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 March 31, 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                      1,877,112 Common Shares
                                                     at April 23, 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.............................................16


Part II. - Other Information

    Item 1.  Legal Proceedings..................................20
    Item 2.  Changes in Securities..............................20
    Item 3.  Defaults upon Senior Securities....................20
    Item 4.  Submission of Matters to a Vote
                     of Security Holders........................20
    Item 5.  Other Information..................................20
    Item 6.  Exhibits and Reports on Form 8-K...................20



                                        2

<PAGE>

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

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

                                     ASSETS

<TABLE>
<CAPTION>
                                                                                        1997                   1996
                                                                                        ----                   ----
 CURRENT ASSETS:
<S>                                                                            <C>                  <C>
      Cash                                                                      $    132,000           $     88,000
      Accounts receivable, less allowance for doubtful
          accounts of $100,000 in 1997 and $50,000 in
          1996                                                                     1,378,000              1,507,000
      Inventory                                                                    8,397,000              8,108,000
      Prepaid expenses                                                               130,000                149,000
                                                                                ------------           ------------
                  Total current assets                                          $ 10,037,000           $  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                                                        549,000                548,000
                                                                                ------------           ------------
                  Totals                                                        $  1,820,000           $  1,819,000
      Less accumulated depreciation and amortization                                 765,000                734,000
                                                                                ------------           ------------
                      Land, building and equipment, net                         $  1,055,000           $  1,085,000
                                                                                ------------           ------------

   OTHER ASSETS:
      Debt issuance costs, net of accumulated
           amortization                                                         $    185,000           $    300,000
      Other assets                                                                   213,000                262,000
                                                                                ------------           ------------
                    Total other assets                                          $    398,000           $    562,000
                                                                                ------------           ------------
                        Total assets                                            $ 11,490,000           $ 11,499,000
                                                                                ============           ============

                      LIABILITIES AND SHAREHOLDERS' EQUITY
<CAPTION>

   CURRENT LIABILITIES:
<S>                                                                            <C>                       <C>
      Accounts payable                                                          $  1,390,000           $    864,000
        Other accrued liabilities                                                    573,000                230,000
        Income taxes payable                                                           1,000                  1,000
        Current portion of notes payable                                             324,000              6,323,000
                                                                                ------------           ------------
                    Total current liabilities                                   $  2,288,000           $  7,418,000
                                                                                ------------           ------------

   LONG-TERM LIABILITIES                                                        $  6,143,000           $    268,000
                                                                                ------------           ------------
   SHAREHOLDERS' EQUITY:
        Common stock                                                            $    313,000           $    312,000
        Additional paid-in capital                                                 4,964,000              5,065,000
        Retained deficit                                                          (2,218,000)            (1,564,000)
                                                                                ------------           ------------
                    Total shareholders' equity                                  $  3,059,000           $  3,813,000
                                                                                ------------           ------------
                        Total liabilities and shareholders'
                           equity                                               $ 11,490,000           $ 11,499,000
                                                                                ============           ============
</TABLE>
                                       3

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

                 UNAUDITED CONSOLIDATED STATEMENT OF OPERATIONS
                FOR THE THREE MONTHS ENDED MARCH 31.1997 AND 1996


<TABLE>
<CAPTION>


                                                               1997                    1996
                                                               ----                    ----
<S>                                                     <C>                      <C>
        SALES                                           $ 2,089,000             $ 1,360,000

        COST OF SALES                                     1,235,000                 615,000
                                                        -----------             -----------
        GROSS PROFIT                                    $   854,000             $   745,000

        OPERATING EXPENSES                                  844,000                 777,000
                                                        -----------             -----------
        INCOME (LOSS) FROM OPERATIONS                   $    10,000             $   (32,000)
                                                        -----------             -----------
        OTHER EXPENSE (INCOME):,
           Casualty gain                                $      -                $  (653,000)
           Interest expense, net                            664,000                 306,000
                                                        -----------             -----------
                      Total other expense (income)      $   664,000             $  (347,000)
                                                        -----------             -----------
          (LOSS) INCOME BEFORE PROVISION FOR
             INCOME TAXES                               $  (654,000)            $   315,000

          PROVISION FOR INCOME TAXES                           -                      3,000
                                                        -----------             -----------
          NET (LOSS) INCOME                             $  (654,000)            $   312,000
                                                        ===========             ===========
          NET (LOSS) INCOME PER SHARE                   $      (.29)            $       .21
                                                        ===========             ===========
</TABLE>
                                       4

<PAGE>

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

                 UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOWS
               FOR THE THREE MONTHS ENDED MARCH 31, 1997 AND 1996

<TABLE>
<CAPTION>

                                                                              1997                     1996
                                                                              ----                     ----
    CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                                  <C>                      <C>
          Net (loss) income                                            $  (654,000)             $   312,000

          Adjustments to  reconcile  net (loss)  income to net cash  provided by
             (used in) operating activities:
          Depreciation and amortization                                     31,000                   31,000
          Amortization of debt issuance costs                              230,000                   48,000
          Decrease (increase) in accounts receivable                       129,000                 (513,000)
          Increase in inventory                                           (289,000)                (171,000)
          Decrease in prepaid expenses                                      19,000                    2,000
          Increase in other assets                                                                  (38,000)
          Increase in accounts payable                                     526,000                  171,000
          Increase in other accrued liabilities                            343,000                   71,000
                                                                       -----------               ----------
             Net cash provided by (used in) operating activities       $   335,000               $  (87,000)
                                                                       -----------               ----------
      CASH FLOWS FROM INVESTING ACTIVITIES:

          Purchase of equipment                                        $    (1,000)              $   (3,000)
                                                                       -----------               ----------
      CASH FLOWS FROM FINANCING ACTIVITIES:
           Net (payments) borrowings on line of credit                 $   (89,000)              $   75,000
           Principal payments on notes payable                             (35,000)                  (8,000)
           Costs associated with issuance of notes payable                (115,000)
           Proceeds from issuance of common stock                           81,000


           Costs associated with the issuance of common stock             (132,000)
                                                                       -----------               ----------
               Net cash (used in) provided by financing activities     $  (290,000)              $   67,000
                                                                       -----------               ----------
      NET INCREASE (DECREASE) IN CASH                                  $    44,000               $  (23,000)

      CASH, December 31, 1996 and 1995                                      88,000                  111,000
                                                                       -----------               ----------
      CASH, March 31, 1997 and 1996                                    $   132,000               $   88,000
                                                                       ===========               ==========
</TABLE>

                                       5
<PAGE>

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

                  UNAUDITED STATEMENT OF SHAREHOLDERS' EQUITY
               FOR THE THREE MONTHS ENDED MARCH 31, 1997 AND 1996


<TABLE>
<CAPTION>

                                 COMMON STOCK
                           ---------------------------
                            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

Net income                                                                    312,000           312,000
                               -------       ----------    -----------    -----------       -----------

BALANCE, March 31, 1996        984,352       $  297,000    $ 1,376,000    $(1,010,000)      $   663,000
                               =======       ==========    ===========    ===========       ===========

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

Sale of common stock            10,781            1,000       (101,000)                        (100,000)

Net loss                                                                     (654,000)         (654,000)
                             ---------       ----------    -----------    -----------       -----------
BALANCE, March 31, 1997      1,312,918       $  313,000    $ 4,964,000    $(2,218,000)      $ 3,059,000
                             =========       ==========    ===========    ===========       ===========
</TABLE>

                                       6

<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
26.9% of total  sales  for the  three  months  ended  March  31,  1997 and 1996,
respectively.

             For the three months ended March 31, 1997, two customers  accounted
for sales of $273,000 and  $135,000.  For the three months ended March 31, 1996,
one customer accounted for $251,000 of sales.

                                       7
<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 three months ended
March 31, 1997 and 1996 amounted to $31,000 for each period.

             f.        Debt issuance costs

            The debt issuance costs relate to the issuance of the new financing.
Amortization  of debt  issuance  costs for the three months ended March 31, 1997
and 1996 amounted to $230,000 and $48,000, 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.

             Earnings  per share was  computed  using  2,249,589  and  1,312,469
shares for the three months ended March 31, 1997 and 1996, respectively.

                                       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)

              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 other assets and  liabilities.  The income tax effect of the  temporary
differences  as of March  31,  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        1,920,000       1,344,000
     Valuation allowance resulting from the
         potential nonutilization of net operating
         loss carryforwards for income tax
         purposes                                    (1,610,000)     (1,034,000)
                                                    -----------     -----------
                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 three months ended March 31, 1997 and 1996.

                                       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)

         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 March  31,  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 7 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 March 31, 1997 and December
31, 1996:
                                        1997                1996
                                        ----                ----
           Authorized                 2,000,000          2,000,000
           Issued and outstanding     1,312,918          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 carries 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.

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

            NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


2.         Shareholders' equity (continued)

           On  April  17,   1996  the   Securities   and   Exchange   Commission
("Commission")  notified FASI that it had no further comments on the Form  1O-SB
that had been filed with the Commission on October 30, 1995. MDC was notified of
such event and accordingly  filed a Form 3 and Schedule 13-D with the Commission
claiming  beneficial  ownership  in common  shares of FASI based on its right to
convert Series A convertible preferred stock for 25% of the common stock of FASI
on a fully-diluted basis. FASI had stated to the Commission in writing that upon
MDC's  filing of the  Schedule  13-D or  similar  filing  indicating  beneficial
ownership in FASI,  FASI's financial  statements  would  thereafter  reflect the
acquisition  of the minority  interest.  Accordingly,  the financial  statements
reported the acquisition of the minority interest as additional  paid-in capital
even though the common  shares of FASI have not,  and will not, be issued  until
the Series A preferred shares of FASC have been converted.

           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 Small Cap Market on March 26, 1997.
On April 4,  1997 the MDC  Series A shares  were  exchanged  by MDC for  564,194
common shares.

           On  February  9, 1995,  FASC  obtained  new  financing  from  Norwest
Business Credit, Inc., (Norwest).  FASC obtained a line of credit in the maximum
amount of $1 0,000,000.  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.

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

            NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS



2.      Shareholders' equity  (continued)

                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.

                In 1996,  FASI sold  317,785  shares of common stock and 159,000
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.

                During the three months  ended March 31, 1997,  FASI sold 10,781
shares of common stock and 5,000  warrants.  Each  warrant  allows the holder to
purchase  one share of common  stock for $6.25.  The costs of  underwriting  and
issuance were $201,000.

                In 1997, FASI issued 32,000  warrants for services  rendered for
the sale of its common  stock.  Each  warrant  allows the holder to purchase one
share of common stock for $6.25.


3.      Notes payable

                The  notes  payable  at  March 31, 1997  and December  31,  1996
consisted of  the following:
                                                          1997             1996
                                                          ----             ----
Line of credit from Norwest, secured by all 
  assets of the Group, interest at prime 
  plus 8.0% and 7.0% (16.5% and 15.25% at 
  March 31, 1997 and December 31, 1996), 
  payable monthly                                  $ 6,143,000      $ 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 March 31, 1997 and December 31, 1996),
  due February 1998                                    324,000          331,000
Other notes payable                                      -               28,000
                                                   -----------      -----------
         Total notes payable                       $ 6,467,000      $ 6,591,000
Less current portion                                   324,000        6,323,000
                                                   -----------      -----------
           Notes payable, net of current portion   $ 6,143,000      $   268,000
                                                   ===========      ===========

                                       12
<PAGE>

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

            NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


3.       Notes payable (continued)

             As  explained in footnote 2, the  obligations  to Norwest have been
refinanced with NationsCredit as of April 18, 1997. This credit facility enabled
the Company to refinance short-term debt on a long-term basis. Accordingly,  the
borrowings from Norwest have been reclassified as long-term debt.

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

               YEAR ENDING    
                 MARCH 31,                    AMOUNT
               ------------                 ---------
                   1998                     $  324,000
                   1999                          -
                   2000                      6,143,000
                Thereafter                       -

         Total  interest  expense for the three  months ended March 31, 1997 and
1996 amounted to $664,000 and $306,000,  respectively.  Total  interest paid for
the three  months  ended  March  31,  1997 and 1996  amounted  to  $434,000  and
$246,000, respectively.


4.       Provision for income taxes

         The provision  for  income  taxes for the  three months ended March 31,
consisted of the following:

                                                           1997         1996
          CURRENT:
             State                                     $    -      $   3,000
                                                       ---------   ---------
             Total provision for income taxes          $    -      $   3,000
                                                       =========   =========

                                       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 (continued)

                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


5.       Commitments

                The  Group  lease  a  warehouse  and  office  facility  under an
operating lease.  The Minimum lease  payments required under operating leases as
of March 31, 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 three months ended March 31, 1997 and 1996
was $34,000 and $24,000, respectively.

                                       14

<PAGE>


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.

                  In November  1995,  FASI issued  options to  employees  to the
Group to acquire up to 82,525 common shares of FASI at a purchase price of $3.00
per share  subject to certain  requirements.  The options  must vest by November
1998.

                  In April 1997,  FASI issued  options to employees of the Group
to acquire up to 100,000  common shares of FASI at a purchase price of $6.25 per
share.


7.       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.

                                       15

<PAGE>

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

THREE MONTHS ENDED MARCH 31, 1997 AND MARCH 31, 1996

         Operations  of the Company and its  subsidiaries  for the three  months
ended  March 31,  1997  generated  an income of  $10,000  compared  to a loss of
$32,000 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  March  31,  1997  were  $2,089,000
compared  to  $1,360,000  for the  comparable  period of 1996,  an  increase  of
approximately   54%.   The   increase  in  sales  was  due  to  an  increase  in
distributorship  and  brokerage  sales of 138.7% and a decrease in MDC inventory
sales of 35.1%. The increase in distributorship  and brokerage sales is expected
to continue and the decrease in MDC inventory sales is expected to level off.

         Costs of goods sold for the three-month period ended March 31, 1997 and
1996 were $1,235,000 and $615,000,  respectively  (approximately  59% and 45% of
sales,  respectively).  The reduction in the gross margin percentage is a result
of the  increasing  proportion  of total  sales  represented  by  brokerage  and
distributorship  transactions  as opposed to MDC  inventory  where  margins  are
larger.

         Operating  expenses  increased from $777,000 for the three months ended
March 31, 1996 to $844,000 for the three  months ended March 31, 1997.  This was
principally  attributable to an increase in the provision for doubtful  accounts
of $50,000.

         During the quarter  ended March 31,  1996,  the  Company  recognized  a
nonrecurring  gain of $653,000 in connection with a certain  casualty  insurance
claim. There were no nonrecurring  gains in the first quarter of 1997.  Interest
expense  increased  from  $306,000 to $664,000 for the three month periods ended
March  31,  1996 and March  31,  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
Business Credit Inc. ("Norwest"). See "Liquidity" below. Of the net loss for the
period of $654,000,  approximately  $340,000 is represented by  amortization  of
loan costs and other fees associated with the repayment of the Norwest loan.

         Although  the Company had an increase in earnings  from  operations  of
$42,000, the Company, as a result of the foregoing,  had a net loss in the three
months ended March 31, 1997 of  $654,000,  as compared to net income of $312,000
for the same period in 1996, a decrease of $966,000.

LIQUIDITY

         At March 31, 1997, the Company had working  capital  (current assets in
excess of  current  bank debt) of  $7,749,000  compared  to  working  capital of
$2,434,000  on December  31, 1996.  The  increase in  liquidity is  attributable
principally to an approximately $5,999,000 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).  This  increase  in  liquidity  was

                                16

<PAGE>

partially  offset by an increase in accounts  payable of $564,000  caused by the
expansion of the Company's purchases of distributorship inventory to support the
increase in sales.

         Operating  activities  generated  $335,000  and  used  $87,000  of  the
Company's  cash flow for the three  months  ended  March 31,  1997 and March 31,
1996,  respectively.  The  increase  in the cash  generated  for the first three
months of 1997 compared to the same period of 1996 was mostly due to an increase
in accounts payable and other accrued liabilities.

         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 share,  of the Company (the
"Common Shares") at a price of $6.25 per share.

CAPITAL RESOURCES

         The Company's  operations to date have been  primarily  funded  through
bank loans and vendors deferred purchase note.

         The Company had no commitments of capital  resources at March 31, 1997.
On February 9, 1995,  the Company,  through  FAS,  entered into a line of credit
arrangement  with  Norwest  providing  for a line of  credit  in the  amount  of
$10,000,000.  At March 31,  1997,  approximately  $6,143,000  of credit had been
extended under the credit line of $10,000,000.

         The Norwest credit line of $10,000,000  was initially  divided into two
areas: an $8,000,000  inventory line and a $2,000,000  accounts receivable line.
Commencing  April 1995 the available  inventory  credit  reduced by $100,000 per
month. The available  accounts  receivable credit could increase up to a maximum
of  $10,000,000  depending on the amount of accounts  receivable;  however,  the
total of the  inventory  line and  accounts  receivable  line  could not  exceed
$10,000,000.  The Fourth Amendment reduced the maximum amount outstanding at any
time to $6,900,000 with monthly reductions of $250,000 commencing October 1996.

         Subsequent  to the year end,  the  Fifth,  Sixth,  Seventh  and  Eighth
Amendments to the Credit  Agreement were signed which reduced the maximum amount
permitted  to  be  outstanding  to   $6,150,000,   $6,100,000,   $6,081,000  and
$6,131,000, respectively.

         On February 7, 1995,  the  Company's  wholly owned  subsidiary,  Fields
Aircraft Spares Incorporated  ("FAS") owed McDonnell Douglas Corporation ("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.

         During 1996 MDC filed with the Securities and Exchange  Commission (the
"SEC") a Schedule  13-D  evidencing  its  beneficial  ownership  in the Company.
Accordingly,  although the Series A Shares were not converted into Common Shares

                                        17
<PAGE>

of the Company  prior to December 31, 1996,  the December 31, 1996 and March 31,
1997 financial  statements have been prepared as if such conversion had occurred
and the minority interest was reclassified as additional paid-in capital.

         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.  164,283 units (the "Units")  representing
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  $1,654,000  at  December  31,  1996 and
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.

         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.  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 equity  capital  infusions.
Unless operations of the Company generate a profit,  additional  capital will be
needed to continue operations in the future or operations may be reduced.  There
is no assurance the Company will be successful in securing additional capital.

          In  addition,  the Company  will seek to acquire  other  companies  in
similar  or allied  businesses.  Any such  acquisition  will only be  undertaken
following  a  careful  analysis  of the  potential  acquisition,  any  potential
synergism  with the  Company's  existing  business and the capital  needs of the
acquired  products  compared to the capital  needs and resources of the Company.
There is no assurance that any acquisitions will be successfully completed.

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  the  Private  Securities
Litigation  Reform  Act  of  1995.   Although  the  Company  believes  that  its
expectations  are  based on  reasonable  assumptions  within  the  bounds of its

                                       18

<PAGE>

knowledge of its business and operations,  there can be no assurance that actual
results will not differ materially 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 similar 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,  and (v)
growth or lack of growth of the airline industry.

                                      19

<PAGE>

                           PART II. OTHER INFORMATION

         ITEM 1.  LEGAL PROCEEDINGS.

                  None

         ITEM 2.  CHANGES IN SECURITIES.

                  On March 27, 1997,  the Board of Directors of the Company (the
                  "Board")  approved  a stock  option  plan and  authorized  the
                  issuance of options  pursuant to that plan to purchase 100,000
                  Common  Shares to  directors,  executive  officers and certain
                  employees of the Company subject to shareholder  approval.  On
                  April 2, 1997 that plan and the stock option grants authorized
                  in connection  with the plan were  cancelled by the Board.  On
                  April 2, 1997 the Board authorized stock option contracts (the
                  "Options")  to purchase  100,000  Common  Shares issued to the
                  same  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.

          TEM 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
                  
                       Exhibit 27 - Financial Data Schedule       

                                       20

<PAGE>

                           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.

                  (b)  Reports on Form 8-K

                           The  Company  filed  a  report  on  Form  8-K,  dated
                           February  11, 1997, covering  Item 9, Sales of Equity
                           Securities Pursuant to Regulation S.

                                       21

<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: May 14, 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


                                       22