SHARES                                10,541           10,541           10,541
                                                =============    =============    =============

PRO FORMA AMOUNTS APPLYING THE
  METHODOLOGY OF ORGANIZATION COSTS
  RETROACTIVELY:
    Net increase (decrease) in net assets       $  (3,773,281)   $  (4,229,880)   $   5,446,692
    Net increase (decrease) in net assets per
    beneficial share                            $     (357.96)   $     (401.28)   $      516.72

</TABLE>

See notes to consolidated financial statements.


                                      -16-
<PAGE>   17
BERTHEL GROWTH & INCOME TRUST I

<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998
--------------------------------------------------------------------------------------


                                        SHARES OF BENEFICIAL INTEREST      UNDISTRIBUTED
                                       -------------------------------     NET INVESTMENT
                                            SHARES            AMOUNT       INCOME (LOSS)
<S>                                       <C>             <C>             <C>
BALANCE AT JANUARY 1, 1998                   10,541       $  7,590,958      $        --
Net investment income                            --                 --          188,104
Unrealized gain on investments                   --                 --               --
Distributions to shareholders
   ($53.98 per beneficial share)                 --           (380,925)        (188,104)
Distributions payable to shareholders
($26.02 per beneficial share)                    --           (274,251)              --
                                       ------------       ------------      -----------
BALANCE AT DECEMBER 31, 1998                 10,541          6,935,782               --
Net investment loss                              --           (104,582)              --
Cumulative Effect of a Change in
  Accounting Principle                           --            (33,817)              --
Unrealized loss on investments                   --                 --               --
Realized loss on investments                     --                 --               --
Distributions to shareholders
  ($46.16 per beneficial share)                  --           (486,550)              --
Distributions payable to shareholders
  ($33.84 per beneficial share)                  --           (356,730)              --
                                       ------------       ------------      -----------
BALANCE AT DECEMBER 31, 1999                 10,541          5,954,103               --
Net investment loss                              --           (289,730)              --
Unrealized loss on investments                   --                 --               --
Distributions payable to shareholders            --
  ($80.22 per beneficial share)                  --           (845,590)              --
                                       ------------       ------------      -----------
BALANCE AT DECEMBER 31, 2000                 10,541       $  4,818,783      $        --
                                       ============       ============      ===========

<CAPTION>
                                        ACCUMULATED         ACCUMULATED
                                       NET REALIZED       NET UNREALIZED      TOTAL NET
                                          LOSSES          GAINS (LOSSES)       ASSETS

<S>                                     <C>               <C>               <C>
BALANCE AT JANUARY 1, 1998              $       --        $ (1,000,000)     $ 6,590,958
Net investment income                           --                  --          188,104
Unrealized gain on investments                  --           5,255,928        5,255,928
Distributions to shareholders
   ($53.98 per beneficial share)                --                  --         (569,029)
Distributions payable to shareholders
   ($26.02 per beneficial share)                --                  --         (274,251)
                                        ----------        ------------      -----------
BALANCE AT DECEMBER 31, 1998                    --           4,255,928       11,191,710
Net investment loss                             --                  --         (104,582)
Cumulative Effect of a Change in
  Accounting Principle                          --                  --          (33,817)
Unrealized loss on investments                  --          (2,195,298)      (2,195,298)
Realized loss on investments            (1,930,000)                 --       (1,930,000)
Distributions to shareholders
  ($46.16 per beneficial share)                 --                  --         (486,550)
Distributions payable to shareholders
  ($33.84 per beneficial share)                 --                  --         (356,730)
                                        ----------        ------------      -----------
BALANCE AT DECEMBER 31, 1999            (1,930,000)          2,060,630        6,084,733
Net investment loss                             --                  --         (289,730)
Unrealized loss on investments                  --          (3,483,551)      (3,483,551)
Distributions payable to shareholders
  ($80.22 per beneficial share)                 --                  --         (845,590)
                                       -----------        ------------      -----------
BALANCE AT DECEMBER 31, 2000           $(1,930,000)       $ (1,422,921)     $ 1,465,862
                                       ===========        ============      ===========
</TABLE>




See notes to consolidated financial statements.


                                      -17-
<PAGE>   18

BERTHEL GROWTH & INCOME TRUST I

CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                     2000           1999           1998
CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                             <C>            <C>            <C>
  Net increase (decrease) in net assets                         $(3,773,281)   $(4,263,697)   $ 5,444,032
  Adjustments to reconcile net increase (decrease) in net
      assets to net cash flows from operating activities:
    Amortization of deferred financing costs                         41,095         12,708             --
    Accretion of discount on debt securities                        (30,683)            --             --
    Amortization of organizational costs                                 --             --          3,660
    Provision for losses on interest and dividends receivable        48,868             --             --
    Unrealized (gain) loss on investments                         3,483,551      2,195,298     (5,255,928)
    Realized loss on investments                                         --      1,930,000             --
    Cumulative effect of a change in accounting principle                --         33,817             --
    Changes in operating assets and liabilities:
       Loans and investments                                     (4,238,317)    (6,839,072)    (1,004,800)
       Temporary investment in money market securities               13,524      3,173,758      1,400,145
       Interest and dividends receivable                            (36,639)      (132,966)       (29,549)
       Deferred financing costs                                      (1,082)            --             --
       Other receivables                                              3,078         22,031        (16,401)
       Accrued interest payable                                     184,112         73,273             --
       Accounts payable and other accrued expenses                  (20,125)        35,766        (11,277)
       Due to affiliate                                              16,903         16,561         55,763
       Deferred income                                               17,980         10,000             --
                                                                -----------    -----------    -----------
           Net cash flows from operating activities              (4,291,016)    (3,732,523)       585,645
                                                                -----------    -----------    -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Distribution payments to shareholders                                  --       (486,550)      (569,029)
  Deferred financing costs incurred                                 (98,751)      (238,750)            --
  Proceeds from issuance of debentures                            3,950,000      5,550,000             --
                                                                -----------    -----------    -----------
           Net cash flows from financing activities               3,851,249      4,824,700       (569,029)
                                                                -----------    -----------    -----------

NET INCREASE (DECREASE) IN CASH                                    (439,767)     1,092,177         16,616

CASH AT BEGINNING OF PERIOD                                       1,123,840         31,663         15,047
                                                                -----------    -----------    -----------

CASH AT END OF PERIOD                                           $   684,073    $ 1,123,840    $    31,663
                                                                ===========    ===========    ===========

SUPPLEMENTAL DISCLOSURE OF
  CASH FLOW INFORMATION:
  Cash paid for interest                                        $   499,367    $    18,128    $        --
  Noncash financing activities - Distributions payable
    to shareholders                                                 845,590        356,730        274,251
</TABLE>


See notes to consolidated financial statements.


                                       18
<PAGE>   19

BERTHEL GROWTH & INCOME TRUST I

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2000 AND 1999
-------------------------------------------------------------------------------


1.    ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

      BUSINESS- Berthel Growth & Income Trust I (the "Trust") is registered
      under the Investment Company Act of 1940, as amended, as a nondiversified,
      closed-end management investment company electing status as a business
      development company. The Trust was formed on February 10, 1995 under the
      laws of the State of Delaware and received approval from the Securities
      and Exchange Commission to begin offering shares of beneficial interest
      (the "Shares") effective June 21, 1995. The Trust's investment objective
      is to achieve capital appreciation in the value of its net assets and to
      achieve current income principally by making investments through private
      placements in securities of small and medium sized privately and publicly
      owned companies. Securities to be purchased will consist primarily of
      subordinated debt, common stock or preferred stock, combined with equity
      participation in common stock or rights to acquire common stock. The Trust
      offered a minimum of 1,500 Shares and a maximum of 50,000 Shares at an
      offering price of $1,000 per Share. The minimum offering of 1,500 Shares
      sold was reached on August 30, 1995. The offering period expired June 21,
      1997.

      The Trust will terminate upon the liquidation of all of its investments,
      but no later than June 21, 2007. However, the Independent Trustees (the
      "Trustees") have the right to extend the term of the Trust for up to two
      additional one-year periods if they determine that such extensions are in
      the best interest of the Trust and in the best interest of the
      shareholders, after which the Trust will liquidate any remaining
      investments as soon as practicable but in any event within three years.

      Berthel SBIC, LLC (the "SBIC"), a wholly owned subsidiary of the Trust
      within the meaning of Section 2(a)(43) of the Investment Company Act of
      1940, was formed during 1997 and received a license to operate as a Small
      Business Investment Company from the Small Business Administration ("SBA")
      on May 4, 1998. The Trust funded the SBIC with a capital contribution of
      $5,000,000, the minimum amount eligible to be contributed in order to
      receive leverage under the SBA Small Business Investment Company program.
      The Trustees also serve as the Independent Managers of the SBIC.

      Berthel Fisher & Company Planning, Inc. (the "Trust Advisor") is the
      Trust's investment advisor and manager. TJB Capital Management, Inc. (the
      "Corporate Trustee") provides certain management services necessary for
      the conduct of the Trust's business. Shares were offered by Berthel Fisher
      & Company Financial Services, Inc. (the "Dealer Manager"). Each of these
      three entities is a wholly or majority owned subsidiary of Berthel Fisher
      & Company.

      CONSOLIDATION - The consolidated financial statements include the accounts
      of the Trust and its wholly owned subsidiary. All significant intercompany
      balances and transactions have been eliminated in consolidation.

      USE OF ESTIMATES - The preparation of the Trust's consolidated financial
      statements in conformity with accounting principles generally accepted in
      the United States of America requires management to make estimates and
      assumptions that affect the reported amounts of assets and liabilities and
      disclosure of contingent assets and liabilities at the date of the
      financial statements and the reported amounts of revenues and expenses
      during the reporting period. Actual results could differ significantly
      from those estimates. Material estimates that are particularly susceptible
      to significant change in the near-term relate to the valuation by the
      Trustees of not readily marketable securities.


                                       19
<PAGE>   20

      TEMPORARY INVESTMENT IN MONEY MARKET SECURITIES - Pending investment in
      enhanced yield investments, the Trust has invested in money market
      securities, reported at market value, which approximates cost.

      LOANS AND INVESTMENTS - In accordance with accounting practices,
      investments that are not readily marketable are valued at fair value, as
      determined by the Trustees. The resulting difference between cost and
      market is included in the Consolidated Statements of Operations.

      In determining fair value for securities and warrants not readily
      marketable, investments are initially stated at cost until significant
      subsequent events and operating trends require a change in valuation.
      Among the factors considered by the Trustees in determining fair value of
      investments are the cost of the investment, terms and liquidity of
      warrants, developments since the acquisition of the investment, the sales
      price of recently issued securities, the financial condition and operating
      results of the issuer, earnings trends and consistency of operating cash
      flows, the long-term business potential of the issuer, the quoted market
      price of securities with similar quality and yield that are publicly
      traded and other factors generally pertinent to the valuation of
      investments. The Trustees, in making their evaluation, have relied on
      financial data of the portfolio companies provided by the management of
      the portfolio companies.

      DEFERRED FINANCING COSTS - Deferred financing costs primarily consist of a
      1% SBA commitment fee, which is amortized over the commitment period using
      the straight-line method, and a 2.5% SBA leverage and underwriting fee,
      which is amortized over the life of the loan using the straight-line
      method, which approximates the interest method. The straight-line method
      approximates the interest method and the relating amortization is reported
      as amortization expense.

      ORGANIZATIONAL COSTS - During the year ended December 31, 1998, costs of
      organizing the SBIC were being amortized over the life of the SBIC, eight
      years, beginning upon receipt of its license to operate as a Small
      Business Investment Company. In April 1998, the American Institute of
      Certified Public Accountants issued Statement of Position ("SOP") 98-5,
      "Reporting on the Costs of Start-Up Activities." SOP 98-5 provides
      guidance on the financial reporting of start-up costs and organization
      costs. SOP 98-5 requires the costs of start-up activities and organization
      costs to be expensed as incurred. This SOP is effective for financial
      statements for fiscal years beginning after December 15, 1998. This SOP
      required the SBIC to write-off organization costs totaling $33,817 and
      report the effect as a cumulative effect of a change in accounting
      principle during the year ended December 31, 1999.

      DEFERRED INCOME - Deferred income represents unearned closing fees
      received in connection with the purchase of debt portfolio securities and
      are amortized over the life of the debt security using the straight-line
      method, which approximates the interest method. The related amortization
      is reported as application, closing and other fees.

      NET INCOME (LOSS) PER BENEFICIAL SHARE - Net income (loss) per beneficial
      share is based on the weighted average number of shares outstanding.


                                       20
<PAGE>   21
2. LOANS AND INVESTMENTS

<TABLE>
<CAPTION>
COMPANY                                       SECURITY                               2000         1999
-------                                       --------                          -------------------------
<S>                                          <C>                                    <C>           <C>
COMMUNICATIONS AND SOFTWARE:

VisionComm. Inc                   *Warrants to purchase 889,153 common
---------------                    shares at $.8414 per share expiring
 Telecommunications and            April 2003 through April 2007 with put
 private cable television          options beginning December 2002 through
 industry (currently               May 2003 or upon the occurrence of a
 investment in Chequemate          specified event, $2,808,478 unrealized
 International, Inc.)              gain recognized during 1998 based on
                                   recent market transactions, $1,358,478
                                   unrealized loss incurred during 1999
                                   based on operating results, 1999 cost
                                   $0.
                                  During 2000, the Trust's investment
                                   was converted into an investment in
                                   Chequemate International, Inc. (see
                                   below)                                       $        --    $ 1,450,000


Chequemate International, Inc.    *371,823 shares of common stock, $92,956
-----------------------------      unrealized gain recognized during 2000
 Cable television & hotel          based on recent market transactions,
 programming industry (formerly    unrealized loss of $1,175,641 incurred
 investment in VisionComm, Inc.)   during 2000 based on market
                                   transactions, 2000 cost $0                        92,956             --
                                  *8% convertible note receivable,
                                   principal and interest due April 30,
                                   2002, $416,441 principal balance as of
                                   December 31, 2000, $181,403 unrealized
                                   gain recognized during 2000 based on
                                   operating results, 2000 cost $0                  181,403             --
                                  *Warrants to purchase 416,441 shares of
                                   common stock at $1 per share expiring
                                   April 2002, 2000 cost $0                              --             --

LIVEware5, Inc.                   *2,726,667 no par common shares and
---------------                    warrant to purchase 120,000 common
 Provider of distance based        shares at $.05 per share expiring during
 corporate education via           2007 with put options beginning December
 advanced teleconferencing         2003, the number of warrant shares may
 technologies and web-based        be reduced based upon the occurrence of
 provider of corporate and         certain events, shares reflect 1999 5:1
 institutional conferencing        reverse stock split, $297,750 unrealized
 and education (currently          loss incurred during 1998 based on
 investment in McLeod USA, Inc.)   recent market transaction, 1999 cost
                                   $400,000                                              --        102,250
                                  12% redeemable Series B Debentures due
                                   September 2004 with interest due beginning
                                   September 2000, 1999 cost $200,000                    --        200,000
                                  *Warrant to purchase 800,000 common
                                   shares at $4,000 expiring August 2009
                                   with put options beginning December 2003,
                                   1999 cost $0                                          --             --
                                  During 2000, the Trust's investment was
                                   converted into an investment in McLeod
                                   USA, Inc. (see below)

McLeod USA, Inc. LIVEware5, Inc.  *38,877 shares of common stock, $132,244
-------------------------------    unrealized gain recognized during 2000
 Telecommunications industry       due to market transactions, 2000 cost
 (formerly investment in           $610,000                                         444,494             --
 LIVEware5, Inc.)
</TABLE>


                                     21
<PAGE>   22

<TABLE>
<CAPTION>

                                                                                        VALUATION
COMPANY                                       SECURITY                               2000         1999
-------                                       --------                          -------------------------
<S>                               <C>                                             <C>            <C>
Object Space, Inc.                *108,108 shares of Series B Subordinated
-----------------                  Convertible Preferred Stock with put
  Provider of information          options beginning January 2003, $200,000
  technology services              unrealized loss incurred during 2000
  and software products            based on operating results, cost $404,799        200,000        400,000

EDmin.com, Inc.                   200,000 shares of 9% Cumulative
---------------                    Redeemable Convertible Series A Preferred
  Provider of internet-based       Stock, with call options beginning May
  software products, technology    2004, cost $728,000                              728,000        728,000
  planning and systems            *Warrant to purchase 20,000 common shares
  integration to educational       at $4 per share expiring December 2004,
  institutions                     cost $0                                               --             --

Cadapult Graphic Systems, Inc.    100,000 shares of 11.5% Series A
------------------------------     Cumulative Convertible Preferred Stock
  Provider of computer graphic     with call options, cost $930,000                 930,000        930,000
  systems, peripherals, supplies  *Warrant to purchase 333,000 (300,000 as
  and services to visual           of December 31, 1999) common shares at
  communicators and graphics       prices ranging from $3.125 to $4.50 per
  professionals                    share, expiring October 2004 through
                                   December 2004, 1999 cost $0                           --             --
                                  *Options to purchase 5,000 shares of
                                   common stock at $2.19 per share, expiring
                                   July 2010, 2000 cost $0                               --             --

Webcasts.com, Inc.                58,628 shares of 8% Cumulative Redeemable
------------------                 Series A Preferred Stock, 1999 cost
  Creates and delivers tools       $500,000                                              --        500,000
  and services enabling the        10% unsecured note due September 2000
  convergence of live video,       with warrant to purchase common shares,
  data and e-commerce              the number of which is contingent upon
  (Currently investment in         certain events, at $.01 per share,
  iBEAM Broadcasting               1999 cost $484,860                                    --        484,860
  Corporation)                    *Warrant to purchase 1,354,297 common
                                   shares at $1,155 expiring May 2009 with
                                   put options exercisable during June 2004
                                   through June 2006, $913,180 unrealized
                                   gain recognized during 1999 based on
                                   recent market transactions, 1999 cost $0              --        913,180
                                  During 2000, the Trust's investment was
                                   converted into an investment in iBEAM
                                   Broadcasting Corporation (see below)


iBEAM Broadcasting Corporation    *545,442 shares of common stock, $822,293
------------------------------     unrealized loss incurred during 2000 due
  Internet provider of             to market transactions, 2000 cost
  streaming media                  $486,372                                         577,259             --
  (formerly investment            10% $499,920 unsecured note repaid during
  in Webcast.com)                  2000                                                  --             --
                                                                                  ---------      ---------
TOTAL COMMUNICATIONS AND SOFTWARE (25.1% AND 48.5% OF TOTAL LOANS AND             3,154,112      5,708,290
INVESTMENTS AS OF DECEMBER 31, 2000 AND 1999, RESPECTIVELY)                       ---------      ---------

</TABLE>


                                     22
<PAGE>   23

<TABLE>
<CAPTION>

                                                                                        VALUATION
COMPANY                                       SECURITY                               2000         1999
-------                                       --------                          -------------------------
<S>                               <C>                                               <C>           <C>
HEALTHCARE PRODUCTS & SERVICES

Physicians Total Care, Inc.       *10% uncollateralized note due September
---------------------------        2004, interest payments beginning October
  Provider of prescription         2000, $57,795 deferred interest
  medication systems to            capitalized to the principal balance,
  physicians' offices for          $407,795 unrealized loss incurred during
  point-of-care dispensing         2000 based on operating results, 2000
  to patients                      cost $807,795, 1999 cost $500,000                400,000        500,000
                                  *Warrants to purchase 350,000 common
                                   shares at $.035 to $5 per share (upon the
                                   occurrence of a specified event, 210,000
                                   shares have an exercise price of $1 per
                                   share), expiring September 2006 with put
                                   options beginning October 2004 and
                                   terminating upon the occurrence of a
                                   specified event, cost $0                              --             --
                                  *700 shares of common stock, $4,000
                                   unrealized loss incurred during 2000
                                   based on operating results, 2000 cost
                                   $4,000                                                --             --
                                  *Options to purchase 5,000 shares of
                                   common stock at an exercise price of $4
                                   per share, expiring June 2001, 2000 cost
                                   $0                                                    --             --

SunStar HealthCare, Inc.          100,000 10% Convertible Redeemable Series
-----------------------            A Preferred Stock with warrants to
  Provider of managed healthcare   purchase 120,000 common shares at $4 to
  services in the State of         $5 per share expiring April 2004,
  Florida through its licensed     $930,000 realized loss incurred during
  HMO subsidiary, SunStar          1999, 1999 cost $930,000                              --             --
  Health Plan, Inc.

Inter-Med, Inc.                   *1,743.248 (1,340.96 as of December 31,
--------------                     1999) common shares with put options
  Manufacturer and importer        beginning May 2006 and call options
  of products for the U.S.         beginning May 2007, both expiring upon
  dental market                    the occurrence of a specified event, 2000
                                   cost $650,000, 1999 cost $500,000                650,000        500,000
                                  12% promissory note due July 2005, 2000
                                   cost $134,742                                    134,742             --
                                  *Warrants to purchase 561.0413 shares of
                                   common stock at $.01 per share expiring
                                   July 2010, 2000 cost $16,953                      16,953             --


Futuremed Interventional, Inc.    13.5% secured promissory note due February
------------------------------     2005, 2000 cost $914,467                         914,467            --
  Medical device manufacturer     *Warrants to purchase 383,111 shares of
                                   common stock at $.01 per share expiring
                                   February 2007 with put options beginning
                                   February 2005 or upon the occurrence of a
                                   specified event, 2000 cost $102,640              102,640             --
                                                                                  ---------      ---------


TOTAL HEALTHCARE PRODUCTS & SERVICES (17.7%  AND 8.5% OF TOTAL LOANS AND          2,218,802      1,000,000
INVESTMENTS AS OF DECEMBER 31, 2000 AND 1999, RESPECTIVELY)                       ---------      ---------

</TABLE>

                                     23

<PAGE>   24

<TABLE>
<CAPTION>

                                                                                        VALUATION
COMPANY                                       SECURITY                               2000         1999
-------                                       --------                          -------------------------
<S>                               <C>                                              <C>           <C>
MANUFACTURING

Hicklin Engineering, L.C.         10% secured subordinated note due June
-------------------------          2003, cost $400,000                              400,000        400,000
  Designs, manufactures and       *Warrant to purchase 6,857 membership
  distributes drive train          interests at $.01 per share expiring May
  component test equipment         2006 with options beginning June 2003,
  and dynometer systems            cost $0
                                   12% unsecured subordinated note,
                                   principal due January 2001 through
                                   December 2004, $9,200 repaid during 2000,
                                   2000 cost $13,800, 1999 cost $23,000              13,800         23,000

Easy Systems, Inc.                *11% unsecured subordinated debenture due
-----------------                  March 2004 with interest payments
  Provides control systems         beginning March 2000 and $77,422,
  and proprietary software         deferred interest capitalized to the
  primarily for the                principal balance during, 2000, $677,422
  agricultural industry            unrealized loss incurred during 2000
                                   based on operating results, 2000 cost
                                   $777,422, 1999 cost $700,000                     100,000        700,000
                                  *Warrants to purchase 531,393 (485,963 as
                                   of December 31, 1999) shares of common
                                   stock at $2.10 per share with put options
                                   beginning 2004 and expiring February 2009
                                   or earlier upon the occurrence of a
                                   specified event, cost $0                              --             --
                                  *142,857 (115,816 as of December 31,
                                   1999) shares of Series B Cumulative
                                   Redeemable Preferred Stock, $300,000
                                   unrealized loss incurred during 2000
                                   based on operating results, 2000 cost
                                   $300,000, 1999 cost $243,212                          --        243,212


The Schebler Company              13% subordinated note due March 2005,
--------------------               2000 cost $157,353                               157,353             --
  Manufacturer of                 *Warrants to purchase 1.66% of common
  industrial equipment             shares at $.01 per share, with put
                                   options beginning January 2007 and ending
                                   January 2022 or upon the occurrence of a
                                   specified event, 2000 cost $11,504                11,504             --
                                   166,666 shares of 10% convertible
                                   cumulative preferred stock, with put
                                   options beginning January 2007 and ending
                                   January 2022 or upon the occurrence of a
                                   specified event, 2000 cost $166,667              166,667             --
                                  *166,666 shares of common stock, with put
                                   options beginning January 2007 and ending
                                   January 2022 or upon the occurrence of a
                                   specified event, 2000 cost $166,667              166,667             --


Childs & Albert                   12.5% promissory note due October 2005,
---------------                    2000 cost $731,543                               731,543             --
   Racing engine component        Warrants to purchase 833.334 shares of
   manufacturer                    common stock at $10 per share expiring
                                   September 2010 with put and call options
                                   beginning September 2005 and ending
                                   September 2008, subject to the occurrence
                                   of specified events, 2000 cost $72,065            72,065             --
                                                                                  ---------      ---------

                                                                                  1,819,599      1,366,212
TOTAL MANUFACTURING (14.5% AND 11.6% OF TOTAL LOANS AND INVESTMENTS AS OF         ---------      ---------
DECEMBER 31, 2000 AND 1999, RESPECTIVELY)

</TABLE>

                                     24


<PAGE>   25
<TABLE>
<CAPTION>

                                                                                         VALUATION
COMPANY                                       SECURITY                                2000         1999
-------                                       --------                           -------------------------
<S>                                          <C>                                     <C>           <C>
OTHER SERVICE INDUSTRIES

Kinseth Hospitality Company, Inc.  14% secured note receivable due May 2003,
---------------------------------   cost $2,000,000                               2,000,000      2,000,000
  Hotel and restaurant             *Warrant to purchase 25% of common shares
  industries                        at $.01 per share expiring during 2002
                                    with put options beginning May 2003 or
                                    earlier if certain conditions are met and
                                    call options beginning 2004, $2,750,000
                                    unrealized loss incurred during 1999
                                    based on declining operating performance,
                                    $2,750,000 unrealized gain recognized
                                    during 1998 based on improved operating
                                    performance and upgraded operations, cost
                                    $0
                                                                                         --             --
ServeCore Business
Solutions, Inc.                   *3,663 (2,661 as of December 31, 1999)
-------------------                shares of common stock with put options
  Provider of copiers and          exercisable October 2004 through October
  ancillary equipment in the       2006 or upon the occurence of a specified
  commercial office market         event, 2000 cost $990,000, 1999 cost
                                   $700,000                                         990,000        700,000

International Pacific             12% subordinated note due June 2003
Seafoods, Inc.                     through June 2005, cost $1,000,000             1,000,000      1,000,000
---------------------             *Warrant to purchase 1,501 common shares
  Provider of seafood and          at $.76 per share expiring June 2006,
  supplemental products to         exercisable upon the occurrence of
  wholesale, retail and            certain events with put options
  food service industry            exercisable June 2005 through June 2006,
                                   cost $0                                               --             --

Pickerman's Development Company   12% promissory note due April 2005, 2000
-------------------------------     cost $218,383                                   218,383             --
Food-service franchise            *Warrants to purchase 1,043,294 shares of
  development company              common stock at $.01 per share expiring
                                   April 2010 through November 2010 with put
                                   options beginning April 2006 and call
                                   options beginning April 2005, both
                                   terminating upon the occurrence of a
                                   specified event, 2000 cost $52,606                52,606             --
                                  12% promissory note due November 2005,
                                   2000 cost $135,093                               135,093             --

Bristol Retail Solutions          500,000 shares of 12% Series C cumulative
------------------------           convertible preferred stock, with put
  Provider of retail               options beginning January 2005 and ending
  automation products and          January 2007 or upon the occurrence of a
  services                         specified event, 2000 cost $820,083
                                  *Warrants to purchase 464,979 shares of           820,083             --
                                   common stock at $.01 per share expiring
                                   January 2005, $28,644 unrealized loss
                                   incurred during 2000 due to recent market
                                   transactions, 2000 cost $179,917                 151,273             --

Soil Recovery Services, Inc.      15% convertible subordinated debenture,
----------------------------       bankruptcy commenced during 1996,
  Environmental remediation        $1,000,000 unrealized loss incurred
                                   during 1996, $1,000,000 realized loss
                                   incurred during 1999, 1999 cost
                                   $1,000,000                                            --             --

TOTAL OTHER (42.7% AND 31.4% OF TOTAL LOANS AND INVESTMENTS AS OF DECEMBER 31,
2000 AND 1999, RESPECTIVELY)                                                      5,367,438      3,700,000
                                                                                -----------    -----------

TOTAL LOANS AND INVESTMENTS                                                     $12,559,951    $11,774,502
                                                                                ===========    ===========

</TABLE>

*  Non-income producing investment


                                     25
<PAGE>   26

      During the year ended December 31, 1999, interest payments on the
      International Pacific Seafoods, Inc. subordinated note were restructured
      to accommodate the borrower's liquidity needs.

      During the year ended December 31, 1996, Soil Recovery Services, Inc.
      ("SRS"), an investee of the Trust, was forced into involuntary Chapter 7
      bankruptcy by another creditor. As the Trust was continuing its avenues of
      recovery through litigation, the Trust recognized an unrealized loss of
      $1,000,000. The Trust filed several claims against SRS, the President of
      SRS and the investment banking firm, Southwest Merchants Group. As of
      December 31, 1999, all claims have been discharged and the Trust
      recognized a $1,000,000 realized loss during the year ended December 31,
      1999.

      During the year ended December 31, 1999, SunStar HealthCare, Inc.
      ("SunStar") announced it was being sued by Florida's Department of
      Insurance for not meeting its statutory capital requirements for insurance
      underwritings. During the year ended to December 31, 2000, SunStar
      announced that its subsidiary and operating unit was being involuntarily
      placed into receivership for liquidation by the state of Florida. During
      the year ended December 31, 1999, the Trust recognized a $930,000 realized
      loss.

      During the year ended December 31, 1999, Kinseth Hospitality Company,
      Inc. and VisionComm, Inc. were in violation of certain debt covenants.
      The Trust gave waivers to both companies during the year ended
      December 31, 2000.

      As of December 31, 2000, Easy Systems, Inc. and Physicians Total Care,
      Inc. were in default of interest payments owed to the Trust. The Trust
      established an allowance for doubtful accounts during the year ended
      December 31, 2000, to fully reserve for the interest receivable due to
      the Trust from Easy Systems, Inc. and Physicians Total Care, Inc.
      totaling $48,868. Beginning June 2000, the Trust discontinued the
      accrual of interest receivable due to the Trust from Easy Systems,
      Inc. Interest owed to the Trust from Easy Systems during the period
      June 2000 through December 31, 2000 totaled $42,759.

      During the year ended December 31, 2000, the Trust entered into an
      Amendment to the Kinseth Hospitality Company, Inc. Investment Agreement,
      which revised the nature of the underlying collateral on the note
      receivable due May 2003.

3.    DUE TO AFFILIATES

      Due to affiliates comprises the following as of December 31, 2000 and
1999:

                                                2000       1999

Accrued management and administrative fees   $ 42,419   $ 88,121
10% demand note payable to Trust Advisor       60,500         --
Miscellaneous                                   2,105         --
                                             --------   --------
                                             $105,024   $ 88,121
                                             ========   ========



      Interest expense accrued to the Trust Advisor during the year ended
December 31, 2000 totaled $1,960.


                                       26
<PAGE>   27

4.    RELATED PARTY TRANSACTIONS

      The Trust has entered into a management agreement with the Trust Advisor
      that provides for incentive compensation to the Trust Advisor based on the
      capital appreciation of the Trust's investments. The Trust pays the Trust
      Advisor an annual management fee equal to 2.5% of the combined temporary
      investment in money market securities and loans and investments of the
      Trust. The management fee is paid quarterly, in arrears, and is determined
      by reference to the value of the assets of the Trust as of the first day
      of that quarter. Management fees incurred during the years ended December
      31, 2000, 1999 and 1998 relating to this agreement aggregated $404,960,
      $318,357 and $194,820, respectively.

      In addition, the Trust pays a fee for administration of shareholder
      accounts and other administrative services. During each of the years ended
      December 31, 2000 and 1999, administrative fees totaling $38,400 were paid
      to the Trust Advisor. During the year ended December 31, 1998,
      administrative fees were paid to the Dealer Manager and totaled $39,016.

      During the year ended December 31, 1999, the Dealer Manager acted as a
      sales agent for certain investments acquired by the Trust and forfeited
      the sales agent fee to the Trust as a discount on the investment cost.
      During the year ended December 31, 1999, the Dealer Manager forfeited
      sales agent fees totaling $184,000 to the Trust as a discount.
      Additionally, the Dealer Manager forfeited various warrants to purchase a
      total of 60,000 common shares in various portfolio companies, each with a
      cost and fair market value of $0. Due to the above arrangement, the Trust
      also received fees totaling $28,000, which was reported as a discount on
      the investment cost.

5.    DISTRIBUTIONS PAYABLE TO SHAREHOLDERS

      Distributions payable represents a 10% accrued underwriting return
      ("Underwriting Return") and an 8% accrued priority return ("Priority
      Return"). The Underwriting Return is based on actual interest earned by
      the Trust on the investors funds held in escrow through the initial
      closing, plus 10% simple annual interest, computed on a daily basis from
      the initial closing (August 31, 1995) until the Final Closing (June 21,
      1997). The Priority Return is based on 8% simple annual interest computed
      from Final Closing on each shareholder's investment balance in the Trust.

      The Trust intends to make quarterly distributions of all cash revenues to
      the extent that the Trust has cash available for such distributions. These
      distributions must be approved by a majority of the Independent Trustees
      and made within sixty days of the end of each quarter. SBA regulations
      govern the amount of the SBIC's income available for distributions. At
      December 31, 2000 and 1999, no amounts were available for distribution
      within the SBIC under the SBA regulations.


                                       27
<PAGE>   28

      The distributions payable balance comprises the following:


                                UNDERWRITING    PRIORITY
                                   RETURN        RETURN          TOTAL

Balance at January 1, 1999     $   526,401   $   566,539    $ 1,092,940

  Distributions paid                    --      (486,550)      (486,550)

  Distributions earned                  --       843,279        843,279
                               -----------   -----------    -----------

Balance at December 31, 1999       526,401       923,268      1,449,669

  Distributions earned                  --       845,590        845,590
                               -----------   -----------    -----------

Balance at December 31, 2000   $   526,401   $ 1,768,858    $ 2,295,259
                               ===========   ===========    ===========


6.    DEBENTURES

      The SBIC issued debentures payable to the SBA totaling $3,950,000 and
      $5,500,000 during the years ended December 31, 2000 and 1999,
      respectively. The debentures require the semiannual payment of interest at
      annual interest rates ranging from 7.22% to 7.64%. In addition to interest
      payments, the SBIC is required to pay an annual 1% SBA loan fee on the
      outstanding debentures balance. As of December 31, 2000 the interest rates
      on debentures payable totaling $1,200,000 will be adjusted on March 28,
      2001. The debentures contain certain pre-payment penalties and are subject
      to all of the regulations promulgated under the Small Business Investment
      Act of 1958, as amended. Debentures totaling $1,000,000, $6,575,000,
      $725,000 and $1,200,000 and are to be paid in full during September 2009,
      March 2010, September 2010, and March 2011, respectively.

      As of December 31, 2000, the SBIC has unused leverage commitments totaling
      $500,000 and will be required to pay a 2.5% leverage and underwriting fee
      totaling $12,500, which will be deducted pro rata as proceeds are drawn.
      Each issuance of debentures is conditioned upon the SBIC's credit
      worthiness and compliance with specified regulations, as determined by the
      SBA. The SBA may also limit the amount that may be drawn each year. The
      SBA commitment expires September 30, 2004.

7.    COMMITMENTS AND CONTINGENCIES

      The SBIC has committed to invest an additional $200,000 in Pickermans
      Development Company in exchange for a 12% promissory note and warrants,
      which was subsequently funded during January through March 2001.

      During the year ended December 31, 2000, the SBIC was in violation of the
      maximum capital impairment percentage permitted by the SBA. The remedies
      available to the SBA include prohibiting the SBIC from making any
      additional investments other than investments under existing legally
      binding commitments, prohibiting distributions to investors, reviewing and
      redetermining management expenses, and declaring the SBA debentures
      immediately due and payable. The SBIC has not obtained a waiver from the
      SBA, however, management will continue to monitor its investments and work
      with the SBA to cure this violation.


                                       28
<PAGE>   29

8.    FEDERAL INCOME TAXES

      The Trust has received an opinion from counsel that it will be treated as
      a partnership for federal income tax purposes. As such, under present
      income tax laws, no income taxes will be reflected in these financial
      statements as taxable income or loss of the Trust is included in the
      income tax returns of the investors.

9.    SUBSEQUENT EVENT

      During February 2001, the Trust and SBIC entered into an agreement with
      Kinseth Hospitality Company, Inc. ("Kinseth"), in which the Trust and SBIC
      agreed to release its warrants to purchase 25% of Kinseth common shares at
      $.01 per share, in exchange for a lenders commitment to refinance the
      existing mortgage on certain property owned by an affiliate of Kinseth.
      The lenders commitment must be received no later than April 12, 2001. The
      proceeds received from the lenders commitment must be used to pay off the
      outstanding debt and accrued interest to the Trust and SBIC by June 30,
      2001.

10.   QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

<TABLE>
<CAPTION>
                                                                            2000 QUARTERS
                                               ----------------------------------------------------------------------------
                                                   FIRST         SECOND          THIRD         FOURTH           2000
<S>                                            <C>            <C>            <C>            <C>            <C>
Total revenues                                 $   254,391    $   294,176    $   247,999    $   277,767    $ 1,074,333
Net investment loss                                 (5,533)       (23,346)      (152,511)      (108,340)      (289,730)
Unrealized gain (loss)
  on investments                                   297,750      5,300,963     (5,084,939)    (3,997,325)    (3,483,551)
Net increase (decrease)
  in net assets                                    292,217      5,277,617     (5,237,450)    (4,105,665)    (3,773,281)
Increase (decrease) in
  net assets per
  beneficial share                                   27.72         500.68        (496.86)       (389.50)       (357.96)

                                                                            1999 QUARTERS
                                               ----------------------------------------------------------------------------
                                                   FIRST         SECOND          THIRD        FOURTH            2000

Total revenues                                     157,131        143,017        160,671        174,950        635,769
Net investment income
  (loss)                                           (18,821)       (54,907)        18,117        (48,971)      (104,582)
Unrealized loss on
  investments                                           --             --     (1,105,000)    (1,090,298)    (2,185,298)
Realized loss on
  investments                                           --             --             --     (1,930,000)    (1,930,000)
Net decrease in net
  assets resulting from
  operations                                       (18,821)       (54,907)    (1,086,883)    (3,069,269)    (4,229,880)
Cumulative effect of a
  change in accounting
  principle                                        (33,817)            --             --             --        (33,817)
Net decrease in net
  assets                                           (52,638)       (54,907)    (1,086,883)    (3,089,269)    (4,263,697)
Decrease in net assets
  per beneficial shares                              (4.99)         (5.21)       (103.11)       (291.18)       (404.49)
</TABLE>


                                       29
<PAGE>   30
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE
None


                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
A management board consisting of the Independent Trustees and the Trust Advisor
is responsible for the management of the Trust and its business.

Trustees of the Registrant:

         Corporate Trustee - TJB Capital Management, Inc. was organized as a
         Delaware corporation on January 25, 1995 for the purpose of organizing
         the Trust. The principal office of the Corporate Trustee is located at
         1105 N. Market Street, Suite 1300, Wilmington, Delaware, 19801. The
         Corporate Trustee is an affiliate of the Trust Advisor.

         Henry T. Madden (age 71) - Mr. Madden is an Independent Trustee of the
         Trust. He was awarded a B.S.M.E. from the University of Notre Dame in
         1951 and an M.B.A. from the University of Pittsburgh in 1966. He began
         his career as an Industrial Engineer, then Quality Control Manager in
         Technical Ceramics for 3M Company in Chattanooga, Tennessee. He became
         Manager of Production Engineering, then Manager for a 1,500 employee,
         $50 million in sales Allis-Chalmers Plant, manufacturing power and
         distribution transformers in Pittsburgh, Pennsylvania. In 1966, he
         became General Plant Manager of the Allis-Chalmers, Cedar Rapids, Iowa
         Plant manufacturing construction machinery. In 1969, Mr. Madden became
         Division Manager for Hydraulic Truck Cranes for Harnischfeger
         Corporation. In 1975 Mr. Madden became President, Harnischfeger GMBH in
         Dortmund, West Germany, a joint venture with August Thyssen A.G. of
         West Germany, manufacturing truck cranes, creating a 100 million
         deutsche mark business. He also served as Managing Director for
         Harnischfeger International Corporation for Europe, East Europe, and
         North and West Africa, responsible for all product sales in those
         areas. In 1981, Mr. Madden became a consultant to and assumed the
         responsibilities of General Manager of Oak Hill Engineering Inc., in
         Cedar Rapids, Iowa, a manufacturer of wire harnesses. In 1983, he
         started a company, Enertrac Inc., designing, manufacturing and
         marketing communications systems. Mr. Madden financed Enertrac Inc.
         through an initial public offering and merged it into another company
         in 1986. Mr. Madden organized the Institute for Entrepreneurial
         Management in the University of Iowa College of Business Administration
         in 1986, advising potential and new entrepreneurs and teaching courses
         on entrepreneurship in the MBA program. He also teaches courses in
         Corporate Strategy in the Executive MBA and MBA programs. Mr. Madden
         has been consulting with developmental stage companies since 1981.

         Mary Quass (age 51) - Ms. Quass was elected as an Independent Trustee,
         effective February 5, 1999. She received a BA Degree from the
         University of Northern Iowa in 1972. In 1981, she was appointed General
         Sales Manager of KSO and later in 1982 became Vice President and
         General Manager of KHAK AM/FM. In 1988, Ms. Quass formed Quass
         Broadcasting


                                       30
<PAGE>   31
         Company, Inc., which merged with CapStar Broadcasting Partners to form
         Central Star Communications, Inc. in 1998. She held the position of
         President of Quass Broadcasting until 1998. Quass Broadcasting, Inc.
         and Central Star Communications, Inc. are primarily involved in the
         ownership and management of AM and FM radio stations. Currently, she is
         the President and Chief Executive Officer of Quass Enterprises. Ms.
         Quass served as President and Chief Executive Officer of Central Star
         Communications from 1998 through 1999 when the company was sold.

Executive Officers and Directors of the Trust Advisor:

         Thomas J. Berthel (age 49) - Mr. Berthel serves as Chief Executive
         Officer and Chairman of the Board of the Trust Advisor and as the Chief
         Executive Officer of Berthel Fisher and the Financial Services. He has
         held these positions since 1985. Effective March 24, 1999, Mr. Berthel
         was elected President of the Trust Advisor. Until June, 1993, Mr.
         Berthel served as President of the Financial Services. From 1993 until
         the present he has served as Chief Executive Officer and as a Director
         of the Financial Services. Mr. Berthel is also President and a Director
         of various other subsidiaries of Berthel Fisher that act or have acted
         as general partners of separate private leasing programs and two
         publicly sold leasing programs. He serves as the Chairman of the Board
         of Amana Colonies Golf Course, Inc., and, served on the Board of
         Directors of Intellicall, Inc., an advanced telecommunications
         technologies company in Carrollton, Texas, from November, 1995 to
         December, 1999. Mr. Berthel holds a Financial and Operation Principal
         license issued by the National Association of Securities Dealers, Inc.
         He is also a Certified Life Underwriter. Mr. Berthel holds a bachelor's
         degree from St. Ambrose College in Davenport, Iowa (1974). He also
         holds a Master's degree in Business Administration from the University
         of Iowa in Iowa City, Iowa (1993).

         Henry Royer (Age 69) - Mr. Royer was elected President of the Trust
         Advisor in July, 1999. Mr. Royer served as an Independent Trustee of
         the Trust from its date of inception through February 5, 1999, when he
         resigned as Trustee. He graduated in 1953 from Colorado College with a
         B.A. in Money and Banking. From 1950 until 1962, Mr. Royer was employed
         for four years by Pillsbury Mills and for four years by Peavey Company
         as a grain merchandiser. From 1962 through 1965 he was employed as
         Treasurer and served on the Board of Lehigh Sewer Pipe and Tile. Mr.
         Royer joined First National Bank of Duluth in 1965, where he served in
         various capacities, including Assistant Cashier, Assistant Vice
         President, Assistant Manager of the Commercial Loan Department and
         Senior Vice President in Charge of Loans. When he left the bank in 1983
         he was serving as Executive Vice President/Loans. He then joined The
         Merchants National Bank of Cedar Rapids (currently Firstar Bank Cedar
         Rapids, N.A.) where he served as Chairman and President until August,
         1994. Mr. Royer served as the President and Chief Executive Officer of
         River City Bank, Sacramento, California from September 1994 through
         December 31, 1997.

         Ronald O. Brendengen (Age 46) - Mr. Brendengen is the Chief Operating
         Officer, Chief Financial Officer, Treasurer and a Director of the Trust
         Advisor. He has served since 1985 as Controller and since 1987 as the
         Treasurer and a Director of Berthel Fisher. He was elected Secretary
         and Chief Financial Officer in 1994, and Chief Operating Officer in


                                       31
<PAGE>   32
         January 1998, of Berthel Fisher & Company. He also serves as Chief
         Financial Officer, Treasurer and a Director of each subsidiary of
         Berthel Fisher. Mr. Brendengen holds a certified public accounting
         certificate and worked in public accounting during 1984 and 1985. From
         1979 to 1984, Mr. Brendengen worked in various capacities for Morris
         Plan and MorAmerica Financial Corp., Cedar Rapids, Iowa. Mr. Brendengen
         attended the University of Iowa before receiving a bachelor's degree in
         Accounting and Business Administration with a minor in Economics from
         Mt. Mercy College, Cedar Rapids, Iowa in 1978.

         Leslie D. Smith (Age 53) - Mr. Smith is a Director and the Secretary of
         the Trust Advisor. In 1994 Mr. Smith was named General Counsel of
         Berthel Fisher & Company. Mr. Smith was awarded his B.A. in Economics
         in 1976 from Iowa Wesleyan College, Mount Pleasant, Iowa, and his J.D.
         in 1980 from the University of Dayton School of Law, Dayton, Ohio. Mr.
         Smith was employed as Associate Attorney and as a Senior Attorney for
         Life Investors Inc., Cedar Rapids, Iowa, from 1981 through 1985 where
         he was responsible for managing mortgage and real estate transactions.
         From 1985 to 1990 Mr. Smith was General Counsel for LeaseAmerica
         Corporation, Cedar Rapids, Iowa. In that capacity, Mr. Smith performed
         all duties generally associated with the position of General Counsel.
         From 1990 to 1992, Mr. Smith was Operations Counsel for General
         Electric Capital Corporation located in Cedar Rapids, Iowa. From 1993
         to 1994, Mr. Smith was employed as Associate General Counsel for
         Gateway 2000, Inc. in North Sioux City, South Dakota.


                                       32
<PAGE>   33

ITEM 11. EXECUTIVE COMPENSATION
Set forth is the information relating to all direct remuneration paid or accrued
by the Registrant.

<TABLE>
<CAPTION>
(A)                                (B)          (C)          (C1)         (C2)               (D)

                                                                 Securities of property  Aggregate of
                                          Cash and cash             insurance benefits   contingent
Name of individual and            Year    equivalent forms          or reimbursement     or forms
capacities in which served        Ended   of remuneration    Fees   personal benefits    of remuneration
--------------------------------------------------------------------------------------------------------
<S>                                <C>       <C>            <C>            <C>            <C>
TJB Capital Management, Inc.       2000      $     0        $     0        $     0        $     0
Corporate Trustee                  1999      $     0        $     0        $     0        $     0
                                   1998      $     0        $     0        $     0        $     0


Henry T. Madden                    2000      $     0        $17,000        $     0        $     0
Corporate Trustee                  1999      $     0        $20,000        $     0        $     0
                                   1998      $     0        $18,000        $     0        $     0


Henry Royer                        1999      $     0        $ 3,000        $     0        $     0
Corporate Trustee                  1998      $     0        $18,000        $     0        $     0


Mary Quass                         2000      $     0        $17,000        $     0        $     0
Corporate Trustee                  1999      $     0        $16,000        $     0        $     0

The Trust paid the Trust Advisor $404,960, $318,357, and $194,280 for management
fees for the years 2000, 1999, and 1998, respectively.
</TABLE>


                                       33
<PAGE>   34

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
No person owns of record, or is known by the Registrant to own beneficially,
more than five percent of the shares.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Related party transactions are described in notes 3 and 4 of the notes to the
consolidated financial statements.

                                    PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

  (a)   1. Financial Statements                                        Page No.
                                                                       --------

           Consolidated Statements of Assets and Liabilities as of
           December 31, 2000 and 1999                                     14

           Consolidated Statements of Operations for the Years Ended
           December 31, 2000, 1999 and 1998                               15

           Consolidated Statements of Changes in Net Assets for the
           Years Ended December 31, 2000, 1999 and 1998                   17

           Consolidated Statements of Cash Flows for the Years Ended
           December 31, 2000, 1999 and 1998                               18

           Notes to Consolidated Financial Statements                     19

 (b)   Reports on Form 8-K

           None

 (c)   Exhibits

       3.1   Certificate of Trust
       3.2   Declaration of Trust
       10.1  Management Agreement between the Trust and the Trust Advisor
       10.2  Safekeeping Agreement between the Trust and Firstar Bank Cedar
             Rapids, N.A.
       16.   Letter re change in certifying accountant


                                       34
<PAGE>   35
                                   SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

                                           BERTHEL GROWTH & INCOME TRUST I

                                           By:/s/ Thomas J. Berthel
                                              ----------------------------------
Date: March 26, 2001                          THOMAS J. BERTHEL, Chief
                                              Executive Officer (principal
                                              executive officer) of Berthel
                                              Fisher & Company Planning, Inc.,
                                              Trust Advisor

                                           By:/s/ Ronald O. Brendengen
                                              ----------------------------------
Date: March 26, 2001                          RONALD O. BRENDENGEN, Chief
                                              Operating Officer, Chief Financial
                                              Officer and Treasurer (principal
                                              financial officer) of Berthel
                                              Fisher & Company Planning, Inc.,
                                              Trust Advisor


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.


                                           By:/s/ Thomas J. Berthel
                                              ----------------------------------
Date: March 26, 2001                          THOMAS J. BERTHEL, Chairman and
                                              Director of Berthel Fisher &
                                              Company Planning, Inc.,
                                              Trust Advisor

                                           By:/s/ Ronald O. Brendengen
                                              ----------------------------------
Date: March 26, 2001                          RONALD O. BRENDENGEN, Director of
                                              Berthel Fisher & Company Planning,
                                              Inc., Trust Advisor

                                           By:/s/ Henry Royer
                                              ----------------------------------
Date: March 26, 2001                          HENRY ROYER, President of Berthel
                                              Fisher & Company Planning, Inc.,
                                              Trust Advisor

                                           By:/s/ Leslie D. Smith
                                              ----------------------------------
Date: March 26, 2001                          LESLIE D. SMITH, Director of
                                              Berthel Fisher & Company Planning,
                                              Inc., Trust Advisor

                                           By:/s/ Henry T. Madden
                                              ----------------------------------
Date: March 26, 2001                          HENRY T. MADDEN, Independent
                                              Trustee of Berthel Growth
                                              & Income Trust I

                                           By:/s/ Thomas J. Berthel
                                              ----------------------------------
Date: March 26, 2001                          THOMAS J. BERTHEL, Chairman
                                              of the Board and Chief Executive
                                              Officer of TJB Capital Management,
                                              Inc., Trustee of Berthal Growth &
                                              Income Trust I

                                           By:/s/ Daniel P. Wegmann
                                              ----------------------------------
Date: March 26, 2001                          DANIEL P. WEGMANN, Controller of
                                              Berthel Fisher & Company Planning,
                                              Inc., Trust Advisor


                                       35
<PAGE>   36


                                  EXHIBIT INDEX



        3.1       Certificate of Trust (1)
        3.2       Declaration of Trust (2)
       10.1       Management Agreement between the
                     Trust and the Trust Advisor (3)
       10.2       Safekeeping Agreement between the Trust
                     and Firstar Bank Cedar Rapids, N.A. (4)
       16.0       Letter re change in certifying accountant (5)

       ----------

         (1)      Incorporated by reference to the Trust's Registration
                  Statement on Form N-2, filed with the Commission on February
                  14, 1995 (File No. 33-89605).

         (2)      Incorporated by reference to Pre-Effective Amendment No. 3 to
                  the Trust's Registration Statement on Form N-2, filed with the
                  Commission on June 21, 1995 (File No. 33-89605).

         (3)      Incorporated by reference to Pre-Effective Amendment No. 1 to
                  the Trust's Registration Statement on Form N-2, filed with the
                  Commission on May 9, 1995 (File No. 33-89605).

         (4)      Incorporated by reference to Pre-Effective Amendment No. 2 to
                  the Trust's Registration Statement on Form N-2, filed with the
                  Commission on June 12, 1995 (File No. 33-89605).

         (5)      Incorporated by reference to Form 8-K filed with the
                  Commission on October 13, 1995 (File No. 33-89605).


                                       36