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 June 30, 1997

                                       OR

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

For the transition period from ____________________________________

                         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.)

                2251-A Ward Avenue, Simi Valley, California 93005
               ----------------------------------------------------
                    (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                      1,892,886 Common Shares
                                                       at July 31, 1997

            TRADITIONAL SMALL BUSINESS DISCLOSURE FORMAT (check one):
                                 Yes [ ] No [X]

<PAGE>
                          FIELDS AIRCRAFT SPARES, INC.

                                TABLE OF CONTENTS

                                                                    Page No.

Part I - Financial Information

         Item 1.  Consolidated Financial Statements

                  Balance Sheet.........................................3
                  Statement of Operations...............................4
                  Statement of Cash Flows...............................5
                  Statement of Shareholders' Equity.....................6
                  Notes to Financial Statements.........................7


         Item 2.  Management's Discussion and Analysis of
                  Financial Condition and Results of
                  Operations...........................................17


Part II. - Other Information

         Item 1.  Legal Proceedings....................................21
         Item 2.  Changes in Securities................................21
         Item 3.  Defaults upon Senior Securities......................22
         Item 4.  Submission of Matters to a Vote
                   of Security Holders.................................22
         Item 5.  Other Information....................................23
         Item 6.  Exhibits and Reports on Form 8-K.....................23

                                        2

<PAGE>
<TABLE>
<CAPTION>
                                                 FIELDS AIRCRAFT SPARES, INC.
                                        FORMERLY KNOWN AS FIELDS INDUSTRIAL GROUP, INC.

                                             UNAUDITED CONSOLIDATED BALANCE SHEET
                                           AS OF JUNE 30, 1997 AND DECEMBER 31, 1996

                                                     A S S E T S
                                                                                              1997                    1996
                                                                                              ----                    ----
CURRENT ASSETS:
<S>                                                                            <C>                     <C>              
     Cash                                                                        $         578,000       $          88,000
     Accounts receivable, less allowance for doubtful
         accounts of $100,000 in 1997 and $50,000 in 1996                                1,914,000               1,507,000
     Inventory                                                                           9,214,000               8,108,000
     Prepaid expenses                                                                      230,000                 149,000
                                                                                 -----------------       -----------------          
                  Total current assets                                           $      11,936,000       $       9,852,000
                                                                                 -----------------       -----------------

LAND, BUILDING AND EQUIPMENT:
     Land                                                                        $         210,000       $         210,000
     Building and building improvements                                                  1,061,000               1,061,000
     Furniture and equipment                                                               561,000                 548,000
                                                                                 -----------------       -----------------
                  Totals                                                         $       1,832,000       $       1,819,000
     Less accumulated depreciation and amortization                                        794,000                 734,000
                                                                                 -----------------       -----------------
                      Land, building and equipment, net                          $       1,038,000       $       1,085,000
                                                                                 -----------------       -----------------

OTHER ASSETS:
     Debt issuance costs, net of accumulated amortization                        $         401,000       $         300,000
     Other assets                                                                          319,000                 262,000
                                                                                 -----------------       -----------------
                  Total other assets                                             $         720,000       $         562,000
                                                                                 -----------------       -----------------
                      Total assets                                               $      13,694,000       $      11,499,000
                                                                                 =================       =================
<CAPTION>
                                             LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
<S>                                                                              <C>                     <C>              
     Accounts payable                                                            $       1,407,000       $         864,000
     Other accrued liabilities                                                             292,000                 230,000
     Income taxes payable                                                                    3,000                   1,000
     Current portion of notes payable                                                      405,000               6,323,000
                                                                                 -----------------       -----------------
                  Total current liabilities                                      $       2,107,000       $       7,418,000
                                                                                 -----------------       -----------------

LONG-TERM LIABILITIES                                                            $       8,314,000       $         268,000
                                                                                 -----------------       -----------------

SHAREHOLDERS' EQUITY:
     Common stock                                                                $         341,000       $         312,000
     Additional paid-in capital                                                          5,035,000               5,065,000
     Retained deficit                                                                   (2,103,000)             (1,564,000)
                                                                                 -----------------       -----------------
                  Total shareholders' equity                                     $       3,273,000       $       3,813,000
                                                                                 -----------------       -----------------
                      Total liabilities and shareholders' equity                 $      13,694,000       $      11,499,000
                                                                                 =================       =================
</TABLE>
                                       3

<PAGE>
<TABLE>
<CAPTION>
                                              FIELDS AIRCRAFT SPARES, INC.
                                     FORMERLY KNOWN AS FIELDS INDUSTRIAL GROUP, INC.

                                     UNAUDITED CONSOLIDATED STATEMENT OF OPERATIONS
                                    FOR THE THREE MONTHS ENDED JUNE 30, 1997 AND 1996

                                                                                      1997                      1996
                                                                                      ----                      ----

<S>                                                                       <C>                      <C>             
SALES                                                                      $     2,941,000          $      1,186,000

COST OF SALES                                                                    1,753,000                   741,000
                                                                           ---------------          ----------------

GROSS PROFIT                                                               $     1,188,000          $        445,000

OPERATING EXPENSES                                                                 793,000                   464,000
                                                                           ---------------          ----------------

INCOME (LOSS) FROM OPERATIONS                                              $       395,000          $        (19,000)
                                                                           ---------------          ----------------

OTHER EXPENSE (INCOME):
    Casualty gain                                                          $        -               $       (256,000)
    Interest expense, net                                                          278,000                   322,000
                                                                           ---------------          ----------------

             Total other expense                                           $       278,000          $         66,000
                                                                           ---------------          ----------------

INCOME (LOSS) BEFORE PROVISION FOR
    INCOME TAXES                                                           $       117,000          $        (85,000)

PROVISION FOR INCOME TAXES                                                           2,000                   -
                                                                           ---------------          ----------------

NET INCOME (LOSS)                                                          $       115,000          $        (85,000)
                                                                           ===============          ================

NET INCOME (LOSS) PER SHARE (primary)                                      $           .06          $           (.09)
                                                                           ===============          ================

NET INCOME (LOSS) PER SHARE (fully-diluted)                                $           .05          $           (.06)
                                                                           ===============          ================
</TABLE>
                                       4

<PAGE>
<TABLE>
<CAPTION>
                                              FIELDS AIRCRAFT SPARES, INC.
                                     FORMERLY KNOWN AS FIELDS INDUSTRIAL GROUP, INC.

                                     UNAUDITED CONSOLIDATED STATEMENT OF OPERATIONS
                                     FOR THE SIX MONTHS ENDED JUNE 30, 1997 AND 1996


                                                                                      1997                      1996
                                                                                      ----                      ----

<S>                                                                       <C>                      <C>             
SALES                                                                      $     5,030,000          $      2,546,000

COST OF SALES                                                                    2,988,000                 1,356,000
                                                                           ---------------         -----------------

GROSS PROFIT                                                               $     2,042,000          $      1,190,000

OPERATING EXPENSES                                                               1,637,000                 1,241,000
                                                                           ---------------          ----------------

INCOME (LOSS) FROM OPERATIONS                                              $        405,000         $        (51,000)
                                                                           ----------------         ----------------

OTHER EXPENSE (INCOME):
    Casualty gain                                                          $        -               $       (909,000)
    Interest expense, net                                                          942,000                   628,000
                                                                           ---------------          ----------------

             Total other expense (income)                                  $       942,000          $       (281,000)
                                                                           ---------------          ----------------

(LOSS) INCOME BEFORE PROVISION FOR
    INCOME TAXES                                                           $      (537,000)         $        230,000

PROVISION FOR INCOME TAXES                                                           2,000                     3,000
                                                                           ---------------          ----------------

NET (LOSS) INCOME                                                          $      (539,000)         $        227,000
                                                                           ===============          ================

NET (LOSS) INCOME PER SHARE (primary)                                      $          (.28)         $            .23
                                                                           ===============          ================

NET (LOSS) INCOME PER SHARE (fully-diluted)                                $          (.24)         $            .16
                                                                           ===============          ================
</TABLE>
                                       5

<PAGE>
<TABLE>
<CAPTION>
                                           FIELDS AIRCRAFT SPARES, INC.
                                  FORMERLY KNOWN AS FIELDS INDUSTRIAL GROUP, INC.

                                    UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOWS
                                    FOR THE SIX MONTHS ENDED JUNE 30, 1997 AND 1996


                                                                                             1997                   1996
                                                                                             ----                   ----
CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                                            <C>                    <C>              
     Net (loss) income                                                          $        (539,000)     $         227,000
     Adjustments to reconcile net (loss) income to net
        cash (used in) provided by operating activities:
     Depreciation and amortization                                                         60,000                 60,000
     Amortization of debt issuance costs                                                  369,000                 87,000
     Loss on sale of assets                                                                                       51,000
     (Increase) decrease in accounts receivable                                          (407,000)               350,000
     Increase in inventory                                                             (1,106,000)              (265,000)
     Increase in prepaid expenses                                                         (81,000)                (4,000)
     Increase in other assets                                                             (91,000)              (106,000)
     Increase in accounts payable                                                         543,000                333,000
     Increase in other accrued liabilities                                                 62,000                123,000
     Increase in income taxes payable                                                       2,000
                                                                                -----------------      -----------------

        Net cash (used in) provided by operating
            activities                                                          $      (1,188,000)     $         856,000
                                                                                -----------------      -----------------

CASH FLOWS FROM INVESTING ACTIVITIES:
     Purchase of equipment                                                      $         (13,000)     $          (3,000)
                                                                                -----------------      -----------------

CASH FLOWS FROM FINANCING ACTIVITIES:
     Net payments on line of credit                                             $      (6,232,000)     $        (821,000)
     Principal payments on notes payable                                                  (41,000)              (127,000)
     Borrowings on notes payable                                                        8,401,000                 58,000
     Costs associated with issuance of notes payable                                     (470,000)
     Proceeds from issuance of common stock                                               180,000
     Costs associated with the issuance of common stock                                  (147,000)
                                                                                -----------------      -----------------

        Net cash provided by (used in) financing activities                     $       1,691,000      $        (890,000)
                                                                                -----------------      -----------------

NET INCREASE (DECREASE) IN CASH                                                 $         490,000      $         (37,000)

CASH, December 31, 1996 and 1995                                                           88,000                111,000
                                                                                -----------------      -----------------

CASH, June 30, 1997 and 1996                                                    $         578,000      $          74,000
                                                                                =================      =================
</TABLE>
                                       6

<PAGE>
<TABLE>
<CAPTION>
                                                   FIELDS AIRCRAFT SPARES, INC.
                                          FORMERLY KNOWN AS FIELDS INDUSTRIAL GROUP, INC.

                                            UNAUDITED STATEMENT OF SHAREHOLDERS' EQUITY
                                          FOR THE SIX MONTHS ENDED JUNE 30, 1997 AND 1996


                                        COMMON SHARES 
                                 -------------------------- 
                                   NUMBER OF                     ADDITIONAL                               TOTAL 
                                    SHARES                         PAID-IN          RETAINED          SHAREHOLDERS'
                                  OUTSTANDING       AMOUNT         CAPITAL          DEFICIT              EQUITY 
                                 ------------     ----------     -----------     -------------     -----------------
<S>                              <C>           <C>            <C>             <C>                  <C>                 
BALANCE, December 31, 1995          984,352       $ 297,000      $ 1,376,000     $ (1,322,000)        $   351,000

Additional paid-in capital                                         2,050,000                            2,050,000

Net income                                                                            227,000             227,000
                                   --------       ---------      -----------     ------------         -----------

BALANCE, June 30, 1996              984,352       $ 297,000      $ 3,426,000     $ (1,095,000)        $ 2,628,000
                                   ========       =========      ===========     ============         =========== 



BALANCE, December 31, 1996        1,302,137       $ 312,000      $ 5,065,000     $ (1,564,000)        $ 3,813,000

Issuance of common stock            590,749          29,000          (30,000)                              (1,000)

Net loss                                                                             (539,000)           (539,000)
                                 ----------       ---------      -----------     ------------         -----------

BALANCE, June 30, 1997            1,892,886       $ 341,000      $ 5,035,000     $ (2,103,000)        $ 3,273,000
                                 ==========       =========      ===========     ===========        =============
</TABLE>
                                       7

<PAGE>
                          FIELDS AIRCRAFT SPARES, INC.
                 FORMERLY KNOWN AS FIELDS INDUSTRIAL GROUP, INC.

            NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


                  In the opinion of management,  all adjustments  (consisting of
normal recurring accruals) considered necessary for the fair presentation of the
financial statements have been included.

1.       Summary of significant accounting policies

         a.       Principles of consolidation and company background

                  The  consolidated  Group  financial   statements  include  the
accounts of Fields Aircraft Spares, Inc., a Utah corporation,  formerly known as
Fields  Industrial  Group,  Inc.,   hereafter  referred  to  as  FASI,  and  its
wholly-owned   subsidiaries  Fields  Aircraft  Spares  Incorporated   (FASC),  a
California  corporation  and  Fields  Aero  Management,   Inc.  All  significant
intercompany accounts and activity have been eliminated.

                  In 1995,  Fields  Industrial  Group,  Inc. changed its name to
Fields Aircraft Spares, Inc.

                  The Group distributes new aircraft parts and equipment for use
on international and domestic commercial and military aircraft and purchases and
sells parts on a brokerage basis.

         b.       Concentration of credit risk

                  Substantially  all of the Group's trade  accounts  receivables
are due from  companies in the airline  industry  located  throughout the United
States and  internationally.  The Group performs periodic credit  evaluations of
its  customers'  financial  condition  and does not require  collateral.  Credit
losses  relating to customers in the airline  industry  have  consistently  been
insignificant and within management's expectations.

         c.       Concentration of sales

                  The Group had sales to foreign  companies that amounted to 17%
and 28% of  total  sales  for the six  months  ended  June 30,  1997  and  1996,
respectively.

                  For  the  six  months  ended  June  30,  1997,  two  customers
accounted for sales of $696,000 and $507,000.  For the six months ended June 30,
1996, one customer accounted for $273,000 of sales.

                                       8
<PAGE>
                          FIELDS AIRCRAFT SPARES, INC.
                 FORMERLY KNOWN AS FIELDS INDUSTRIAL GROUP, INC.

            NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


1.       Summary of significant accounting policies (continued)

         d.       Inventory

                  Inventory is valued at the lower of cost or market value using
the  first-in,  first-out  method.  Where a group of parts  have been  purchased
together as a lot, the cost of the lot is 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
all inventory is not expected to be sold within one year.

         e.       Land, building and equipment

                  Land,   building   and   equipment   are   recorded  at  cost.
Depreciation  is computed  using the  straight-line  method  over the  estimated
useful lives of the assets which range from 3 to 25 years.

                  The cost and related accumulated depreciation and amortization
of assets sold or  otherwise  retired are  eliminated  from the accounts and any
gain or loss is included in the statement of operations. The cost of maintenance
and repairs is charged to income as incurred,  whereas significant  renewals and
betterments are capitalized.  Depreciation expense for the six months ended both
June 30, 1997 and 1996 amounted to $60,000.

         f.       Debt issuance costs

                  The debt  issuance  costs  relate to the  issuance  of the new
financing. Amortization of debt issuance costs for the six months ended June 30,
1997 and 1996 amounted to $369,000 and $87,000, respectively.

         g.       Revenue recognition

                  The Group recognizes revenue from all types of sales under the
accrual  method of  accounting  when title  transfers.  Title  transfers  at the
Group's facility.

         h.       Earnings per share

                  In March  1995,  FASI's  shareholders  authorized  the reverse
split of its  common  stock on the basis of fifty old  shares for one new share.
This reverse split was effective as of November 1995.  All references  herein to
the number of shares are after the reverse split.

                  Fully diluted  earnings per share was computed using 2,280,920
and  1,422,502  shares  for the  six  months  ended  June  30,  1997  and  1996,
respectively.

                                       9
<PAGE>

                          FIELDS AIRCRAFT SPARES, INC.
                 FORMERLY KNOWN AS FIELDS INDUSTRIAL GROUP, INC.

            NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


1.       Summary of significant accounting policies (continued)

         i.       Income taxes

                  The Group  files  consolidated  income tax  returns.  Deferred
income taxes relate to temporary  differences  between  financial  statement and
income tax reporting of certain accrued expenses, state income taxes, bad debts,
inventory, and depreciation.

                  The Group adopted Statement of Financial  Accounting Standards
No. 109,  "Accounting  for Income Taxes".  SFAS 109 requires the  recognition of
deferred tax liabilities and assets for the expected future tax  consequences of
temporary  differences between tax basis and financial reporting basis of assets
and liabilities.  The income tax effect of the temporary  differences as of June
30, 1997 and December 31, 1996 consisted of the following:

                                                        1997              1996
                                                        ----              ----
    Deferred tax liability resulting from
      taxable temporary differences for
      accounting for inventory                   $  (314,000)     $  (314,000)
    Deferred tax asset resulting from
      deductible temporary differences
      for allowance for doubtful accounts              4,000           20,000
    Deferred tax asset resulting from
      deductible temporary differences
      for utilization of net operating loss
      carryforwards for income tax purposes        2,130,000        1,344,000
    Valuation allowance resulting from the
      potential nonutilization of net operating
      loss carryforwards for income tax
      purposes                                    (1,820,000)      (1,050,000)
                                                 -----------      -----------

             Total deferred income taxes         $    -           $    -
                                                 ===========      ===========

         j.       Employee benefit plan

                  FASC has a 401(k) Plan under  Section  401(k) of the  Internal
Revenue Code.  The Plan allows all employees who are not covered by a collective
bargaining agreement to defer up to 25% of their compensation on a pre-tax basis
through  contributions  to the  Plan.  Contributions  to the  Plan by  FASC  are
discretionary  and are  determined by the Board of Directors.  No  contributions
were made to the Plan during the six months ended June 30, 1997 and 1996.

                                       10
<PAGE>
                          FIELDS AIRCRAFT SPARES, INC.
                 FORMERLY KNOWN AS FIELDS INDUSTRIAL GROUP, INC.

            NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


1.       Summary of significant accounting policies (continued)

         k.       Use of estimates

                  The  preparation  of financial  statements in conformity  with
generally accepted  accounting  principles requires management to make estimates
and assumptions that affect the amounts reported in the financial statements and
accompanying notes. Management believes that the estimates utilized in preparing
its financial statements are reasonable and prudent. Actual results could differ
from these estimates.

2.       Shareholders' equity

                  FASI has  50,000  shares  authorized  of its  $.001  par value
preferred stock. At June 30, 1997 and December 31, 1996, there were no shares of
preferred stock issued or outstanding.  The preferred shares, if issued,  may be
granted the right to convert into common shares.  On liquidation,  the preferred
shares may be entitled to share in the liquidation  proceeds after  satisfaction
of creditors and prior to any  distribution  to the common  shareholders  to the
extent of the  preference  determined  by the Board of  Directors at the time of
issuance.

                  FASI has the  following  common  stock as of June 30, 1997 and
December 31, 1996:
                                                  1997               1996
                                                  ----               ----

                  Authorized                 2,000,000          2,000,000
                  Issued and outstanding     1,892,886          1,302,137
                  Par value                       $.05               $.05

                  All of the common shares have equal voting rights.  The common
shares have no  pre-emptive  or  conversion  rights,  no  redemption  or sinking
provisions, and are not liable for further call or assessment. Each common share
is entitled to share  ratably in any assets  available for  distribution  to the
common shareholders upon liquidation of the Group.

                  In  February  1995,  the Group owed  $7,658,000  to  McDonnell
Douglas  Corporation  (MDC). MDC canceled the debt in exchange for $850,000 plus
586,862 shares of Series A convertible preferred stock of FASC. This constituted
full and complete  satisfaction of the MDC debt. The agreement  provided for the
mandatory  exchange of the Series A preferred stock of FASC for 25% of the total
outstanding  common stock of FASI within 10 days  following  the date the common
stock is  approved  for  quotation  on, and is quoted for trading on, the Nasdaq
Stock  Market.  The Series A convertible  preferred  stock carried a liquidation
preference of $5,000,000;  which, in the event of a liquidation of FASC,  should
be paid to the holders of the Series A shares.

                                       11
<PAGE>
                          FIELDS AIRCRAFT SPARES, INC.
                 FORMERLY KNOWN AS FIELDS INDUSTRIAL GROUP, INC.

            NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


2.       Shareholders' equity (continued)

                  The Series A preferred  shares became  convertible into common
shares of the Company upon the approval of the common  shares for  quotation and
commencement of trading on Nasdaq as a Small Cap Market Security.  The Company's
common shares began  quotation on the Nasdaq  SmallCap Market on March 26, 1997.
On April 4,  1997 the MDC  Series A shares  were  exchanged  by MDC for  564,194
common shares.

                  In  February  1995,  FASC  obtained   financing  from  Norwest
Business Credit, Inc., (Norwest).  FASC obtained a line of credit in the maximum
amount of  $10,000,000.  The line of credit was  partially  used to pay the note
payable to the prior  lending bank and to pay $850,000 to MDC. All assets of the
Group are pledged as collateral.

                  In April 1997, the Company's wholly-owned subsidiaries entered
into separate Loan and Security Agreements for an aggregate of up to $10,000,000
with NationsCredit  Commercial Funding  ("NationsCredit")  at an annual interest
rate of prime plus 3%. NationsCredit advanced $6,717,000 on April 18, 1997 which
was used to repay the  obligations  owed to Norwest  and other fees  incurred in
connection  with  the  NationsCredit  loan  facility.  In  connection  with  the
NationsCredit  loan  facility,  the Company  issued  NationsCredit  an option to
acquire 40,000 common shares of the Company at a price of $6.25 per share.

                  In 1996,  FASI sold 317,785 shares of common stock and 158,893
warrants.  Each warrant  allows the holder to purchase one share of common stock
for $6.25.  The net proceeds were  $1,654,000  after deducting costs of $481,000
for underwriting and issuance.

                  In 1997,  FASI issued 26,555 shares of common stock and 41,129
warrants.  Each warrant  allows the holder to purchase one share of common stock
for $6.25. The costs of underwriting and issuance were $147,000.

                  In April 1996, the Group reached a final  settlement  with its
insurance  company.  Management elected to record a casualty gain as a result of
the January 1994  earthquake.  A gain of $949,000 was recorded in the  financial
statements in 1996 as a result of this transaction.

                                       12
<PAGE>
                          FIELDS AIRCRAFT SPARES, INC.
                 FORMERLY KNOWN AS FIELDS INDUSTRIAL GROUP, INC.

            NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

3.       Notes payable

                  The notes  payable  at June 30,  1997 and  December  31,  1996
consisted of the following:
<TABLE>
<CAPTION>
                                                                                             1997               1996
                                                                                             ----               ----
<S>                                                                             <C>                <C>
Note payable to NationsCredit, secured by all
    assets of the Group, interest at prime plus 3.0%
    (11.5% at June 30, 1997), payable monthly                                    $      8,314,000  $
Line of credit from Norwest, secured by all assets
    of the Group, interest at prime plus 7.0%
    (15.25% at December 31, 1996), payable monthly                                                         6,232,000
Note payable to bank, secured by land and
    building, payable monthly at $2,396 plus interest
    at prime plus 2% (10.5% and 10.25% at June 30,
    1997 and December 31, 1996), due February 1998                                        318,000            331,000
Other notes payable                                                                        87,000             28,000
                                                                                     ------------       ------------

             Total notes payable                                                 $      8,719,000  $       6,591,000
Less current portion                                                                      405,000          6,323,000
                                                                                      -----------         ----------

                Notes payable, net of current portion                            $      8,314,000  $         268,000
                                                                                       ==========        ===========
</TABLE>

       Principal  payment  requirements  on all  notes  payable  based  on terms
explained above are as follows:


                 YEAR ENDING      
                     JUNE 30,                                AMOUNT

                       1998                         $       405,000
                       1999                                    -
                       2000                               8,314,000
                   Thereafter                                  -

         Total interest  expense for the six months ended June 30, 1997 and 1996
amounted to $942,000 and $628,000, respectively. Total interest paid for the six
months  ended  June  30,  1997 and  1996  amounted  to  $573,000  and  $424,000,
respectively.

                                       13
<PAGE>
                          FIELDS AIRCRAFT SPARES, INC.
                 FORMERLY KNOWN AS FIELDS INDUSTRIAL GROUP, INC.

            NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


4.  Provision for income taxes

       The provision for income taxes for the six months ended June 30 consisted
of the following:

                                                   1997           1996
                                                   ----           ---- 
          CURRENT:
             State                             $  2,000       $  3,000
                                               --------       --------

             Total provision for income taxes  $  2,000       $  3,000
                                               ========       ========


                  Total  income  taxes paid in 1997 and 1996  amounted to $3,000
each year.  The Group has net  operating  loss  carryovers  available  to offset
future taxable  income.  The amount and expiration date of the carryovers are as
follows:


                  YEAR ENDING
                  DECEMBER 31,                 FEDERAL          STATE

                         1997             $                 $   814,000
                         1998                                   750,000
                         1999                                   580,000
                         2000                                   126,000
                         2001                                   120,000
                         2008                  942,000
                         2009                1,161,000
                         2010                  255,000
                         2011                  240,000
                         2012                  500,000


5.       Commitments

                  The Group  leases a  warehouse  and office  facility  under an
operating lease.

                                       14
<PAGE>
                          FIELDS AIRCRAFT SPARES, INC.
                 FORMERLY KNOWN AS FIELDS INDUSTRIAL GROUP, INC.

            NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


5.       Commitments (continued)

The minimum lease payments  required under operating  leases as of June 30, 1997
are as follows:

                  YEAR ENDING
                  DECEMBER 31,                  AMOUNT

                         1997              $         48,000
                         1998                       132,000
                         1999                       144,000
                         2000                       144,000
                         2001                       144,000
                     Thereafter                      84,000


                  Lease  expense for the six months ended June 30, 1997 and 1996
was $45,000 and $48,000, respectively.


6.       Related party transactions

                  The Group leases a small overseas  office  facility on a month
to month basis from an entity owned by certain officers of the Group.


7.       Stock option plans

                  The Group has two stock option plans for its employees.

                  Effective  November 29, 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  options  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, which includes FASI obtaining

                                       15
<PAGE>
                          FIELDS AIRCRAFT SPARES, INC.
                 FORMERLY KNOWN AS FIELDS INDUSTRIAL GROUP, INC.

            NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


7.       Stock option plans (continued)

sales during a 12-month  period of $7,500,000  and an average  closing price for
FASI's  Common  Shares  for a  three-month  period of $6.00,  $9.00 and  $12.00,
respectively,  for each  one-third of the options to vest. The options must vest
by November 1998 and 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 of FASI at a purchase  price of $3.00 per share  subject to
vesting  requirements,  which  include  FASI  obtaining  sales during a 12-month
period of $7,500,000 and at least one year continued  employment after the grant
of the option.  The options  must vest by  November  1998 and must be  exercised
within two years of vesting.

                  On April 2, 1997, FASI's 1997 Stock Option Plan was adopted to
enable FASI to issue up to 100,000 Common Shares to key employees, directors and
consultants at a price of $6.25 per share.  Half of the options are  exercisable
on April 2,  1998 and  the rest  are  exercisable  April 2,  1999.  The  options
expire on April 2, 2000.

                  The Company accounts for stock options under the provisions of
APB 25.  Since the  adjustments  which would be  necessary to show the effect of
these options on income under FAS 123 are either  indeterminable  or immaterial,
the information is not included in these financial statements.


8.       Contingency

                  In the  event of the death of a  Director  or  Officer  of the
Group,  the Group 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.

                                       16
<PAGE>


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

THREE MONTHS ENDED JUNE 30, 1997 AND JUNE 30, 1996

         Operations  of the Company and its  subsidiaries  for the three  months
ended  June 30,  1997  generated  an income of  $395,000  compared  to a loss of
$19,000 for the  comparable  period of 1996.  The increase in the income for the
three-month  period is  attributable  to an increase in sales and the  resulting
increase in gross profit.

         Sales for the three months ended June 30, 1997 were $2,941,000 compared
to $1,186,000  for the comparable  period of 1996, an increase of  approximately
148%.  The  Company  attributes  the  increase  in sales to the  success  of its
recently  introduced  after-market  aircraft  inventory  management  and  supply
program.  Under this program the Company  enters into  agreements  with aircraft
component  manufacturers to buy, at negotiated prices,  parts used in the repair
of  aircraft.  The Company then enters into  arrangements  with air carriers and
aircraft overhaul  facilities to supply these needed parts, using the customer's
own  maintenance  records to  forecast  demand.  Under this  program the Company
eliminates  the need for the air  carrier  to hold parts  inventories,  provides
timely access to parts to keep aircraft flying and allows the manufacturer  more
effective  scheduling of replacement part production and shipment.  The increase
in sales included an increase in after-market  aircraft inventory management and
supply sales and brokerage sales of 154.4% and in McDonnell Douglas  Corporation
("MDC") inventory sales of 133.8%.

         Costs of goods sold for the three-month  period ended June 30, 1997 and
1996 were $1,753,000 and $741,000,  respectively  (approximately  60% and 62% of
sales, respectively). The change in the gross margin percentage is a result of a
change in the product mix of sales as discussed in the previous paragraph.

         Operating  expenses  increased from $464,000 for the three months ended
June 30, 1996 to $793,000 for the three  months  ended June 30,  1997.  This was
principally attributable to the increase in sales activity.

         During the  quarter  ended June 30,  1996,  the  Company  recognized  a
nonrecurring  gain of $256,000 in connection with a certain  casualty  insurance
claim. There were no nonrecurring gains in the second quarter of 1997.  Interest
expense  decreased  from  $322,000 to $278,000 for the three month periods ended
June 30,  1996  and  June 30,  1997  respectively.  This was  attributable  to a
reduction  in  interest  rate as a result of the  refinancing  of the  Company's
primary loan with Norwest  Business  Credit Inc.  ("Norwest").  See  "Liquidity"
below.

         As a result of the  foregoing,  the Company had net income in the three
months  ended June 30,  1997 of  $115,000 as compared to net loss of $85,000 for
the same period in 1996, an increase of $200,000.

                                       17
<PAGE>

SIX MONTHS ENDED JUNE 30, 1997 AND JUNE 30, 1996

         Operations of the Company and its subsidiaries for the six months ended
June 30, 1997 generated an income of $405,000  compared to a loss of $51,000 for
the  comparable  period of 1996.  The  increase  in the income for the six month
period is  attributable  to an increase in sales and the  resulting  increase in
gross profit.

         Sales for the six months ended June 30, 1997 were  $5,030,000  compared
to $2,546,000  for the comparable  period of 1996, an increase of  approximately
97.5%. The increase in sales was made up by an increase in after-market aircraft
inventory  management  and  supply  sales  and  brokerage  sales  of 148% and an
increase in MDC inventory sales of 17.6%.

         Costs of goods sold for the six month  period  ended June 30,  1997 and
1996 were $2,988,000 and $1,356,000,  respectively (approximately 59% and 53% of
sales,  respectively).  The reduction in the gross margin percentage is a result
of a change in the product mix of sales described in the previous paragraph.

         Operating  expenses  increased from $1,241,000 for the six months ended
June 30, 1996 to  $1,637,000  for the six months ended June 30,  1997.  This was
principally attributable to the increase in sales activity.

         During the six months  ended June 30,  1996,  the Company  recognized a
nonrecurring  gain of $909,000 in connection with a certain  casualty  insurance
claim.  There were no  nonrecurring  gains in the first  half of 1997.  Interest
expense increased from $628,000 to $942,000 for the six month periods ended June
30, 1996 and June 30, 1997 respectively.  This was almost entirely  attributable
to an accelerated  amortization of original loan costs and other fees associated
with the refinancing of the Company's primary loan with Norwest. See "Liquidity"
below.  Of the net loss for the period of  $539,000,  approximately  $340,000 is
represented by  amortization  of loan costs and other fees  associated  with the
repayment of the Norwest  loan,  which was  recognized  in the first  quarter of
1997.

         Although  the  Company  had  an  increase  in  current   earnings  from
operations of $456,000,  the Company had a net loss in the six months ended June
30, 1997 of $539,000,  compared to net income of $227,000 for the same period in
1996,  a  decrease  of  $766,000,  most of that  difference  being a  result  of
non-recurring expenses during 1997 and 1996 non-recurring income as described in
the prior paragraph.

LIQUIDITY

         At June 30, 1997, the Company had working  capital  (current  assets in
excess of current debt) of $9,829,000  compared to working capital of $2,434,000
on December 31, 1996. The increase in liquidity is  attributable  principally to
an approximately  $5,918,000 decrease in short-term bank debt as a result of the
loan from Norwest  being  refinanced  with  long-term  debt (see  discussion  of
NationsCredit  loan  below).  During  the  same  period,  the  Company  also had
increases in cash of $490,000,  accounts  receivable of $407,000 and inventories
of $1,106,000  made possible by the  Company's  new long-term  credit  facility.
These  increases  were  partially  offset by an increase in accounts  payable of
$543,000  caused by the expansion of the Company's  purchase of  distributorship
inventory to support the increase in sales.

                                       18
<PAGE>

         Operating  activities  used  $1,188,000  and generated  $856,000 of the
Company's  cash flow for the six months  ended June 30,  1997 and June 30,  1996
respectively.  The  increase  in the cash used for the first six  months of 1997
compared to the same period of 1996 was mostly due to an increase of  $1,106,000
in inventories.

         On April 18, 1997, the Company's wholly-owned subsidiaries entered into
separate Loan and Security  Agreements for an aggregate of up to $10,000,000 for
a three-year term with NationsCredit Commercial Funding  ("NationsCredit") at an
annual  interest  rate of prime plus 3%.  NationsCredit  advanced  $6,717,000 on
April 18, 1997 which was used to repay the obligations owed to Norwest and other
fees incurred in connection with the NationsCredit loan facility.  In connection
with the NationsCredit loan facility, the Company issued NationsCredit an option
to acquire 40,000 common shares,  par value $.05 per shares, of the Company (the
"Common Shares") at a price of $6.25 per share.

CAPITAL RESOURCES

         On February 9, 1995,  the  Company's  wholly owned  subsidiary,  Fields
Aircraft Spares Incorporated ("FAS"),  entered into a line of credit arrangement
with Norwest  providing  for a line of credit in the amount of  $10,000,000.  At
April 18, 1997 when it was  refinanced  approximately  $6,308,000  of credit had
been extended under this line.

         On February 7, 1995, FAS owed MDC  $7,658,000.  In connection  with the
Norwest financing,  MDC cancelled that debt in exchange for $850,000 in cash and
586,862 shares of Series A Convertible Preferred Stock of FAS.

         The  Series A Shares  became  convertible  into  Common  Shares  of the
Company upon the approval of the Common Shares for quotation and commencement of
trading on Nasdaq as a SmallCap  Market  Security.  The Company's  Common Shares
began quotation on the Nasdaq SmallCap Market beginning March 26, 1997. On April
4, 1997 the MDC Series A Shares were exchanged for 564,194 Common Shares.

         During 1996 the Company began a private placement  transaction by means
of a private  placement  memorandum to  non-United  States  persons  pursuant to
Regulation S of the Securities Act of 1933, as amended (the  "Securities  Act").
164,283 Units (the "Units")  consisting of 328,566 Common Shares and warrants to
acquire 164,283 Common Shares at $6.25 per share (the  "Warrants") were sold for
$2,135,685  between  September 1996 and March 1997. The Warrants are exercisable
at anytime prior to the second anniversary of their issuance.  In addition,  the
placement  agent received  warrants to acquire 32,857 Common Shares at $6.25 per
share. Etablissement Pour le Placement Prive, Zurich, Switzerland,  acted as the
Company's  placement agent in connection with the offering.  After brokerage and
issuance costs, the sales resulted in a net infusion of capital of approximately
$1,735,000  through March 1997. For financial  accounting  purposes at March 31,
1997 an  additional  $182,000  has  been  offset  against  the  proceeds  of the
Regulation S offering as  additional  costs in  connection  with the issuance of
securities.

         In June,  1997, the Company also sold 15,774 Common Shares and warrants
to acquire 2,881 Common Shares at $6.25 per share, for approximately  $98,780 in

                                       19

<PAGE>

a private transaction under Regulation S of the Securities Act. The warrants are
exercisable at any time prior to the second anniversary of their issuance.

         On April 18, 1997, the Company's wholly-owned subsidiaries entered into
separate Loan and Security Agreements for an aggregate of up to $10,000,000 with
NationsCredit  at an  annual  interest  rate of  prime  plus  3%.  NationsCredit
advanced  $6,717,000 on April 18, 1997,  which was used to repay the obligations
owed to Norwest and other fees  incurred in  connection  with the  NationsCredit
loan  facility.  As of July 31,  1997,  $8,251,000  was  outstanding  under  the
NationsCredit  facility. In connection with the NationsCredit loan facility, the
Company  issued  NationsCredit  an option to acquire 40,000 common shares of the
Company at a price of $6.25 per share.

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

Forward-Looking Statements

         Statements  regarding  the  Company's  expectations  as to its  capital
resources and certain other information presented in this Form 10-QSB constitute
forward looking  statements  within the meaning of Section 27A of the Securities
Act of 1933,  as  amended,  and Section 21E of the  Securities  Act of 1934,  as
amended.  Although  the  Company  believes  that its  expectations  are based on
reasonable  assumptions  within the bounds of its  knowledge of its business and
operations,  there can be no assurance  that actual results will not differ from
its expectations. In addition to matters affecting the economy and the Company's
industry  generally,  factors  that could  cause  actual  results to differ from
expectations  include, but are not limited to, the following:  (i) the Company's
ability  to  obtain  future  financing  may be  adversely  affected  by its past
technical  defaults  on  its  debt  financing  and  its  uncertainty  of  future
profitability;  (ii) the  Company's  ability  to  acquire  other  businesses  in
familiar or allied  businesses  may be adversely  affected if the Company is not
able to raise additional capital and obtain any necessary debt financing;  (iii)
the Company's ability to raise additional  capital may be adversely  affected by
its  lack  of  trading   volume  and  the   Company's   uncertainty   of  future
profitability;  (iv) regulation by governmental authorities,  (v) growth or lack
of growth of the airline  industry,  (vi) the price and availability of aircraft
parts and other  materials,  (vii) the  Company's  ability to maintain  existing
customer or vendor  relationships,  (viii) successful execution of the Company's
expansion plans and (ix) competitive and pricing pressures.

                                       20
<PAGE>
                           PART II. OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS.

                  None

ITEM 2.  CHANGES IN SECURITIES.

                  On  April 2,  1997  the  Board  of  Directors  of the  Company
                  authorized  stock option contracts (the "Options") to purchase
                  100,000 Common Shares  issued to certain directors,  executive
                  officers  and  employees  of  the  Company.  The  Options  are
                  exercisable  for Common  Shares at a price of $6.25 per share.
                  Half of the Options are  exercisable  on April 2, 1998 and the
                  remainder are  exercisable  April 2, 1999.  The Options expire
                  April  2,  2000.  The  Options  are not  qualified  under  any
                  applicable tax laws or  regulations.  The Options were granted
                  pursuant  to  the  exemption  from  registration  provided  by
                  Section 4(2) of the  Securities  Act of 1933 (the  "Securities
                  Act") to a limited number of directors, executive officers and
                  employees.

                  On April 4, 1997, MDC exchanged its 586,862 shares of Series A
                  Convertible  Preferred  Stock of the Company's  subsidiary for
                  564,194   Common  Shares  of  the  Company   pursuant  to  the
                  Securities  Exchange  Agreement  between  the Company and MDC.
                  Such  shares  were  issued  pursuant  to  the  exemption  from
                  registration provided by Section 4(2) of the Securities Act.

                  On April 18,  1997,  the  Company  issued an option to acquire
                  40,000  Common  Shares  at a  price  of  $6.25  per  share  to
                  NationsCredit   Commercial   Funding    ("NationsCredit")   in
                  connection  with the closing of the Company's  credit facility
                  from  NationsCredit.  Such shares were issued  pursuant to the
                  exemption  from  registration  provided by Section 4(2) of the
                  Securities Act.

                  On or about June 27, 1997,  Fields Aircraft Spares,  Inc. (the
                  "Company") received and accepted a subscription  agreement for
                  the sale of 15,774  common  shares of the  Company,  par value
                  $.05 per share (the  "Common  Shares") and warrants to acquire
                  2,881 Common Shares at $6.25 per share (the  "Warrants"),  for
                  approximately  $98,780.  The Warrants are  exercisable  at any
                  time prior to the second  anniversary of their  issuance.  The
                  Securities were sold to Etablissement Pour Le Placement Prive,
                  Zurich Switzerland  ("EPP") in reliance on Regulation S of the
                  Securities Act of 1933  ("Regulation  S"). EPP has represented
                  to the  Company  that EPP is an  accredited  non-US  person as
                  defined in Regulation S.

                  EPP acted as the Company's  placement agent in connection with
                  a prior  Regulation S placement,  which  concluded in February
                  1997. In connection with that offering, the Company issued, on
                  or about June 26, 1997,  additional warrants to acquire 32,857
                  Common  Shares  at $6.25  per  share  (the  "Agent  Warrants")

                                       21
<PAGE>
                  pursuant to the terms of the Placement Agent Agreement,  dated
                  July 22,  1996,  between the Company and EPP, as amended.  The
                  Agent Warrants are exercisable at any time prior to the second
                  anniversary  of their  issuance.  The  issuance  of the  Agent
                  Warrants was made in reliance on Regulation S.

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES.  None

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

                  The Company held its Annual Meeting of  Shareholders on August
                  7,  1997  (the  "Annual  Meeting").  At  the  Annual  Meeting,
                  shareholders  (i) elected five (5) directors of the Company to
                  serve until the expiration of their  respective terms or until
                  their   successors  are  duly  elected  and  qualified;   (ii)
                  increased  the  number  of  authorized  common  shares  of the
                  Company,  par value $.05 per share (the "Common  Shares") from
                  2,000,000 to 5,000,000;  (iii) amended the Company's  Articles
                  of  Incorporation  (the  "Articles")  to provide for staggered
                  terms of directors  by dividing  the Board of  Directors  into
                  three groups;  (iv)  approved the Company's  1997 Stock Option
                  Plan; (v) and ratified the selection by the Board of Directors
                  of Moore  Stephens  Frazer &  Torbet,  LLP as the  independent
                  auditors of the Company for the 1997 fiscal year.

                  The following  list  summarizes  the number of votes cast for,
                  against or withheld,  as well as the number of abstentions and
                  broker  non-votes,  as to each  matter,  including  a separate
                  tabulation for each nominee to the board of directors.

================================================================================
                                             Votes Against     Abstentions and 
                            Votes For        (or withheld)     Broker Non-Votes
--------------------------------------------------------------------------------
Item 1 - Election of
Directors
--------------------------------------------------------------------------------
Peter Frohlich              1,475,864           113,300
--------------------------------------------------------------------------------
Alan M. Fields              1,475,864           113,300
--------------------------------------------------------------------------------
Lawrence J. Troyna          1,475,864           113,300
--------------------------------------------------------------------------------
Leonard I. Fields           1,475,864           113,300
--------------------------------------------------------------------------------
Mary Sprouse                1,475,864           113,300
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
Item 2 - Increase in          904,228            680,074           4,862
Number of Authorized
Common Shares
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
Item 3 - Amendment to       1,407,416           110,659           71,089
Articles of
Incorporation to 
adopt Staggered
Board
--------------------------------------------------------------------------------

                                       22
<PAGE>

--------------------------------------------------------------------------------
Item 4 - Approval of          834,966            677,293         76,905
1997 Omnibus
Stock Option Plan
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
Item 5 - Ratification of     1,473,232           113,060          2,872
Auditors
================================================================================


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.

                           Exhibit 3.1.1    Articles of Amendment

                           Exhibit 3.2.1    Amended and Restated Bylaws

                           Exhibit 27       Financial Data Schedule

                  (b)  Reports on Form 8-K

                           The  Company  filed a report on Form 8-K,  dated June
                           26, 1997, covering Item 9, Sales of Equity Securities
                           Pursuant to  Regulation  S of the  Securities  Act of
                           1933, as Amended.

                                       23

<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: August 12, 1997


                                        FIELDS AIRCRAFT SPARES, INC.



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



                                          By: /s/ Lawrence J. Troyna
                                             --------------------------
                                             Lawrence J. Troyna, Principal
                                             Financial Officer

                                       24