UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB
(Mark One)

 [X]     QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

                  For the quarterly period ended July 2, 1999

                                       OR

 [ ]     TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

       For the transition period from _______________ to _______________

                         Commission file number 0-27100

                          FIELDS AIRCRAFT SPARES, INC.
        (Exact name of small business issuer as specified in its charter)

                UTAH                                     95-4218263
  -------------------------------                    --------------------
  (State or other jurisdiction of                    (I.R.S. Employer
   incorporation or organization)                    Identification No.)

               4175 Guardian Street, Simi Valley, California 93063
               ---------------------------------------------------
                    (Address of principal executive offices)

                                 (805) 583-0080
                 -----------------------------------------------
                (Issuer's telephone number, including area code)


               ---------------------------------------------------
              (Former name, former address and former fiscal year,
                          if changed since last report)

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

                      APPLICABLE ONLY TO CORPORATE ISSUERS

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

               Class of Stock                       Amount Outstanding
        -----------------------------             ------------------------
        $.05 par value Common Shares              2,483,781 Common Shares
                                                      at August 6, 1999

           TRANSITIONAL SMALL BUSINESS DISCLOSURE FORMAT (check one):
                                Yes           No   X
                                    -----        -----

<PAGE>

FIELDS AIRCRAFT SPARES, INC.

TABLE OF CONTENTS



Part I - Financial information                                          Page No.
                                                                        --------

         Item 1.  Unaudited consolidated condensed financial statements

                  Balance sheet ...........................................   1
                  Statement of operations for three months.................   2
                  Statement of operations for six months ..................   3
                  Statement of cash flows   ...............................   4
                  Statement of shareholders' equity   .....................   5
                  Notes to the financial statements  ......................   6

         Item 2.  Management's discussion and analysis of
                  financial condition and results of operations   .........  11


Part II - Other information

         Item 1.  Legal proceedings   .....................................  15
         Item 2.  Changes in securities   .................................  15
         Item 3.  Defaults upon senior securities   .......................  15
         Item 4.  Submission of matters to a vote of security holders   ...  15
         Item 5.  Other information  ......................................  15
         Item 6.  Exhibits and reports on Form 8-K   ......................  15


                                       i
<PAGE>
<TABLE>
<CAPTION>
                          FIELDS AIRCRAFT SPARES, INC.
                UNAUDITED CONSOLIDATED CONDENSED BALANCE SHEETS
                       AS OF JULY 2, AND JANUARY 1, 1999


ASSETS
                                                                     July 2, 1999                January 1, 1999
                                                                 ------------------           -------------------
CURRENT ASSETS:
<S>                                                                    <C>                           <C>
   Cash and cash equivalents                                           $         -                   $   431,000
   Accounts receivable, less allowance for doubtful
     accounts of $177,000 and $191,000, respectively                     4,254,000                     5,057,000
   Inventory                                                            16,439,000                    16,719,000
   Prepaid expenses                                                        152,000                       217,000
                                                                 ------------------           -------------------
           Total current assets                                        $20,845,000                   $22,424,000
                                                                 ------------------           -------------------

LAND, BUILDING AND EQUIPMENT:
   Land                                                                $   210,000                   $   210,000
   Building and building improvements                                    1,336,000                     1,275,000
   Furniture and equipment                                               3,308,000                     3,177,000
                                                                                              -------------------
            Totals                                                     $ 4,854,000                   $ 4,662,000
   Less accumulated depreciation and amortization                        1,273,000                       969,000
                                                                 ------------------           -------------------
            Land, building and equipment, net                          $ 3,581,000                   $ 3,693,000
                                                                 ------------------           -------------------

OTHER ASSETS:
   Debt issuance costs, net of accumulated
     amortization                                                      $   868,000                   $   910,000
   Goodwill, net of accumulated amortization                             3,182,000                     3,297,000
   Other assets                                                            718,000                       718,000
                                                                 ------------------           -------------------
            Total other assets                                         $ 4,768,000                   $ 4,925,000
                                                                 ------------------           -------------------
              Total assets                                             $29,194,000                   $31,042,000
                                                                 ==================           ===================


LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
   Accounts payable                                                    $ 4,102,000                   $ 3,469,000
   Accrued liabilities                                                   1,474,000                     1,320,000
   Current portion of notes and capital leases payable                     339,000                       260,000
                                                                 ------------------           -------------------
            Total current liabilities                                  $ 5,915,000                   $ 5,049,000
                                                                 ------------------           -------------------


LONG-TERM LIABILITIES:                                                 $19,074,000                   $19,917,000
                                                                 ------------------           -------------------
SHAREHOLDERS' EQUITY:
   Common shares                                                       $   372,000                   $   372,000
   Additional paid-in capital                                            9,365,000                     9,365,000
   Retained deficit                                                     (5,532,000)                   (3,661,000)
                                                                 ------------------           -------------------
            Total shareholders' equity                                 $ 4,205,000                   $ 6,076,000
                                                                 ------------------           -------------------
              Total liabilities and shareholders' equity               $29,194,000                   $31,042,000
                                                                 ==================           ===================
</TABLE>
                                       1
<PAGE>
<TABLE>
<CAPTION>
                          FIELDS AIRCRAFT SPARES, INC.
            UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
            FOR THE THREE MONTHS ENDED JULY 2, 1999 AND JULY 3, 1998


                                                         1999                       1998
                                                   -----------------           ----------------

<S>                                                    <C>                      <C>
SALES                                                  $  5,436,000             $    5,794,000

COST OF SALES                                             4,024,000                  3,790,000
                                                   -----------------           ----------------

GROSS PROFIT                                           $  1,412,000             $    2,004,000

OPERATING EXPENSES                                        1,873,000                  1,383,000
                                                   -----------------           ----------------

INCOME (LOSS) FROM OPERATIONS                          $   (461,000)            $      621,000

OTHER EXPENSE                                               677,000                  1,672,000
                                                   -----------------           ----------------

INCOME (LOSS)  BEFORE
  PROVISION FOR INCOME TAXES                           $ (1,138,000)            $   (1,051,000)

PROVISION FOR INCOME TAXES                                    3,000                      4,000
                                                   -----------------           ----------------

NET INCOME (LOSS)                                      $ (1,141,000)            $   (1,055,000)
                                                   =================           ================

NET INCOME (LOSS) PER SHARE
  (basic)                                              $      (0.46)            $        (0.32)
                                                   =================           ================

NET INCOME (LOSS) PER SHARE
  (diluted)                                            $      (0.46)            $        (0.32)
                                                   =================           ================
</TABLE>

                                       2
<PAGE>
<TABLE>
<CAPTION>
                          FIELDS AIRCRAFT SPARES, INC.
            UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
             FOR THE SIX MONTHS ENDED JULY 2, 1999 AND JULY 3, 1998

                                                         1999                          1998
                                                   ------------------       --------------------

<S>                                                    <C>                      <C>
SALES                                                  $ 10,727,000             $   11,390,000

COST OF SALES                                             7,657,000                  7,565,000
                                                   ------------------       --------------------

GROSS PROFIT                                           $  3,070,000             $    3,825,000

OPERATING EXPENSES                                        3,581,000                  2,618,000
                                                   ------------------       --------------------

INCOME (LOSS) FROM OPERATIONS                          $   (511,000)            $    1,207,000

OTHER EXPENSE                                             1,356,000                  2,145,000
                                                   ------------------       --------------------

INCOME (LOSS)  BEFORE
  PROVISION FOR INCOME TAXES                           $ (1,867,000)            $     (938,000)

PROVISION FOR INCOME TAXES                                    4,000                      7,000
                                                   ------------------       --------------------

NET INCOME (LOSS)                                      $ (1,871,000)            $     (945,000)
                                                   ==================       ====================

NET INCOME (LOSS) PER SHARE
  (basic)                                              $      (0.75)            $        (0.29)
                                                    ==================       ====================

NET INCOME (LOSS) PER SHARE
  (diluted)                                            $      (0.75)            $        (0.29)
                                                   ==================       ====================
</TABLE>

                                       3
<PAGE>
<TABLE>
<CAPTION>
                          FIELDS AIRCRAFT SPARES, INC.
            UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
             FOR THE SIX MONTHS ENDED JULY 2, 1999 AND JULY 3, 1998


                                                                          1999                        1998
                                                                -------------------          -------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                                  <C>                         <C>
    Net (loss)                                                       $  (1,871,000)              $    (945,000)
    Adjustments  to  reconcile  net (loss)  income to net cash
       used in operating activities:
    Depreciation and amortization                                          304,000                     154,000
    Amortization expense                                                   157,000                     361,000
    Decrease (increase) in accounts receivable                             803,000                  (2,156,000)
    Decrease (increase) in inventory                                       280,000                  (4,193,000)
    Decrease (increase) in prepaid expenses                                 65,000                    (600,000)
    Decrease in other assets                                                     -                     629,000
    Increase in accounts payable                                           633,000                   1,707,000
    Increase in other accrued liabilities                                  154,000                   1,852,000
                                                                -------------------          -------------------
        Net cash provided by (used in) operating activities          $     525,000               $  (3,191,000)
                                                                -------------------          -------------------

CASH FLOWS FROM INVESTING ACTIVITIES:
    Purchase of equipment                                            $    (192,000)              $  (2,047,000)
    Acquisition of goodwill                                                                         (3,441,000)
                                                                -------------------          -------------------
       Net cash used in investing activities                         $    (192,000)              $  (5,488,000)
                                                                -------------------          -------------------

CASH FLOWS FROM FINANCING ACTIVITIES:
    Net (payments) borrowing on line of credit                       $  (1,515,000)              $   1,879,000
    Principal payments on notes payable                                          -                     (60,000)
    Borrowings on notes payable                                            751,000                     359,000
    Net proceeds from issuance of common shares                                                      2,609,000
    Costs associated with the issuance of common shares                                               (391,000)
                                                                -------------------          -------------------
       Net cash (used in) provided by financing activities           $    (764,000)              $   4,396,000
                                                                -------------------          -------------------

NET DECREASE IN CASH                                                 $    (431,000)              $  (4,283,000)


CASH AND CASH EQUIVALENTS, January 1, 1999 and
     December 31, 1997                                                     431,000                   6,071,000
                                                                -------------------          -------------------

CASH AND CASH EQUIVALENTS, July 2, 1999 and July 3, 1998             $           -               $   1,788,000
                                                                ===================          ===================
</TABLE>

                                       4
<PAGE>
<TABLE>
<CAPTION>
                                         FIELDS AIRCRAFT SPARES, INC.
                      UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF SHAREHOLDERS' EQUITY
                            FOR THE SIX MONTHS ENDED JULY 2, 1999 AND JULY 3, 1998


                                         COMMON STOCK
                              -------------------------------
                                 NUMBER                             ADDITIONAL                                  TOTAL
                                OF SHARES                             PAID-IN            RETAINED           SHAREHOLDERS'
                               OUTSTANDING          AMOUNT            CAPITAL             DEFICIT              EQUITY
                              ---------------    ------------     ---------------     ----------------    ---------------
<S>                             <C>              <C>              <C>                 <C>                 <C>
BALANCES, January 1, 1999         2,483,781        $372,000         $ 9,365,000         $ (3,661,000)       $ 6,076,000

Net loss                                                                                  (1,871,000)        (1,871,000)
                              ---------------    ------------     ---------------     ----------------    ---------------

BALANCES, July 2, 1999            2,483,781        $372,000         $ 9,365,000         $ (5,532,000)       $ 4,205,000
                              ===============    ============     ===============     ================    ===============

BALANCES, December 31, 1997       2,079,571        $351,000         $ 6,959,000         $ (1,711,000)       $ 5,599,000

Issuance of common stock            352,092          18,000           2,101,000                               2,119,000

Net loss                                                                                    (945,000)          (945,000)
                              ---------------    ------------     ---------------     ----------------    ---------------

BALANCES, July 3, 1998            2,431,663        $369,000         $ 9,060,000         $ (2,656,000)       $ 6,773,000
                              ===============    ============     ===============     ================    ===============
</TABLE>

                                       5
<PAGE>
                          FIELDS AIRCRAFT SPARES, INC.

       NOTES TO THE UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS


1.  Basis of presentation

The consolidated  condensed  interim financial  statements  included herein have
been  prepared  by  the  Company,  without  audit,  pursuant  to the  rules  and
regulations of the Securities and Exchange  Commission.  Certain information and
footnote  disclosures  normally  included in  financial  statements  prepared in
accordance with generally accepted accounting  principles have been condensed or
omitted  pursuant to such rules and  regulations,  although the Company believes
that  the  disclosures  are  adequate  to make  the  information  presented  not
misleading.

These  statements  reflect  all  adjustments,  consisting  of  normal  recurring
adjustments  which,  in the  opinion  of  management,  are  necessary  for  fair
presentation of the information  contained  therein.  It is suggested that these
consolidated  condensed  financial  statements be read in  conjunction  with the
financial  statements and notes thereto  included in the Company's annual report
on Form  10-KSB/A for the year ended  January 1, 1999.  The Company  follows the
same accounting policies in preparation of interim reports.

The consolidated  financial  statements include the accounts of Fields  Aircraft
Spares,  Inc.  (FASI),  a Utah  corporation,  and its wholly owned  subsidiaries
Fields Aircraft  Spares  Incorporated  (FASC),  Flightways  Manufacturing,  Inc.
(FMI), Skylock Industries (Skylock) and Fields Aero Management,  Inc. (FAM). All
subsidiaries are California corporations.  All significant intercompany accounts
and activity have been eliminated.

The Company  manufactures,  distributes  and stocks  factory new cabin  interior
replacement  parts  applicable  to  various   commercial   aircraft  models  and
redistributes a wide variety of new and reconditioned aircraft parts.


2.  Change in accounting period

In March 1998, the Company  elected to change its reporting year to a 52-53 week
year ending on the Friday of the calendar  week  (beginning on Monday and ending
on Sunday) which  includes the last business day in December,  with each quarter
being  reported in a similar  fashion.  Accordingly,  this  financial  statement
includes  the  balance  sheets as of July 2, 1999 and  January 1, 1999,  and the
activities for the three and six months ended on July 2, 1999 and July 3, 1998.


3.  Inventory

Inventory is valued at the lower of cost or market using the first-in, first-out
method.  Where a group of parts was purchased together as a lot, the cost of the
lot was allocated to the  individual  parts by  management  pro rata to the list
selling  price at the  time of  purchase.  Consistent  with  industry  practice,
inventory is carried as a current  asset but not all inventory is expected to be
sold within one year.

Inventory as of July 2 and January 1, 1999 consisted of the following:

                                    July 2, 1999          January 1, 1999
                                    ------------          ---------------
      Raw materials                 $  1,137,000             $    324,000
      Work-in-process                    671,000                  839,000
      Finished goods                  14,631,000               15,556,000
                                    ------------             ------------
                    Total           $ 16,439,000             $ 16,719,000
                                    ============             ============

                                       6
<PAGE>
                          FIELDS AIRCRAFT SPARES, INC.

       NOTES TO THE UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS


4.  Segment reporting

The Company has two reportable  operating segments for the purposes of Financial
Accounting Standard 131: Distribution and Redistribution; and Manufacturing. The
summary  financial  information  for the segments as of July 2, 1999 and for the
three and six months then ended is as follows:
<TABLE>
<CAPTION>
                                                    Distribution   Manufacturing    Corporate  Eliminations    Consolidated
                                                    and
                                                    redistribution
<S>                                                   <C>              <C>          <C>          <C>              <C>
                                                            $000            $000         $000          $000            $000

Segment assets at January 1, 1999                       $ 20,775        $ 10,481     $ 12,448     $ (12,662)       $ 31,042

Segment assets at July 2, 1999                            20,354           8,606       12,568       (12,334)         29,194

Three months to July 2, 1999
    Revenues from external customers                       3,882           1,286                                      5,168
    Intersegment revenues                                                    268                                        268
    Segment net (loss)                                      (413)           (504)        (224)                       (1,141)

Six months to July 2, 1999
    Revenues from external customers                       7,399           2,451                                      9,850
    Intersegment revenues                                                                                               877
                                                                             877
    Segment net (loss)                                      (828)           (669)        (374)                       (1,871)



The comparative summary financial information for the segments for the three and
six months ended on July 3, 1998 is as follows:

                                                            $000            $000         $000          $000            $000
Three months to July 3, 1998
    Revenues from external customers                     $ 3,867         $ 1,649                                    $ 5,516
    Intersegment revenues                                                    278                                        278
    Segment net profit (loss)                                116             185       (1,356)                       (1,055)

Six months to July 3, 1998
    Revenues from external customers                       7,900           3,150                                     11,050
    Intersegment revenues                                                    340                                        340
    Segment net profit (loss)                                227             270       (1,442)                         (945)
</TABLE>


5.  Shareholders' equity

FASI has 50,000 shares  authorized of its $.001 par value  preferred  stock.  At
July 2 and  January 1, 1999 there were no shares of  preferred  stock  issued or
outstanding.

FASI had the following common shares as of July 2 and January 1, 1999:

                                       7
<PAGE>
                          FIELDS AIRCRAFT SPARES, INC.

       NOTES TO THE UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS


                                       July 2, 1999      January 1, 1999
                                       ------------      ---------------
     Authorized                          5,000,000           5,000,000
     Issued and outstanding              2,483,781           2,483,781
     Par value                                $.05                $.05


In September 1997, FASI closed the sale of $10,000,000  principal amount of 8.5%
Subordinated  Redeemable Debentures due September 2000 issued under an Indenture
with Etablissement Pour le Placement Prive (EPP) as trustee. The securities were
sold in reliance on Regulation S of the  Securities Act of 1933 to entities that
represented to FASI to be accredited non-U.S. persons.

Following  a 20-day  trading  period in which the  average  price of the  common
shares  exceeded $12 per share,  in November  1997 FASI  exercised its resulting
right to convert  $2,000,000  principal  amount of  Debentures  in exchange  for
166,666 common shares at $12 per share. Each Debenture holder now has a one-time
right at any time through September 27, 2000,  subject to prior  redemption,  to
convert  integral  multiples of $1,000 of the principal amount of his Debentures
up to 12.5% of his total  remaining  holding at a conversion  price equal to the
higher of $12 per  share  and 85% of the  average  closing  price of the  common
shares  during  the  20-trading  day  period  ending  on the date of  notice  of
conversion.

The Debentures are redeemable, in whole or in part, at the option of FASI at any
time on or after March 31,  1999 at 100% of the  principal  amount plus  accrued
interest.

In February 1998, FASI accepted subscription  agreements for the sale of 210,664
shares of common stock and 52,666 warrants for  approximately  $2,055,000.  Each
warrant  allows the holder to purchase one common share for $13. The  securities
were sold in reliance on Regulation S of the  Securities Act of 1933 to entities
that represented to FASI to be accredited non-US persons.

In January  1999,  FASI  closed the sale of  $700,000  principal  amount of 8.5%
Subordinated   Convertible  Redeemable  Debentures  due  2001  issued  under  an
indenture  with  EPP as  trustee.  The  securities  were  sold  in  reliance  on
Regulation D of the Securities Act of 1933 to entities that  represented to FASI
to be accredited  investors.  The  Debentures  will mature on December 31, 2001,
unless previously redeemed or repurchased. Interest on the Debentures is payable
semiannually  on June 30 and December 31 of each year  commencing June 30, 1999.
The  Debentures  are  redeemable,  in  whole or in part,  at the  option  of the
Company,  at any time on or after  December 31, 1999,  at 100% of the  principal
amount, plus accrued interest.

The  Debenture  holders  have the  right at any time up to  December  28,  2001,
subject to prior  redemption or  repurchase,  to convert  integral  multiples of
$1,000 of the principal amount of such holder's Debentures into common shares at
a conversion price of $5.50 per common share.


6.  Share option plans

In November  1995,  FASI  adopted a Management  Stock  Option Plan  ("Management
Plan") and an Employee  Stock  Option Plan  ("Employee  Plan").  Pursuant to the
Management Plan , FASI has issued an option to five individuals  involved in the
management  of FASI to acquire up to 69,025  common shares of FASI at a purchase
price of $3.00 per share  subject to vesting  requirements.  One-third  of these
options vested as of June 1, 1997 and another  one-third  vested, as of November
1, 1997. Of the remaining  options,  6,600 vested June 30, 1999 and,  along with
13,200 previously vested options, expire December 21, 1999, and 16,408 will vest
if the holders

                                       8
<PAGE>
                          FIELDS AIRCRAFT SPARES, INC.

       NOTES TO THE UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS


remain  employed by the Company  through  November 3, 1999.  The options must be
exercised within three years of vesting. Pursuant to the Employee Plan, FASI has
issued  options to acquire  13,500  common  shares of FASI to 20  employees at a
purchase price of $3.00 per share subject to vesting  requirements.  The options
vested as of June 1, 1997 and  originally  were  scheduled to expire on June 30,
1999. In May 1999, FASI extended options expiring on June 30, 1999 by one year.

In April 1997, FASI issued options to employees of the Company to acquire 98,000
common  shares  of FASI at an  exercise  price of $6.25 per  share.  Half of the
options  vested in April  1998 and the  remaining  half  vested  in April  1999.
Options for 30,000 shares expire in December 1999, and options for 68,000 shares
expire in April 2000.

In August 1997,  FASI issued  options to executives of the Company to acquire up
to  270,000  common  shares of FASI at an  exercise  price of  $10.00  per share
subject to vesting  requirements.  Half of the options vested August 6, 1998 and
the other half vested August 6, 1999.  Options for 48,400 shares were  cancelled
and options for 38,600 shares  expire in December  1999.  The remaining  options
will expire three years after the vesting date.

In August 1997, FASI issued options to employees of the Company to acquire up to
89,500  common shares of FASI at an exercise  price of $8.25 per share.  Half of
the options vested in August 1998 and the remaining half in August 1999. Options
for 20,000 shares were cancelled.  The remaining  options expire in August 2002.
The exercise  price was reduced in November 1998 to $6.25 per share with respect
to options for 15,500 shares.

In January 1998, FASI granted options to certain key employees and executives to
acquire  up to 50,000  common  shares at a price of $8.35 per share  subject  to
vesting  conditions.  The  exercise  price  was  reduced  to $6.25  per share in
November 1998 and options for 20,000 shares were  cancelled.  Options for 25,000
shares  vested in January 1999 and the remaining  vest in January 2000.  Options
for 20,000 shares expire on January 15, 2000. The remaining  options will expire
three years after vesting.

In February 1998,  FASI granted  options to certain key employees and executives
to acquire up to 119,600 common shares at a price of $10.00 per share subject to
vesting requirements. Options for 20,000 shares were cancelled in November 1998.
The exercise  price was reduced to $6.25 per share in November 1998 with respect
to options for 33,600  shares.  Half of the options vested in February 1999, and
the remainder will vest in February 2000. The options expire in February 2003.

In November 1998,  options to purchase 55,450 common shares of FASI at $6.25 per
share  were  issued  to  certain  officers  and  directors  and  options  for an
additional  37,000  common shares at $6.25 were issued to other  employees.  The
options vest on January 1, 2000 and expire November 3, 2003.

In May 1999, options to purchase 24,800 common shares of FASI at $4.65 per share
were issued to certain  officers  and  directors  and options for an  additional
109,500  common  shares at $4.65 were issued to other  employees  and an outside
consultant.  Options for 109,300  shares  expire on May 12, 2004 and options for
25,000 shares expire on May 12, 2001.

The Company  accounts for share  options  under the  provision of APB Opinion 25
"Accounting for Stock Issued to Employees".  Accordingly,  no compensation  cost
has been recognized for its stock option grants.  Had compensation  cost for the
Company's share option grants been determined based on the fair value consistent
with the method of SFAS Statement 123 "Accounting for Stock-Based Compensation",
the Company's  net loss and net loss per share would have been  increased to the
pro forma amounts indicated below for the six months ended July 2, 1999 and July
3, 1998:

                                       9
<PAGE>
                          FIELDS AIRCRAFT SPARES, INC.

       NOTES TO THE UNAUDITED CONSOLIDATED CONDENSED FINANCIAL STATEMENTS


                                                      1999              1998
                                                      ----              ----

Net income (loss)                  As reported    $(1,871,000)     $  (945,000)
                                                  ===========      ===========
                                   Pro forma      $(2,237,000)     $(1,901,000)
                                                  ===========      ===========
Basic income (loss) per share      As reported    $      (.75)     $      (.29)
                                                  ===========      ===========
                                   Pro forma      $      (.90)     $      (.59)
                                                  ===========      ===========
Diluted income (loss) per share    As reported    $      (.75)     $      (.29)
                                                  ===========      ===========
                                   Pro forma      $      (.90)     $      (.59)
                                                  ===========      ===========

The fair value of each option grant was estimated on the date of grant using the
Black-Scholes  option-pricing model with the following assumptions for the April
1997,  August  7, 1997 and  August  28,  1997  grants,  respectively:  risk-free
interest rates of 6.4%, 5.7% and 6.0%; expected lives of two years for all three
grants;  and  volatility of 78% for all three  grants.  For all the 1998 grants,
risk-free  interest  rates  ranging from 4.3% to 5.6% were used,  with  expected
lives of two years and volatility ranging from 68% to 73%.


7.  Contingency

In the event of the death of a Director or Officer of the  Company,  the Company
is  obligated  to  pay  up  to  100%  of  the  Director's  or  Officer's  annual
compensation to their  beneficiary  within the twelve months subsequent to their
death.


8.  Year 2000

The Company  recognizes the potential  implications of the Year 2000 (Y2K) issue
on systems that may contain  date-related  transactions,  data,  embedded chips,
etc. The Company is assessing the impact of the Y2K issue on its  operations and
is now in the process of  renovating or  replacing,  as necessary,  the computer
applications and business processes to provide for continued services in the new
millennium.  The Company is also assessing the preparedness of external entities
that interface  with the Company.  There can be no assurance that there will not
be a material  adverse  effect on the  Company if its  actions  and/or  those of
related third parties fail to address all significant issues in a timely manner.

The costs of the Company's Y2K  compliance  efforts are expensed as incurred and
are being  funded with cash flows from  operations.  At this time,  the costs of
these  efforts  are not  expected  to be  material  to the  Company's  financial
position or the results of their operations in any given period.

Time and cost  estimates are based on currently  available  information.  Actual
results could differ from those estimated.

                                       10
<PAGE>

ITEM 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS



The  following  discussion  should  be read in  conjunction  with the  unaudited
consolidated  condensed financial statements and related notes thereto set forth
in Item 1.



Quarters ended July 2, 1999 and July 3, 1998

For the  quarter  ended July 2, 1999  operations  of the  Company  generated  an
operating  loss of $461,000,  compared to  operating  income of $621,000 for the
comparable  period of 1998.  The  decrease  in income  from  operations  for the
quarter was  primarily  attributable  to an increase in  operating  expenses,  a
reduction in sales and a reduction in gross margins.

Net sales  for the  quarter  ended  July 2, 1999  were  $5,436,000  compared  to
$5,794,000  for the  quarter  ended July 3,  1998,  a decrease  of  $358,000  or
approximately  6.2%. This decrease in sales included a decrease of $373,000 from
manufacturing sales.  Reduction in sales is primarily  attributable to continued
rescheduling in delivery dates by a number of customers.

Cost of  sales  for the  quarters  ended  July 2,  1999 and  July 3,  1998  were
$4,024,000 and $3,790,000, respectively (approximately 74.0% and 65.4% of sales,
respectively).  The  reduction  in gross  margin  percentages  was mainly due to
lowering  prices  on  certain  stock on hand in order to  reduce  inventory  and
increased costs  associated with the Flightways  manufacturing  operations after
relocation to the Company's corporate facilities in Simi Valley.

Operating  expenses  increased to $1,873,000 for the quarter ended July 2, 1999,
from $1,383,000 for the quarter ended July 3, 1998, an increase of $490,000. The
increase was principally attributable to the increased costs of operating in the
new  facility  Simi  Valley.  The  Company is  consolidating  its  manufacturing
operations at adjacent  sites in Monrovia  California  and plans to relocate its
corporate  offices and  distribution  operation to smaller  premises in order to
reduce expenses.

Interest expense,  including  amortization of debt issuance costs,  increased to
$677,000  from  $472,000  in the  quarters  ended July 2, 1999 and July 3, 1998,
respectively.  This was attributable to increased debt used for acquisitions and
to increase inventory levels.

Other expense for the quarter  ended July 3, 1998 included a one-time  charge of
$1,200,000 to reflect non-recurring expenses relating to the acquisition of Simi
Valley  facility,  relocation  costs  and the  initial  expansion  of the  newly
acquired manufacturing operations.

The  Company  had a net loss for the  quarter  ended July 2, 1999 of  $1,141,000
compared to net income of $145,000  for the quarter  ended July 3, 1998  (before
the one-time  charge),  a decrease in net income of  $1,294,000.  On a per share
basis,  net loss for the quarter  ended July 2, 1999 was $0.46 per share diluted
compared to net loss of $0.32 per share  diluted  for the quarter  ended July 3,
1998 (including the one-time charge).

                                       11
<PAGE>

Six months ended July 2, 1999 and July 3, 1998

For the six months  ended July 2, 1999  operations  of the Company  generated an
operating loss of $511,000,  compared to operating  income of $1,207,000 for the
comparable  period of 1998.  The  decrease  in income  from  operations  for the
quarter was  primarily  attributable  to an increase in  operating  expenses,  a
reduction in sales and a reduction in gross margins.

Net sales for the six months  ended July 2, 1999 were  $10,727,000  compared  to
$11,390,000  for the  comparable  period of 1998,  a  decrease  of  $663,000  or
approximately  5.8%. This decrease in sales included a decrease of $501,000 from
distribution and  redistribution  and a decrease of $162,000 from  manufacturing
sales. Reduction in sales is primarily attributable to continued rescheduling in
delivery dates by a number of customers.

Cost of sales  for the six  months  ended  July 2,  1999 and July 3,  1998  were
$7,657,000 and $7,565,000, respectively (approximately 71.4% and 66.4% of sales,
respectively).  The  reduction  in gross  margin  percentages  was mainly due to
lowering  prices  on  certain  stock on hand in order to  reduce  inventory  and
increased costs  associated with the Flightways  manufacturing  operations after
relocation to the Company's corporate facilities in Simi Valley.

Operating  expenses  increased  to  $3,581,000  for the six months ended July 2,
1999,  from  $2,618,000  for the six months  ended July 3, 1998,  an increase of
$963,000.  The increase was  principally  attributable to the increased costs of
operating in the new  facility  Simi Valley.  The Company is  consolidating  its
manufacturing  operations at adjacent sites in Monrovia  California and plans to
relocate its corporate offices and distribution operation to smaller premises in
order to reduce expenses.

Interest expense,  including  amortization of debt issuance costs,  increased to
$1,356,000  from $945,000 in the six months ended July 2, 1999 and July 3, 1998,
respectively.  This was attributable to increased debt used for acquisitions and
to increase inventory levels.

Other expense for the six months ended July 3, 1998  included a one-time  charge
of $1,200,000 to reflect  non-recurring  expenses relating to the acquisition of
Simi Valley facility,  relocation  costs and the initial  expansion of the newly
acquired manufacturing operations.

The Company had a net loss for the six months  ended July 2, 1999 of  $1,871,000
compared to net income of $255,000 for the six months ended July 3, 1998 (before
the one-time  charge),  a decrease in net income of  $2,134,000.  On a per share
basis,  net loss for the six  months  ended  July 2,  1999 was  $0.75  per share
diluted compared to net loss of $0.29 per share diluted for the six months ended
July 3, 1998 (including the one-time charge).



Liquidity and capital resources

At July 2, 1999 the  Company had working  capital  (current  assets in excess of
current liabilities) of $14,930,000 compared to $17,375,000 at January 1, 1999.

                                       12
<PAGE>

Operating  activities  provided  $525,000  for the six months ended July 2, 1999
compared to operating  cash used of $3,191,000  for the six months ended July 3,
1998,  respectively.  The  major  usage of cash in the  earlier  period  was the
increase in inventory.

The Company's  operations to date have been primarily funded through bank loans,
sales of equity and  debentures,  and seller's  deferred  purchase notes. If the
Company is not able to reach  profitability and obtain additional  funding,  the
Company may not be able to meet its debt service obligations.

The Company's  facility at Simi Valley,  California is larger than is needed for
its  current  operations.  The  Company is  currently  moving the  manufacturing
operations  of its  Flightways  subsidiary  to  substantially  cheaper  premises
adjacent to its Skylock subsidiary in Monrovia,  California.  This will have the
advantage of locating all the manufacturing operations at a single location. The
Company is  currently  seeking to sublet its facility at Simi Valley and to move
its sales and management staff to smaller  premises in Simi Valley.  The Company
has not yet located a subtenant for the Simi Valley facility.

The  Company  will  be  dependent   on  obtaining   additional   capital  or  on
restructuring  its debt as it  becomes  due in the  year  2000.  If the  Company
continues to incur losses, it will also require additional capital to cover such
losses.

The Company will continue actively to seek debt or equity capital infusions. The
Company intends to use a substantial portion of any additional capital to pursue
potential  acquisitions and purchase  inventory.  There is no assurance that the
Company will be successful in securing additional debt or capital.

Year 2000

The Year 2000 problem is the result of computer  programs and embedded  hardware
chips that use two digits rather than four to define the  applicable  date.  The
Company is addressing possible liabilities related to this issue on its computer
systems and machinery by making system and hardware  changes  before  January 1,
2000.

The Company has expended  approximately  $115,000 through the quarter ended July
2, 1999 in  addressing  Year 2000 issues.  The Company is not  anticipating  the
compliance cost to exceed $225,000 and expects to be completed at the end of the
third  period of the 1999 fiscal year.  The Company is  expensing  such costs as
incurred.  The Company is also making inquiries of vendors to determine  whether
vendors are Year 2000 compliant.

There can be no assurance  that the Company or its  suppliers or vendors will be
Year 2000 compliant.  Failure of the Company or any third-party  enterprise with
which the Company  interacts  to achieve that  compliance  could have a material
adverse  effect  on  the  Company,   its  financial  condition  and  results  of
operations.

                                       13
<PAGE>

Forward looking statements

This report includes  statements that relate to future plans,  financial results
or  projections,  events or  performance,  including  statements with respect to
future  business  potential.  These are  forward-looking  statements  within the
meaning of Section 27A of the  Securities  Act of 1933, as amended,  and Section
21E of the Securities Exchange Act of 1934, as amended.

Forward-looking   statements   involve   both  known  and   unknown   risks  and
uncertainties  and actual results or performance may therefore differ materially
from  the  expected   results  or  performance   expressed  or  implied  by  the
forward-looking  statements.  The following  important  factors,  in addition to
factors  the  Company  discusses  elsewhere  in this  report,  could  affect the
Company's actual results or performance:

o    the Company's ability to obtain profitability and acquire enough capital or
     financing to sustain the Company until such time;

o    the Company's ability to effectively  integrate  acquired companies and the
     effects of increased  indebtedness  as a result of the  Company's  business
     acquisitions;

o    the ability to expand the  Company's  business to make cost  effective  the
     expansion of infrastructure put in place during 1998;

o    the Company's ability to control costs;

o    fluctuations in demand for the Company's products, which are dependent upon
     the condition of the airline industry and the Company's  ability to collect
     receivables;

o    the availability to the Company of acquisition and expansion  opportunities
     on attractive terms;

o    the  Company's  continuing  ability to acquire  adequate  inventory  and to
     obtain favorable pricing for such inventory;

o    the Company's  ability to develop and implement  systems to manage  growing
     operations;

o    adverse conditions in the capital markets or in the general economy;

o    the   Company's   ability  to   maintain   existing   customer   or  vendor
     relationships;

o    competitive pricing for the Company's products;

o    customer concentration;

o    changes in government regulation; and

o    the effect and costs of Year 2000 issues.

                                       14
<PAGE>

PART II.  OTHER INFORMATION



ITEM 1.  LEGAL PROCEEDINGS

The Company is currently not a party to any known  litigation other than routine
litigation incidental to its business.

ITEM 2.  CHANGES IN SECURITIES

Issuance of Shares Without Registration

In May 1999, the Company issued options to employees, directors and a consultant
of the Company and its  subsidiaries  entitling  such persons to acquire up to a
total of 134,300 common shares,  subject to vesting requirements,  at a price of
$4.65 per share.  Options to purchase 24,800 common shares vest between November
12, 1999 and May 12, 2001, and expire May 12, 2004.  Options to purchase  84,500
common  shares vest  between May 12, 2000 and May 12,  2002,  and expire May 12,
2004.  The  remaining  25,000  options  vested on or prior to July 31,  1999 and
expire May 12, 2001. The Company did not receive any cash consideration for such
issuance, and paid no commissions. The Company believes such issuance was exempt
from registration pursuant to Section 4(2) of the Securities Act of 1933.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

No matters were  submitted to a vote of the  Company's  shareholders  during the
quarter ended July 2, 1999.

ITEM 5.  OTHER INFORMATION

None.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K.

(a)      Exhibits

                  Those  exhibits  previously  filed  with  the  Securities  and
                  Exchange Commission as required by Item 601 of Regulation S-K,
                  are  incorporated  herein by reference in accordance  with the
                  provisions of Rule 12b-32.

27                Financial Data Schedule

(b)               Reports on Form 8-K

The Company filed no reports on Form 8-K during the quarter ended July 2, 1999.

                                       15
<PAGE>

SIGNATURE



In accordance with the requirements of the Securities  Exchange Act of 1934, the
Registrant has caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.



Date: 19 August, 1999



                                        FIELDS AIRCRAFT SPARES, INC.



                                        By: /s/ Alan M. Fields
                                        ---------------------------------------
                                        Alan M. Fields, President and Principal
                                        Executive Officer



                                        By: /s/ Peter Frohlich
                                        ---------------------------------------
                                        Peter Frohlich, Principal Financial
                                        Officer



                                       16