<PAGE>   1

                    U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                  FORM 10-QSB


            QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                        SECURITIES EXCHANGE ACT OF 1934

                 For the quarterly period ended March 31, 1997


                        Commission file number 33-98346C


                     BERTHEL FISHER & COMPANY LEASING, INC.
                     --------------------------------------
                    (Exact name of small business issuer as
                           specified in its charter)


                  Iowa                                  42-1312639
      ---------------------------------     ---------------------------------
        (State or other jurisdiction        (IRS Employer Identification No.)
      of incorporation or organization)


              100 Second Street SE         Cedar Rapids, IA  52401
              ----------------------------------------------------
                    (Address of principal executive offices)

                                (319)   365-2506
                                ----------------
                          (Issuer's telephone number)



Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act 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: 400,000 shares of Class A
common stock

      Transitional Small Business Disclosure Format (Check one): Yes     No  X
                                                                     ---    ---
<PAGE>   2




                     BERTHEL FISHER & COMPANY LEASING, INC.


                                     INDEX




PART I.   FINANCIAL INFORMATION
          ---------------------

Item 1.   Financial Statements (unaudited).

          Balance sheet - March 31, 1997

          Statements of operations - three months ended March 31, 1997 and three
          months ended  March 31, 1996.

          Statements of cash flows - three months ended March 31, 1997 and three
          months ended March 31, 1996.

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



PART II.  OTHER INFORMATION
          -----------------

Item 1.   Legal Proceedings

Item 2.   Changes in Securities

Item 3.   Defaults Upon Senior Securities

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

Item 5.   Other Information

Item 6.   Exhibits and Reports on Form 8-K


Signatures







                                       2


<PAGE>   3


                     BERTHEL FISHER & COMPANY LEASING, INC.
                           BALANCE SHEET (UNAUDITED)
                                 MARCH 31, 1997



<TABLE>
<S>                                                                           <C>
ASSETS:
    Cash and cash equivalents                                                 $   148,652
    Notes receivable                                                            5,927,848
    Net investment in direct financing leases (Note 3)                          8,792,153
    Allowance for possible loan and lease losses (Note 4)                        (426,210)
                                                                              -----------
    Notes receivable and direct financing leases, net                          14,293,791
    Equipment under operating lease, less accumulated depreciation of $7,784      734,063
    Due from affiliates                                                            42,535
    Investments in:
       Limited partnerships (Note 5)                                              111,347
       Not readily marketable securities, at cost                                 250,477
    Furniture and equipment, less accumulated depreciation of $127,502            210,088
    Deferred income taxes                                                         549,915
    Deferred costs, less accumulated amortization of $197,554                     596,535
    Other assets                                                                  402,617
                                                                              -----------
TOTAL                                                                         $17,340,020
                                                                              ===========

LIABILITIES, REDEEMABLE STOCK AND STOCKHOLDER'S EQUITY (DEFICIT)
LIABILITIES:
    Line of credit agreement (Note 6)                                         $ 8,246,675
    Trade accounts payable                                                         63,352
    Due to affiliates                                                              66,116
    Accrued expenses                                                              209,456
    Dividends payable                                                              11,006
    Lease security deposits                                                       373,234
    Notes payable (Note 6)                                                      1,851,339
    Subordinated debentures (Note 6)                                              725,000
    Subordinated notes payable (Note 6)                                         2,995,783
    Subordinated debenture payable to parent (Note 6)                           2,000,000
                                                                              -----------
       Total Liabilities                                                       16,541,961
                                                                              -----------

COMMITMENTS AND CONTINGENCIES (NOTE 7)

REDEEMABLE CLASS B NONVOTING CONVERTIBLE STOCK (NOTE 8)                           724,911
                                                                              -----------

STOCKHOLDER'S EQUITY (DEFICIT):
    Series A preferred stock, no par value-authorized shares, issued
       and outstanding 51,250 shares (Note 9) ($717,500 liquidation
       value, convertible into 44,844 shares of Class A common stock)             686,760
    Class A common stock, no par value-authorized 1,000,000 shares,
       issued and outstanding 400,000 shares                                        1,000
    Common stock warrants                                                         108,502
    Retained earnings (accumulated deficit)                                      (723,114)
                                                                              -----------
       Total stockholder's equity (deficit)                                       (73,148)
                                                                              -----------

TOTAL                                                                         $17,340,020
                                                                              ===========
</TABLE>


See accompanying notes.

                                       3


<PAGE>   4


                     BERTHEL FISHER & COMPANY LEASING, INC.
                      STATEMENT OF OPERATIONS (UNAUDITED)




<TABLE>
<CAPTION>
                                                        Three Months Ending
                                                              March 31     
                                                        1997           1996   
                                                        ----           ----
<S>                                                   <C>            <C>
Revenue:                                                             
Income from direct financing leases                   $301,598       $286,510
Management fees from affiliates                        209,564        203,227
Interest income                                        215,960        262,138
Gain on early terminations                              12,762        115,430
Other revenues                                          20,490         32,582
                                                      --------       --------
                                                                             
Total revenues                                         760,374        899,887
                                                      --------       --------
                                                                             
Expenses:                                                                    
Employment compensation and benefits                   113,301        195,191
Management fees to affiliates                           99,646        147,614
Interest expense                                       409,520        404,084
Provision for possible loan and lease losses            12,546         33,685
Other expenses                                         213,523        175,289
                                                      --------       --------
                                                                             
Total expenses                                         848,536        955,863
                                                      --------       --------
                                                                             
Loss before income taxes                               (88,162)       (55,976)
Income tax credit                                      (32,678)       (19,612)
                                                      --------       --------
                                                                             
Net loss                                               (55,484)       (36,364)
                                                      ========       ========  
                                                                               
                                                                               
                                                                               
                                                                               
Loss per common share calculation:                                   
  Net loss                                             (55,484)       (36,364)
  Dividends on convertible preferred stock  (Note 9)   (11,006)           -0-
                                                      --------       --------
  Net loss attributable to Class A stock              $(66,490)      $(36,364)
                                                      ========       ========
                                                                             
                                                                             
  Primary                                             $   (.17)      $   (.09)
  Fully Diluted                                       $   (.17)      $   (.09)
                                                                     
                                                                     
                                                                     
See accompanying notes                                               
                                                                     
</TABLE>                                                                     
                                                                     
          
                                       4
          
          
          
<PAGE>   5

                    BERTHEL FISHER & COMPANY LEASING, INC.

                           STATEMENTS OF CASH FLOWS
                                 (UNAUDITED)





<TABLE>
<CAPTION>
                                                               THREE MONTHS ENDED      
                                                          MARCH 31, 1997  MARCH 31,1996
                                                          -----------------------------
<S>                                                         <C>           <C>          
OPERATING ACTIVITIES
Net Loss                                                    $ (55,484)    $  (36,364)
Adjustments to reconcile net loss to net cash
 provided by operating activities:
  Amortization                                                 38,659         14,934
  Provision for uncollectible accounts                         12,546         33,685
  Gain on early termination of leases and notes               (12,762)      (115,430)
  Depreciation                                                 19,700         10,018
  Changes in operating assets and liabilities: 
   Due from affiliates                                        (11,605)           -0-
   Recoverable/payable under tax allocation agreement         (34,004)        (8,052)
   Other assets                                               (70,920)        (1,452)
   Trade accounts payable excluding equipment
     purchase costs accrued                                   (57,017)       (99,503)
   Due to affiliates                                          (35,922)           -0-
   Accrued expenses                                           (18,561)       (48,554)
                                                       --------------  -------------
Net cash from operating activities                           (225,370)      (250,718)


INVESTING ACTIVITIES
Purchases of equipment for direct financing leases           (604,542)    (3,804,786)
Repayments of direct financing leases                       1,138,642        524,124
Proceeds from sale or early termination of
 direct financing leases                                       19,438      2,341,730
Issuance of notes receivable                                  (75,000)    (1,816,284)
Repayments of notes receivable                                482,900        421,127
Proceeds from early termination of notes receivable           213,098      1,397,100
Distributions from limited partnerships                        42,424        234,942
Net lease security deposits collected (repaid)                 (1,642)        78,783
Purchases of furniture and equipment                             (942)       (56,512)
                                                       --------------  -------------
Net cash from investing activities                          1,214,376       (679,776)

</TABLE>


                                       5


<PAGE>   6


                     BERTHEL FISHER & COMPANY LEASING, INC.

                            STATEMENTS OF CASH FLOWS
                            (UNAUDITED) (CONTINUED)

<TABLE>
<S>                                                   <C>          <C>        
FINANCING ACTIVITIES
Net proceeds from (repayments) of line of credit       (1,029,356) 1,004,785
Net proceeds from (repayments) of notes payable          (459,467)   169,804
Repayments of long term debt                                  -0-   (389,434)
Net proceeds from issuance of Series A
   preferred stock and warrants                           305,743        -0-
                                                        ---------  ---------
Net cash from financing activities                     (1,183,080)   785,155
                                                      -----------  ---------
Net decrease in cash and cash equivalents                (194,074)  (145,339)
Cash and cash equivalents at beginning of period          342,726    153,849
                                                      -----------  ---------
Cash and cash equivalents at end of period            $   148,652  $   8,510
                                                      ===========  =========


SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the period for:
 Interest                                             $   400,250  $ 326,192
 Income taxes                                                 -0-      4,170
Noncash investing and financing activities:
 Amortization of Class B nonvoting convertible
     stock issuance costs                                   2,007      2,007
 Equipment reclassified from direct financing leases
     to operating leases                                  526,395        -0-
 Decrease in trade accounts payable attributed
     to equipment purchase costs                           37,858        -0-

</TABLE>

See accompanying notes.

                                       6


<PAGE>   7


                     BERTHEL FISHER & COMPANY LEASING, INC.
                   NOTES TO FINANCIAL STATEMENTS (UNAUDITED)


1.   BASIS OF PRESENTATION

     The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information.  Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principle for complete
financial statements.  In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered necessary for a fair
presentation have been included.  Operating results for the three months ended
March 31, 1997 are not necessarily indicative of the results that may be
expected for the year ending December 31, 1997.  These financial statements
should be read in conjunction with the Company's annual report on Form 10-KSB
filed with the Securities and Exchange Commission for the year ended December
31, 1996.

2.   ORGANIZATION

     Berthel Fisher & Company Leasing, Inc. (the "Company") is a wholly-owned
subsidiary of Berthel Fisher & Company, (the "Parent").  During the year ended
December 31, 1994, the Company formed a wholly-owned subsidiary, Communications
Finance Corporation.  All of the assets and liabilities of Communications
Finance Corporation have been assumed by the Company.  The Company intends to
keep Communications Finance Corporation as a shell for use in future financing
transactions.

     The Company is the general partner in two limited partnerships,
Telecommunications Income Fund IX, L.P. ("TIFIX") and Telecommunications Income
Fund X, L.P. ("TIFX").  The Company accounts for its general partnership
interests in TIFIX and TIFX under the equity method of accounting.  (See Note
5).

3.   NET INVESTMENT IN DIRECT  FINANCING LEASES

     The Company's net investment in direct financing leases at March 31, 1997
consists of:

<TABLE>
              <S>                                     <C>
              Minimum lease payments receivable       $10,208,367
              Estimated unguaranteed residual values      924,380
              Unamortorized initial direct costs          225,873
              Unearned income                          (2,566,467)
                                                      -----------
                                                      $ 8,792,153
                                                      ===========
</TABLE>


4.   ALLOWANCE FOR POSSIBLE LOAN AND LEASE LOSSES

     The change in the allowance for possible loan and lease losses is as
follows:


<TABLE>
                     <S>                             <C>      
                     Balance at beginning of year    $ 412,916
                     Provision                          13,294
                     Charge offs                           -0-
                                                     ---------
                                                     $ 426,210
                                                     =========
</TABLE>


                                       7


<PAGE>   8


                     BERTHEL FISHER & COMPANY LEASING, INC.
             NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

     The allowance for loan and lease losses consists of a specific allowance
for a lease of $100,000 and a general unallocated allowance of $326,210 at
March 31, 1997.  The allowance for possible loan and lease losses was
approximately 2.9%, 1.9% and 2.0% at March 31, 1997, December 31, 1996 and
March 31, 1996.

5.   INVESTMENT IN LIMITED PARTNERSHIPS



     Combined summarized income statement information for TIFIX and TIFX is as 
follows:
<TABLE>
<CAPTION>
                                             THREE MONTHS ENDED MARCH 31
                                             ---------------------------
                                                1997              1996
                                                ----              ----

      <S>                                   <C>               <C>

      Income from direct financing leases   $ 1,323,272       $ 1,606,010
      Other revenue                              61,009           278,458
      Provision for possible losses             (36,159)          135,056
      Expenses                                 (458,800)         (798,475)
                                            -----------       -----------
      Net income                            $   889,322       $ 1,221,049
                                            ===========       ===========
                                                                        
      Net income per partnership unit:                                  
      TIFIX                                 $      4.93        $     7.00
      TIFX                                  $      6.14        $     8.24

</TABLE>


6.   CREDIT ARRANGEMENTS

     The Company has a note payable consisting of a line-of-credit agreement
with a bank.  The amount available to borrow under the line-of-credit is
limited to 75% of its qualified accounts (primarily leases and notes
receivable), but in no case can exceed $11 million.  The line-of-credit bears
interest at prime plus 1.7% and is collateralized by substantially all of the
Company's assets.  The line-of-credit agreement is guaranteed by the Company's
Parent and a major stockholder of the Company's Parent.  The loan agreement
contains various restrictive covenants including, among others, covenants that
restrict dividend payments except to Class B and Series A preferred
stockholders and requires the Company to maintain certain financial ratios
including a total liabilities to tangible net worth ratio, as defined in the
agreement, of not greater than 2.5, a minimum stockholders' equity (including
redeemable stock) of $450,000, plus the net proceeds of any equity offering and
an annual interest coverage ratio of 1.2.  As of March 31, 1997, the Company
was in compliance with the quarterly financial ratio requirements.

     Notes payable at March 31, 1997 consists of:


<TABLE>
<S>                                                                  <C>
        Collateral trust bonds issued by Berthel Fisher & Company
          Leasing, Inc., 9% to 12%, due through 1997                         $    6,940
        Installment loan agreements with banks, 7.75% to 11%, maturing
          through 2000 with subjective acceleration clauses, collateralized
          by net investment in certain direct financing  leases, certain
          agreements are also guaranteed by the Company's Parent              1,828,351
        Capital lease obligations, 5.37%, due through 2000                       16,048
                                                                             ----------
        Notes payable                                                        $1,851,339
                                                                             ==========

</TABLE>
                                       8


<PAGE>   9



                     BERTHEL FISHER & COMPANY LEASING, INC.
             NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

     Subordinated debt consists of the following

         Uncollateralized subordinated debenture payable to
           Parent, floating interest rate, maturing in 2005  $2,000,000
         Uncollateralized subordinated notes payable, 9.5%
           to 10%, maturing in 2001 and 2004                  2,995,522
         Uncollateralized subordinated debentures, 11%
           to 12% maturing through 1998                         725,000
                                                             ----------
         Total subordinated debt                             $5,720,522
                                                             ==========


7.   COMMITMENTS AND CONTINGENCIES

     The Company is contingently liable for all debts of TIF IX and X as the
general partner.

     The Company also has guaranteed amounts outstanding under a line-of-credit
agreement with a bank of TIFIX.  The line-of-credit agreement allows TIFIX to
borrow the lesser of $6.25 million or 32% of its qualified accounts, as defined
in the agreement.  The balance outstanding under this line-of-credit was
$1,430,038 at March 31, 1997.  The agreement matures on November 30, 1997, is
cancelable by the lender after giving 90-day notice and is collateralized by
substantially all assets of TIFIX.  The note is also guaranteed by the
Company's Parent and a principal stockholder of the Company's Parent.

     The Company also has guaranteed amounts outstanding under a line-of-credit
agreement with a bank of TIFX. The line-of-credit agreement allows TIFX to
borrow the lesser of $7.25 million or 40% of its qualified accounts, as defined
in the agreement.  The balance outstanding under this line-of-credit was
$1,376,823 at March 31, 1997.  The agreement matures on November 30, 1997, and
is cancelable by the lender after giving a 90-day notice and is collateralized
by substantially all assets of TIFX.  The note is also guaranteed by the
Company's Parent and a principal stockholder of the Company's Parent.

     The Company has also guaranteed amounts outstanding under installment loan
agreements of TIFIX and TIFX totaling $1,935,175 at March 31, 1997.  The
agreements are collateralized by certain direct financing leases and a second
interest in all assets of  TIFIX and TIFX.

8.   CLASS B NONVOTING CONVERTIBLE STOCK

     The Company's Class B nonvoting convertible stock carries a 12%
noncumulative dividend limited to 25% of the Company's income before taxes each
year, up to a maximum of $1.20 per share.  The Class B nonvoting convertible is
convertible on a one-for-one basis up to a maximum of 20% of the Class A common
stock of the Company after conversion.  The stock is redeemable at $10 per
share for a 30-day period after the tenth anniversary of the issuance date
(April, 1990 to September, 1991) at the option of the holder.  Shares which are
not redeemed during that time are automatically converted to Class A common
stock on a one-for-one basis.

                                       9


<PAGE>   10


                     BERTHEL FISHER & COMPANY LEASING, INC.
             NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

The following summarizes the amounts pertaining to the Class B nonvoting
convertible stock as set forth in the balance sheets at March 31, 1997:

     Class B nonvoting convertible stock (no par value-authorized
      100,000 shares, issued and outstanding 75,500 shares) at
      redemption or liquidation value                             $ 755,000
     Unamortorized stock issuance costs                           $ (30,089)
                                                                  ---------
                                                                  $ 724,911
                                                                  =========


9.   PREFERRED STOCK

     Each share of the Series A preferred stock is entitled to cumulative
annual dividends of 8% payable, if as and when declared by the Board of
Directors, quarterly.  Unpaid dividends will accumulate and be payable prior to
the payment of dividends on the Company's Class A common stock.  The preferred
stock is redeemable at any time at the option of the Company, on not less than
30 days written notice to registered holders.  The redemption price shall be
$14.70 per share if redeemed during 1997, $14.56 per share if redeemed during
1998, $14.42 per share if redeemed during 1999, $14.28 per share if redeemed
during 2000, $14.14 per share if redeemed during 2001, and $14.00 per share if
redeemed thereafter, plus, in each case, accumulated unpaid dividends.  Unless
previously redeemed by the Company, the holders of the preferred stock are
entitled at any time to convert each share into .875 shares of Class A common
stock.  The preferred stock is not entitled to vote on any matter except where
the Iowa Corporation Act requires voting as a class, in which case each share
of stock shall be entitled to one vote per share on those matters where the
preferred stock is voting as a class.  The preferred stock is entitled to a
preference on liquidation equal to $14.00 per share, plus accumulated
dividends.


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

     Total revenues in the three months ended March 31, 1997 have decreased
$139,513 from the same period in 1996 primarily due to a decline of $102,668 in
gains on early lease terminations which occurred in the first quarter of 1996.
During the 1st quarter of 1996 the Company sold approximately 3.1 million of
net investment in direct financing leases to provide the Company the capacity
to continue to originate new business.  These sales generated gains of
approximately $115,000.  During the 1st quarter of 1997, disposals of leases
and notes amounted to $12,762.

     Interest income declined $46,178 from the same period in 1996 due
primarily to principal reduction from normal note payments.

     A reduction in the number of personnel as a result of the Company's plan
to slow its growth to better match its funding capacity has resulted in a
decrease of $81,890 in employment compensation and benefits as compared to the
same period in 1996.

                                       10


<PAGE>   11


ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        -----------------------------------------------------------------------
        OF OPERATIONS (CONTINUED)
        -------------------------

     The Company has reduced the management fees paid to its Parent $6,000 per
month.  This has resulted in an $18,000 reduction in the 1st quarter of 1997
compared to the 1st quarter of 1996.  In addition, the Company, last year paid
one-half of the management fees it received from TIFIX and TIFX to its Parent.
Effective March 1, 1997, this was discontinued, which resulted in a $29,968
reduction in management fees paid to its Parent for TIFIX and TIFX management
fees for the 1st quarter of 1997 compared to the same period in 1996.

     In March, 1997, the Company foreclosed on a lease with Coastal
Communications.  The net investment in this lease ($545,189) has been
reclassified as equipment under operating lease.  The Company has entered into
a management agreement with a pay phone operator to manage the route with the
intent to purchase.  The Company expects to incur a loss upon the sale or lease
of this equipment.  Management believes the Company's loss reserve is
sufficient to cover any potential loss with respect to this equipment.


LIQUIDITY AND CAPITAL RESOURCES

     The Company relies primarily upon debt financing to originate its leases
and notes receivable.  At November 30, 1996, the Company had a $10 million
revolving line-of-credit with Firstar Bank Milwaukee, N.A. with an expiration
date of November, 1997.  This line of credit was increased to $11,000,000 in
December 1996.  At March 31, 1997, $289,204 was available under this line of
credit.  The line of credit bears interest at prime plus 1.76% and is
collateralized by substantially all of the Company's assets.  It can be
canceled by Firstar on 90 days notice.  The line of credit agreement is
guaranteed by the Company's Parent and a major stockholder of the Company's
Parent.  The line of credit is discussed further below.

     From time to time the Company will consolidate a portion of its lease
portfolio to be used as collateral for fixed rate and fixed term loans.  The
Company determines the average maturity of the consolidated leases and obtains
fixed rate and fixed term loans using the consolidated leases as collateral.
The term and interest rate of the financing offered by banks financing this
collateral is matched to the average maturity of the leases.  Utilizing this
type of financing allows the Company to establish a spread between the
financing interest rate and the rates of return on a certain portfolio of
leases.  This type of financing permits the Company not only to plan for a
specific return on a portion of its lease portfolio but also to better utilize
its revolving credit line to write new lease business.  Through March 31, 1997,
the Company had outstanding borrowings of $1,828,351 from various banks in
fixed rate loan transactions.

     The Company has also raised funds via private placement debt offerings. At
March 31, 1997, the Company was obligated on approximately $2,725,000 of notes
issued pursuant to private placement debt offerings, including $2,000,000
payable to its Parent.  The amount due the Parent is payable in 2005 while the
other obligations are due at various dates through 1998.






                                       11


<PAGE>   12


ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        -----------------------------------------------------------------------
        OF OPERATIONS (CONTINUED)
        -------------------------

     The Company has a private placement best efforts offering in progress for
the issuance of $2 million of Series A preferred stock and warrants.  The
Company issued $437,500 of preferred stock and $62,500 of warrants to its
Parent in exchange for the conversion of the subordinated note payable to its
Parent of $264,980 and the contribution of restricted stock of a public company
with an estimated fair value of $220,476.  At March 31, 1997, the Company has
issued a total of $686,760 of preferred stock and $102,500 of warrants.

     In June, 1996, the Company's registration statement on Form SB-2 was
declared effective, and the Company began raising funds through the best
efforts public offering of its subordinated notes (the "Notes").  Through
October 1996, when sales in this offering were terminated by the Company, the
Company had raised $3,001,000 on a best efforts basis.  These Notes were
offered in two series.  Series A Notes pay interest on a monthly basis at an
annual rate of 9.5% and are due 5 years from issuance.  Series B Notes pay
interest on a monthly basis at an annual rate of 10% and are due 8 years from
issuance.  Sales of these Notes were terminated after management became aware
of the pending resignation of the president and chief financial officer, and
after the Company had decided to pursue plans to slow the growth of the Company
to better match its funding capacity and decrease the size of its workforce.

     The credit agreement establishing the Company's line of credit contains
various restrictive covenants that include, among others, restrictions on
dividend payments except to the holders of Class B and Series A Preferred
shares.  The Company is also required to maintain minimum stockholders equity
of $450,000 plus the net proceeds of any equity offering measured on a
quarterly basis.

     The Company does not have sufficient operating capital to continue
originating leases for its own portfolio for more than a few months.  The
business of the Company is dependent upon being able to continue originating
leases, both for its own portfolio and for the portfolios of third party
entities, such as TIFIX and TIFX.  If the Company cannot continue to originate
leases, the Company will not be able to grow, either through the expansion of
its portfolio of leases or by deriving revenue from originating and managing
leases for other entities.  The Company's business plan is dependent upon
having sufficient funds available to enable the Company to continue to
originate leases.  See "Outlook" below.


OUTLOOK

     This Section and other portions of this Quarterly Report on Form 10-QSB
contains statements relating to future results of the Company that are
"forward-looking statements" as defined in the Private Securities Litigation
Reform Act of 1995.  Actual results may differ materially from those projected
as a result of certain risks and uncertainties, including but not limited to
changes in economic conditions, changes in interest rates, availability to the
Company of lease business, changes in personnel, regulation of the
telecommunications industry, and the success or failure of the Company's
customers as well as other risks and uncertainties.  The Company does not
undertake, and specifically disclaims, any obligation to update any forward
looking statements to reflect events or circumstances occurring after the date
of such statements.


                                       12


<PAGE>   13


ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        -----------------------------------------------------------------------
        OF OPERATIONS (CONTINUED)
        -------------------------

     The Company anticipates that existing capital resources, cash flows from
operations, and financing from the Company's Parent, will be adequate to
satisfy the Company's minimum capital requirements for the next twelve months
The Company's plans and forecasts for future growth and profitability, however,
anticipate the need for additional capital through a preferred equity financing
and the sponsorship of another public limited partnership from which the
Company will generate fee income.

     Management of the Company believes that the Company does not have
sufficient operating capital to continue originating leases for its own
portfolio for more than a few months.  The business of the Company is dependent
upon being able to continue originating leases, both for its own portfolio and
for the portfolios of third party entities, such as TIFIX and TIFX.  If the
Company cannot continue to originate leases, the Company will not be able to
grow, either through the expansion of its portfolio of leases or by deriving
revenue from originating and managing leases for other entities.  The
successful completion of the Company's business plan is dependent upon having
sufficient funds available to enable the Company to continue to originate
leases.  The Company's primary source of capital for itself is the private
placement offering for the issuance of $2 million of Class A preferred stock
and warrants.  There are many factors that may preclude the Company from
raising the necessary funds, including without limitation lack of investor
interest and failure of the Company to operate successfully in 1997.  If
sufficient funds are not available from the offering, the Company will have to
consider the alternatives for obtaining capital, including the sale of existing
leases owned by the Company and obtaining new capital from the Company' Parent.
Such alternative capital may not be available depending upon a variety of
factors, including without limitation the possibility that purchasers of leases
cannot be found, interest rates increase, the Company's Parent has no funds
available to it or the Company fails to operate effectively in 1997.  The
Company's long term success is highly dependent upon the success of the Company
in obtaining additional funds.

     The Company's current business plan anticipates that the Company will
sponsor a limited partnership (the "Fund") similar to TIFIX and TIFX, for which
the Company will serve as general partner.  The Company intends to register
interests in the fund under the Securities Act of 1933 and offer those
interests publicly.  If such an offering is successful, the Company, as general
partner, would originate leases and finance contracts for the Fund, resulting
in the Company realizing acquisition fees and management fees.  The Company
cannot predict whether it will sponsor the Fund and, if it does sponsor the
Fund, whether the Fund will have sufficient capital to begin operations any
time in 1997.  The Company may not be able to rely upon the availability of the
Fund's capital to originate leases.  The Fund could be delayed or abandoned due
to several factors, including the inability of the Company to qualify as the
general partner, the failure of the Fund's offering due to lack of investor
interest, delay in organizing the Fund, delay of the effectiveness of the
Fund's registration statement as well as other factors.  If the public offering
is not successful, the Company would not be able to originate leases for the
Fund, and would not realize revenue from management fees and origination fees.
The Company's long term success is highly dependent upon the success of the
Company's planned sponsorship and subsequent successful offering of the Fund.






                                       13




<PAGE>   14


ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        -----------------------------------------------------------------------
        OF OPERATIONS (CONTINUED)
        -------------------------

     The credit agreement establishing the line of credit contains various
restrictive covenants that include, among others, restrictions on divided
payments except to the holders of Class B and Series A Preferred shares,
maintaining an interest coverage ratio and maintaining minimum stockholders
equity measured on a quarterly basis.  Management believes it will be able to
maintain compliance with the covenants in 1997.  Management also expects, based
on discussion with the lender, to renew the line of credit when it comes due in
November 1997.  However, the Company may be in violation of one or more of
these covenants, and if it is, the bank may not grant the amendments and
waivers requested by the Company.  Continued adverse operating results could
cause noncompliance with these covenants, in which event the bank could
immediately accelerate the maturity of the entire outstanding balance under the
line of credit or deny or restrict the Company's access to funds under the line
of credit, thus materially and adversely affecting the Company's financial
condition and continuing business operations.  Also, certain other debt
obligations of the Company contain standard cross-default provisions.
Non-compliance with these covenants could result in the immediate acceleration
of the maturity of such other debt.


















                                       14


<PAGE>   15


                          PART II - OTHER INFORMATION



ITEM 1. LEGAL PROCEEDINGS
        -----------------

    None


ITEM 2. CHANGES IN SECURITIES
        ---------------------

    There is no public trading market for any of the Company's debt or  equity 
securities.

<TABLE>
<CAPTION>
                                        Number of                 Number of
                                      Shareholders at        Shares Outstanding
       Title of Class                 March 31, 1997         at March 31, 1997
       --------------                 --------------         ----------------
       <S>                                  <C>                    <C>
       Class A. Common                       1                     400,000
       Class B Nonvoting Convertible        31                      75,500
       Series A Preferred                    9                      30,341

</TABLE>


     The Company has never paid or declared any dividends on its Common Stock
and does not intend to pay dividends on its Common Stock in the foreseeable
future.

     The Class B Stock carries a 12% noncumulative dividend limited to 25% of
the Company's income before taxes each year up to a maximum of $1.20 per share.
The Class B Stock is convertible to Class A Common Stock of the Company on a
one for one basis.  The Class B Stock is redeemable at $10.00 per share for a
30 day period after the tenth anniversary of the issuance date (April 1990 to
December 1991) at the option of the holder.  Class B Stock not redeemed during
that time is automatically converted to Class A. Common Stock on a one for one
basis.  The Company declared dividends on Class B Stock of $-0- in 1996, $-0-
in 1995, and $114,600 in 1994.

     Securities sold during the three months ended March 31, 1997 not
registered under the Securities Act:


<TABLE>
<CAPTION>
                                     Number        Total
     Title of Class                 of Shares  Offering Price  Commissions
     -----------------------------  ---------  --------------  -----------
     <S>                            <C>        <C>             <C>
     Units consisting of Series A
     Preferred Stock, "A" Warrants  20,000     $320,000        $28,800
     and "B" Warrants

</TABLE>


     Exemption from registration from the Securities Act of the Units was
claimed under Rule 505 and 506 of Regulation D.  The Units consisting of Series
A Preferred Stock, "A" Warrants and "B" Warrants was offered only to accredited
investors.

                                       15


<PAGE>   16


ITEM 2. CHANGES IN SECURITIES  (CONTINUED)
        ----------------------------------

SERIES A PREFERRED STOCK

     The Company's undesignated Preferred Stock may be issued in one or more
series, to bear such title or designation as may be fixed by resolution of the
Board of Directors prior to the issuance of any shares thereof.  Each series of
Preferred Stock will have such voting powers, if any, preferences, and other
rights as determined by the Board of Directors, with such qualifications,
limitations or restrictions as may be stated in the resolutions of the Board of
Directors adopted prior to the issuance of any shares of such series of
Preferred Stock.

     The Series A Preferred Stock is the first series of Preferred Stock
designated by the Board of Directors.  The Board has no present plans to issue
any other series of Preferred Stock.  However, purchasers of the Preferred
Shares offered should be aware that the holders of any series of the Preferred
Stock which may be issued in the future could have voting rights, rights to
receive dividends or rights to distribution in liquidation superior to those of
holders of the Preferred Shares or Common Stock, thereby diluting or negating
the voting rights, dividend rights or liquidation rights of the holders of the
Preferred Shares of Common Stock.

Dividends

     Each share of Series A Stock is entitled to cumulative annual dividends of
8% payable if, as and when declared by the Board of Directors on March 31, June
30, September 30 and December 31, with dividends to be distributed April 15,
July 15, October 15 and January 15.  With respect to the first dividend to be
paid after issuance of a particular share of Series A. Stock, the 8% dividend
shall be prorated from the date of issuance to the March 31, June 30, September
30 or December 31 immediately following such date of issuance.  Unpaid
dividends will accumulate and be payable prior to the payment of dividends on
the Common Stock.  Series A Stock does not participate in dividends declared on
Common Stock or any other class of stock issued by the Company.

Conversion Rights

     Unless previously redeemed by the Company, the holders of shares of Series
A Preferred Stock are entitled at any time to convert each share of Series A
Preferred Stock into .875 share of Class A Common Stock.  No fractional shares
of common stock will be issued but in lieu thereof the Company shall pay an
equivalent amount in cash.

A & B Warrants

     Each "A" Warrant grants the holder of the "A" Warrant the right to
purchase one share of Class A Common Stock ("Common Stock") of the Company for
$12.00 per share.  Each "B" Warrant grants the holder of the "B" Warrant the
right to purchase one share of Common Stock of the Company for $14.00 per
share.  The "A" Warrants and "B" Warrants may be referred to herein
collectively as the "Warrants".







                                       16


<PAGE>   17


ITEM 2.  CHANGES IN SECURITIES (CONTINUED)
         ---------------------------------

     Each "A" Warrant expires on April 30, 1998.  An "A" Warrant may be
exercised at any time prior to its expiration date.  From and after the
expiration date of each "A" Warrant, each "A" Warrant not theretofore exercised
shall be void and of no effect.  Each "B" Warrant expires on April 30, 1999.  A
"B" Warrant may be exercised at any time prior to its expiration date.

     From and after the expiration date of each "B" Warrant, each "B" Warrant
not theretofore exercised shall be void and of no effect.  Each Warrant may
expire on an earlier date, upon certain changes in control, in the event of an
initial public offering.

     The exercise price with respect to each "A" Warrant is $12.00 per share of
Common Stock.  The exercise price with respect to each "B" Warrant is $14.00
per share of Common Stock.  A Warrant may be exercised by paying the exercise
price and surrendering the Warrant Certificate to the Company at its principal
office with the Election to Purchase" form set forth on the Warrant Certificate
duly completed and exercised by the Holder.  Upon exercise of a Warrant and
payment of the exercise price, the number of shares of Common Stock as to which
the Warrant is exercised will be issued.  The payment of the exercise price
must be made in full and in cash at the principal office of the Company.



ITEM 3.  DEFAULTS UPON SENIOR SECURITIES
         -------------------------------

     None


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

     None


ITEM 5.  OTHER INFORMATION
         -----------------

     None


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

     a.  Exhibits - None
     b.  No Report on Form 8-K was filed for the quarter ended March 31, 1997











                                     17

<PAGE>   18

                                  SIGNATURES

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


                     BERTHEL FISHER & COMPANY LEASING, INC.
                     --------------------------------------
                                  (Registrant)



Date:                                   Ronald O. Brendengen/s/
       ------------                     ---------------------------------------
                                        Ronald O. Brendengen, Chief Financial 
                                        Officer, Treasurer




Date:                                   Daniel P. Wegmann/s/
       ------------                     ---------------------------------------
                                        Daniel P. Wegmann, Controller




















                                     18