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 September 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                    1,912,886 Common Shares
                                                   at October 14, 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.........................6
                           Statement of Shareholders' Equity...............7
                           Notes to Financial Statements...................8


         Item 2.  Management's Discussion and Analysis of
                           Financial Condition and Results of
                           Operations.....................................16


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 SEPTEMBER 30, 1997 AND DECEMBER 31, 1996

                                   A S S E T S

                                                                                         1997                      1996
                                                                                         ----                      ----
CURRENT ASSETS:
<S>                                                                              <C>                     <C>
     Cash                                                                        $        9,322,000      $          88,000
     Accounts receivable, less allowance for doubtful
         accounts of $100,000 in 1997 and $50,000 in 1996                                 2,260,000              1,507,000
     Inventory                                                                           10,165,000              8,108,000
     Prepaid expenses                                                                       170,000                149,000
                                                                                 ------------------      -----------------
                  Total current assets                                           $       21,917,000      $       9,852,000
                                                                                 ------------------      -----------------

LAND, BUILDING AND EQUIPMENT:
     Land                                                                        $          210,000      $         210,000
     Building and building improvements                                                   1,065,000              1,061,000
     Furniture and equipment                                                                564,000                548,000
                                                                                 ------------------      -----------------
                  Totals                                                         $        1,839,000      $       1,819,000
     Less accumulated depreciation and amortization                                         825,000                734,000
                                                                                 --------------          -----------------
                      Land, building and equipment, net                          $        1,014,000      $       1,085,000
                                                                                 ------------------      -----------------

OTHER ASSETS:
     Debt issuance costs, net of accumulated amortization                        $        1,591,000      $         300,000
     Other    assets                                                                        547,000                262,000
                                                                                 ------------------      -----------------
                  Total other assets                                             $        2,138,000      $         562,000
                                                                                 ------------------      -----------------
                      Total assets                                               $       25,069,000      $      11,499,000
                                                                                 ==================      =================

                      LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
     Accounts payable                                                            $        1,983,000      $         864,000
     Other accrued liabilities                                                              320,000                230,000
     Income taxes payable                                                                     7,000                  1,000
     Current portion of notes payable                                                       371,000              6,323,000
                                                                                 ------------------      -----------------
                  Total current liabilities                                      $        2,681,000      $       7,418,000
                                                                                 ------------------      -----------------

LONG-TERM LIABILITIES                                                            $       18,779,000      $         268,000
                                                                                 ------------------      -----------------

SHAREHOLDERS' EQUITY:
     Common stock                                                                $          342,000      $        312,000
     Additional paid-in capital                                                           5,207,000             5,065,000
     Retained equity (deficit)                                                           (1,940,000)           (1,564,000)
                                                                                 ------------------      ----------------
                  Total shareholders' equity                                     $        3,609,000      $      3,813,000
                                                                                 ------------------      ----------------
                      Total liabilities and shareholders' equity                 $       25,069,000      $     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 SEPTEMBER 30, 1997 AND 1996

                                                                                1997                      1996
                                                                                ----                      ----
<S>                                                                        <C>                      <C>
SALES                                                                      $     3,414,000          $      1,612,000
COST OF SALES                                                                    2,148,000                   741,000
                                                                           ---------------          ----------------

GROSS PROFIT                                                               $     1,266,000          $        871,000
OPERATING EXPENSES                                                                 791,000                   611,000
                                                                           ---------------          ----------------
INCOME FROM OPERATIONS                                                     $       475,000          $        260,000
                                                                           ---------------          ----------------
 INTEREST EXPENSE, NET                                                     $       307,000          $        341,000
                                                                           ---------------          ----------------

INCOME (LOSS) BEFORE PROVISION FOR
    INCOME TAXES                                                           $       168,000          $        (81,000)

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

NET INCOME (LOSS)                                                          $       161,000          $        (81,000)
                                                                           ===============          ================

NET INCOME (LOSS) PER SHARE (fully-diluted basis)                          $           .06          $           (.05)
                                                                           ===============          ================

NET INCOME (LOSS) PER SHARE (primary basis)                                $           .06          $           (.05)
                                                                           ===============          ================
</TABLE>
                                       4

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

                                    UNAUDITED CONSOLIDATED STATEMENT OF OPERATIONS
                                FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996

                                                                                  1997                         1996
                                                                                  ----                         ----
<S>                                                                        <C>                      <C>
SALES                                                                      $       8,444,000        $      4,158,000
COST OF SALES                                                                      5,136,000               2,097,000
                                                                           -----------------        ----------------

GROSS PROFIT                                                               $       3,308,000        $      2,061,000
OPERATING EXPENSES                                                                 2,428,000               1,852,000
                                                                           -----------------        ----------------
INCOME FROM OPERATIONS                                                     $         880,000        $        209,000
                                                                           -----------------        ----------------
OTHER EXPENSE (INCOME):
    Casualty gain                                                          $        -               $       (909,000)
    Interest expense, net                                                          1,249,000                 969,000
                                                                           -----------------        ----------------

          Total other expense                                              $       1,249,000        $         60,000
                                                                           -----------------        ----------------

(LOSS) INCOME BEFORE PROVISION FOR
    INCOME TAXES                                                           $        (369,000)       $        149,000

PROVISION FOR INCOME TAXES                                                             7,000                   3,000
                                                                           -----------------        ----------------

NET (LOSS) INCOME                                                          $        (376,000)       $        146,000
                                                                           =================        ================

NET (LOSS) INCOME PER SHARE (fully-diluted basis)                          $            (.18)       $            .09
                                                                           =================        ================

NET (LOSS) INCOME PER SHARE (primary basis)                                $            (.18)       $            .09
                                                                           =================        ================
</TABLE>
                                       5

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

                                   UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOWS
                                FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996

                                                                                  1997                   1996
                                                                                  ----                   ----
CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                                    <C>                      <C>
     Net (loss) income                                                 $        (376,000)       $       146,000
     Adjustments to reconcile net income to net cash
        (used in) provided by operating activities:
     Depreciation and amortization                                                91,000                 90,000
     Amortization of debt issuance costs                                         410,000                158,000
     Loss on sale of or damage to assets                                                                 51,000
     (Increase) decrease in accounts receivable                                 (753,000)                93,000
     Increase in inventory                                                    (2,057,000)              (344,000)
     Increase in prepaid expenses                                                (21,000)               (12,000)
     Increase in other assets                                                   (138,000)               (74,000)
     Increase in accounts payable                                              1,119,000                281,000
     Increase in other accrued liabilities                                        90,000                117,000
     Increase in income taxes payable                                              6,000
                                                                       -----------------

        Net cash (used in) provided by operating activities            $      (1,629,000)       $       506,000
                                                                       -----------------        ---------------

CASH FLOWS FROM INVESTING ACTIVITIES:
     Purchase of equipment                                             $         (20,000)       $       (14,000)
                                                                       -----------------        ---------------

CASH FLOWS FROM FINANCING ACTIVITIES:
     Net payments on line of credit                                    $      (6,232,000)       $      (799,000)
     Principal payments on notes payable                                         (19,000)              (178,000)
     Borrowings on notes payable                                              18,810,000                 58,000
     Costs associated with issuance of notes payable                          (1,881,000)
     Net proceeds from issuance of common stock                                  352,000              1,390,000
     Costs associated with the issuance of common stock                         (147,000)
                                                                       -----------------        ---------------

        Net cash provided by financing activities                      $      10,883,000        $       471,000
                                                                       -----------------        ---------------

NET INCREASE IN CASH                                                   $       9,234,000        $       963,000

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

CASH, September 30, 1997 and 1996                                      $       9,322,000        $     1,074,000
                                                                       =================        ===============
</TABLE>
                                       6

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

                                                      UNAUDITED STATEMENT OF SHAREHOLDERS' EQUITY
                                                 FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996




                                           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

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

Issuance of Common Stock              264,019           13,000          1,377,000                         1,390,000      
Net income                                                                                 146,000          146,000
                                     --------       ----------       ------------      -----------      -----------

BALANCE, September 30, 1996          1,248,371       $ 310,000       $  4,803,000      $(1,176,000)     $ 3,937,000
                                      =======        =========       ============      ===========      ===========


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

Issuance of common stock              605,749           30,000            142,000                           172,000

Net loss                                                                                  (376,000)        (376,000)
                                    ---------        ---------       ------------      -----------      -----------

BALANCE, September 30, 1997         1,907,886        $ 342,000       $  5,207,000      $(1,940,000)     $ 3,609,000
                                    =========        =========       ============      ===========      ===========
</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
and0 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 commercial  aviation  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 13%
and 26% of total sales for the nine months  ended  September  30, 1997 and 1996,
respectively.

                  For the nine months ended  September  30, 1997,  two customers
accounted  for sales of  $1,207,000  and  $1,063,000.  For the nine months ended
September 30, 1996, one customer accounted for $287,000 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 nine months  ended
September 30, 1997 and 1996 amounted to $91,000 and $90,000, respectively.

         f.       Debt issuance costs

                  Gross debt issuance costs of $1,661,000  less  amortization of
$70,000 relate to the issuance of new financing.  Amortization  of debt issuance
costs for the nine months ended September 30, 1997 and 1996 amounted to $410,000
and  $158,000,  respectively.  The  costs  are  amortized  over  the life of the
respective loans.

         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 2,118,434
and  1,598,502  shares for the nine months  ended  September  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
September 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            2,330,000      1,344,000
   Valuation allowance resulting from the
     potential nonutilization of net operating
     loss carryforwards for income tax
     purposes                                        (2,020,000)    (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 nine months ended September 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 September  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 September 30, 1997
and December 31, 1996:
                                                     1997            1996
                                                     ----            ----

                  Authorized                      5,000,000        2,000,000
                  Issued and outstanding          1,907,886        1,302,137
                  Par value                            $.05             $.05

                  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  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 of FASI.

                                       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 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 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% (see  notes  payable  section).  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 the first six months of 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 the third quarter of 1997,  FASI issued  another  15,000 of
common stock in association with the issue of $10,000,000 at 8.50%  subordinated
debentures (see below).


3.       Notes payable
<TABLE>
<CAPTION>

                  The notes  payable at September 30, 1997 and December 31, 1996
consisted of the following:
                                                                   1997               1996
                                                                   ----               ----
<S>                                                         <C>                <C>   
Subordinated debenture with fixed interest at 8.50%
    per annum, payable semi-annually                         $     10,000,000  $        -
Note payable to NationsCredit, secured by all
    assets of the Group, interest at prime plus 3.0%
    (11.50% at September 30, 1997), payable monthly                 8,779,000
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% (10.50% and 10.25% at September 30,
    1997 and December 31, 1996), due February 1998                    312,000            331,000
Other notes payable                                                    59,000             28,000
                                                             ----------------  -----------------
             Total notes payable                             $     19,150,000  $       6,591,000
Less current portion                                                  371,000          6,323,000
                                                             ----------------  -----------------

                Notes payable, net of current portion        $     18,779,000  $         268,000
                                                             ================  =================
</TABLE>
                                       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 of  September  30,  1997  the  Company  closed  the sale of
$10,000,000 principal amount of its 8.50% Subordinated Redeemable Debentures due
2000 issued  under an  Indenture,  dated as of  September  30, 1997  between the
Company and  Establissement  Pour le Placement Prive as Trustee.  The Securities
were sold in reliance on Regulation S of the  Securities Act of 1933 to entities
which represented to the Company to be accredited non-U.S. persons as defined in
Regulation S.

                  The Debenture  holders will have a one-time  right at any time
after December 29, 1997 through September 27, 2000,  subject to prior redemption
or  repurchase,  to convert up to 30% of the  principal  amount of such holder's
Debentures  into  Common  Shares,  par value $.05 per share of the  Company at a
conversion  price equal to 85% of the average closing price of the Common Shares
during the 20-trading day period ending on the date of notice of conversion, but
in no event  less than  $12.00 per  share.  In the event that  during any 20-day
trading period, the average closing price of the Common Shares equals or exceeds
$12.00 per share,  the Company may  require the  conversion  of up to 20% of the
principal amount of outstanding Debentures at the Conversion Price.

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

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


                 YEAR ENDING
                SEPTEMBER 30,                             AMOUNT

                       1998                     $        371,000
                       1999                                -
                       2000                           18,779,000
                   Thereafter                              -

                  Total interest expense for the nine months ended September 30,
1997 and 1996 amounted to $793,000 and $969,000,  respectively.  Total  interest
paid for the nine months ended  September 30, 1997 and 1996 amounted to $786,000
and $695,000, respectively.

4.       Provision for income taxes

                  The  provision  for  income  taxes for the nine  months  ended
September 30 consisted of the following:
                                                   1997          1996
                                                   ----          ----
     CURRENT:
        State                                   $   7,000    $   3,000
                                                ---------    ---------

        Total provision for income taxes        $   7,000    $   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.  The minimum lease payments  required under operating leases as
of September 30, 1997 are as follows:

                  YEAR ENDING
                  DECEMBER 31,                          AMOUNT

                         1997                        $         24,000
                         1998                                 132,000
                         1999                                 144,000
                         2000                                 144,000
                         2001                                 144,000
                     Thereafter                                84,000

                                       13

<PAGE>

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

            NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

5.       Commitments (continued)

                  Lease expense for the nine months ended September 30, 1997 and
1996 was $98,000 and $72,000, 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.

                  In November 1995, FASI adopted a Management  Stock Option Plan
("Management  Plan") and 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  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.

                  In April 1997,  FASI issued  options to employees of the Group
to acquire up to 100,000 common shares of FASI at an exercise price of $6.25 per
share.  Half of the options will vest in April 1998 and the remaining  half will
vest in April 1999. The options expire in April 2000.

                  On August 7, 1997 FASI  issued  options  to  employees  of the
Group to acquire up to 270,000  common  shares of FASI at an  exercise  price of
$10.00 per share.  The options will vest if the Company  meets the following two
conditions;  the Company must raise at least  $7,500,000 in  additional  debt or
equity  capital and the Company must have sales of at least  $14,000,000  in any
12-month  period.  The options  must vest by June 30, 1999 and will expire three
years after the vesting date.

                                       14

<PAGE>

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

            NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

7.        Stock options plans (continued)

                  On August 28,  1997,  FASI issued  options to employees of the
Group to  acquire up to 89,500  common  shares of FASI at an  exercise  price of
$8.25 per share.  Half of the options will vest in August 1998 and the remaining
half will vest in August 1999. The options expire in August 2000.

                  The Company  accounts for stock options under the provision of
APB Opinion 25  "Accounting  for Stock  Issued to  Employees".  Accordingly,  no
compensation  cost  has  been  recognized  for  its  stock  option  grants.  Had
compensation cost for the Company's stock option grants been determined based on
the fair value at the grant dates  consistent  with the method of FASB Statement
123  "Accounting  for  Stock-Based  Compensation",  the Company's net income and
earnings  per share would have been reduced to the pro forma  amounts  indicated
below:
                                                         For the nine months
                                                     ended September 30, 1997

          Net loss                  As reported              $(376,000)

                                    Pro forma                $(465,000)

          Primary earnings
             per share              As reported              $    (.18)
                                                             =========

                                    Pro forma                $    (.22)

          Fully diluted earnings
             per share              As reported              $    (.18)
                                                             =========

                                    Pro forma                $    (.22)

                  The fair value of each option grant was  estimated on the date
of grant  using  the  Black-Scholes  option-pricing  model  with  the  following
assumptions  for the April  1997,  and August  28,  1997  grants,  respectively:
risk-free interest rates of 6.4% and 6.0%;  expected lives of two years for both
grants; and volatility of 82% for both grants.

                  The  fair  value  of  the  November   1995  option  grant  was
determined to be  immaterial.  The  probability of vesting of the August 7, 1997
option grant is not determinable at this time. Accordingly,  the effect of these
options on income is not included in the above pro forma amounts.

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.

9.       Casualty gain

                  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.

                                       15

<PAGE>

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

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

         Operations  of the Company and its  subsidiaries  for the three  months
ended  September  30, 1997  generated  income of $475,000  compared to income of
$260,000 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  September  30, 1997 were  $3,414,000
compared  to  $1,612,000  for the  comparable  period of 1996,  an  increase  of
approximately  111%. 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 208%  offset by a decrease  in  McDonnell
Douglas Corporation ("MDC") inventory sales of 3%.

         Costs of goods sold for the three-month period ended September 30, 1997
and 1996 were $2,148,000 and $741,000,  respectively  (approximately 63% and 46%
of sales, respectively). The decrease 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 $611,000 for the three months ended
September  30, 1996 to $791,000 for the three months ended  September  30, 1997.
This was principally attributable to the increase in sales activity.

         Interest   expense   decreased   from  $341,000  to  $307,000  for  the
three-month   periods   ended   September   30,  1996  and  September  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 September 30, 1997 of $161,000 as compared to a net loss of $81,000
for the same period in 1996, an increase in income of $242,000.

                                       16

<PAGE>

NINE MONTHS ENDED SEPTEMBER 30, 1997 AND SEPTEMBER 30, 1996

         Operations  of the  Company  and its  subsidiaries  for the nine months
ended September 30, 1997 generated  income of $880,000  compared to $209,000 for
the  comparable  period of 1996.  The increase in the income for the  nine-month
period is  attributable  to an increase in sales and the  resulting  increase in
gross profit.

         Sales for the nine months  ended  September  30,  1997 were  $8,444,000
compared  to  $4,158,000  for the  comparable  period of 1996,  an  increase  of
approximately  103%.  The  increase  in  sales  was  made up by an  increase  in
after-market  aircraft inventory management and supply sales and brokerage sales
of 169% and an increase in MDC inventory sales of 8%.

         Costs of goods sold for the nine-month  period ended September 30, 1997
and 1996 were $5,136,000 and $2,097,000, respectively (approximately 61% and 50%
of sales,  respectively).  The  reduction  in the gross margin  percentage  is a
result of a change in the product mix of sales.

         Operating  expenses increased from $1,852,000 for the nine months ended
September 30, 1996 to $2,428,000  for the nine months ended  September 30, 1997.
This was principally attributable to the increase in sales activity.

         During the nine months ended September 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  nine  months of 1997.
Interest  expense  increased  from  $969,000 to  $1,249,000  for the  nine-month
periods  ended  September  30, 1996 and  September  30, 1997  respectively.  The
increase 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  1997  period  of  $376,000,   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  $671,000,  the Company  had a net loss in the nine months  ended
September 30, 1997 of $376,000,  compared to net income of $146,000 for the same
period in 1996, a decrease of  $522,000.  The net loss for the nine months ended
September  30,  1997  was  primarily   due  to  the   nonrecurring   accelerated
amortization  of loan costs  described in the prior  paragraph.  The  difference
between the two periods is primarily a result of  nonrecurring  expenses  during
1997 and 1996 nonrecurring income as described in the prior paragraph.

LIQUIDITY

         At September 30, 1997, the Company had working capital  (current assets
in excess of  current  debt) of  $19,236,000  compared  to  working  capital  of
$2,434,000  on December  31, 1996.  The  increase in  liquidity is  attributable
principally  to  cash  received  as  a  result  of  the  Company's  offering  of
$10,000,000 principal amount of 8.5% Subordinated Redeemable Debentures Due 2000
that closed as of September 30, 1997. In addition, the approximately  $6,300,000
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)
contributed  to the increase in liquidity.  During the same period,  the Company

                                       17
<PAGE>

also had  increases  in accounts  receivable  of  $753,000  and  inventories  of
$2,057,000 made possible by the Company's new long-term credit  facility.  These
increases were partially offset by an increase in accounts payable of $1,119,000
caused by the expansion of the Company's purchase of  distributorship  inventory
to support the increase in sales.

         Operating  activities  used  $1,629,000  and generated  $506,000 of the
Company's  cash flow for the nine months ended  September 30, 1997 and September
30, 1996  respectively.  The increase in the cash used for the first nine months
of 1997  compared  to the same period of 1996 was mostly a result of an increase
of $2,057,000 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. The Company's subsidiary, Fields
Aircraft  Spares  Incorporated,  has agreed with  NationsCredit  to enter into a
First Amendment to Loan and Security  Agreement that provides for a minimum loan
amount of $2,500,000, which minimum loan amount increases monthly by $425,000 to
a maximum  minimum loan amount of  $5,000,000.  The First  Amendment to Loan and
Security Agreement is currently being prepared.

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  ("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

                                       18

<PAGE>

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,  ("EPP") 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
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 September 30, 1997,  $8,779,000 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.

         As of September  30, 1997,  the Company  closed a private  placement of
$10,000,000 principal amount of 8.5% Redeemable Subordinated Debentures Due 2000
to non-United States persons pursuant to Regulation S. The holders of Debentures
have a one-time right at any time after December 29, 1997 through  September 27,
2000, subject to prior redemption or repurchase,  to convert up to 30% (less any
amounts converted pursuant to the Mandatory  Conversion  described below) of the
principal  amount of Debentures  into Common Shares.  The conversion  price (the
"Conversion  Price")  is  equal  to 85%  of the  average  closing  price  of the
Company's  Common Shares during the  20-trading day period ending on the date of
notice of  conversion,  but in no event less than  $12.00 per share,  subject to
certain  adjustments.  In the event that during any 20-trading  day period,  the
average  closing price of the Common Shares equals or exceeds  $12.00 per share,
the Company may require the  conversion of up to 20% of the principal  amount of
outstanding  Debentures  at the  Conversion  Price.  EPP acted as the  Company's
placement agent in connection with the offering.  In addition to its commissions
of 8% of the offering  price,  EPP also received a corporate  development fee of
$175,000 and 15,000 Common Shares.  After brokerage and issuance costs, the sale
of the  Debentures  resulted  in a net  infusion  of  capital  of  approximately
$8,850,000.

          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,  its use of additional  capital raised 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

                                       19
<PAGE>

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 similar or allied  businesses  may be  adversely  affected if the
Company  is not  able to raise  additional  capital  or  locate  other  suitable
businesses 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  commercial
aviation  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,
(ix) the Company's ability to service its debt financing and (x) competitive and
pricing pressures.

                                       20
<PAGE>

                           PART II. OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS.

                  None

ITEM 2.  CHANGES IN SECURITIES.

                  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 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
                  ("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")
                  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.

                  On  August 7,  1997,  the Board of  Directors  of the  Company
                  authorized  stock option  contracts (the "August  Options") to
                  purchase 270,000 Common Shares issued to certain key employees
                  of the Company.  The August Options are exercisable for Common
                  Shares  at a price  of  $10.00  per  share.  The  options  are
                  exercisable  upon the Company (a) raising at least  $7,500,000
                  in  additional  debt or equity  capital,  which  condition was
                  satisfied  upon the closing of the  Debentures  (as  described
                  below),  and (b) having net sales of at least  $14,000,000  in
                  any 12-month period.  The August Options expire June 30, 1999.
                  The August Options are not qualified  under any applicable tax
                  laws or regulations.  The August Options were granted pursuant
                  to the exemption from registration provided by Section 4(2) of
                  the Securities Act to a limited number of key employees.

                  On  August 7,  1997,  the  Common  Shareholders  approved  the
                  Company's  1997 Omnibus Stock Option Plan,  which provides for
                  the  issuance  of options  to  purchase  up to 100,000  Common
                  Shares.  On August 28, 1997,  pursuant to this plan, the Board
                  of  Directors  authorized  the  issuance of options to certain
                  directors, executive officers and employees to purchase 89,500
                  Common  Shares at a price of $8.25 per  share.  These  options
                  were  granted  pursuant  to the  exemption  from  registration
                  provided by Section  4(2) of the  Securities  Act to a limited
                  number of directors and executive officers.

                                       21

<PAGE>

                  As of  September  30,  1997,  the  Company  closed  a  private
                  placement of $10,000,000  principal  amount of 8.5% Redeemable
                  Subordinated  Debentures Due 2000 to non-United States persons
                  pursuant to  Regulation  S. The holders of  Debentures  have a
                  one-time  right at any time after  December  29, 1997  through
                  September 27, 2000, subject to prior redemption or repurchase,
                  to convert up to 30% (less any amounts  converted  pursuant to
                  the  Mandatory  Conversion  described  below) of the principal
                  amount of Debentures into Common Shares.  The conversion price
                  (the  "Conversion  Price")  is  equal  to 85%  of the  average
                  closing  price  of the  Company's  Common  Shares  during  the
                  20-trading  day  period  ending  on  the  date  of  notice  of
                  conversion,  but in no  event  less  than  $12.00  per  share,
                  subject to certain  adjustments.  In the event that during any
                  20-trading day period, the average closing price of the Common
                  Shares  equals or exceeds  $12.00 per share,  the  Company may
                  require the conversion of up to 20% of the principal amount of
                  outstanding  Debentures at the Conversion  Price. EPP acted as
                  the Company's placement agent in connection with the offering.
                  In addition to its  commissions  of 8% of the offering  price,
                  EPP also received  placement fee of $175,000 and 15,000 Common
                  Shares.  After brokerage and issuance  costs,  the sale of the
                  Debentures   resulted   in  a  net   infusion  of  capital  of
                  approximately $8,850,000.

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,  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  Company's  quarterly  report  Form 10-QSB for the quarter
                  ended June 30, 1997  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.

                                       22

<PAGE>

ITEM 5.  OTHER INFORMATION.

                  On  August  7,  1997,  the  Company  appointed  the  following
                  executive officers:

                  Peter Frohlich         Chairman
                  Alan M. Fields         Chief Executive Officer and President
                  Lawrence J. Troyna     Chief Financial Officer and Secretary
                  Neil O'Hara            Vice President

                  The Company reported that Carlos Sedillo,  formerly  Secretary
                  of the Company, died on July 7, 1997.

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 27       Financial Data Schedule

                  (b)  Reports on Form 8-K

                           The Company filed a report on Form 8-K, dated October
                           14, 1997, covering Item 9, Sales of Equity Securities
                           Pursuant to Regulation S of the Securities Act
                           of 1933, as Amended.

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<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: November 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


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