Page 1 of 26


                UNITED STATES SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                ----------------

                                    FORM 10-K

 __X__   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES 
         EXCHANGE ACT OF 1934 (FEE REQUIRED)

For the fiscal year ended December 31, 1996       Commission File Number 0-17989


                       PHOENIX HIGH TECH/HIGH YIELD FUND,
                        A CALIFORNIA LIMITED PARTNERSHIP
--------------------------------------------------------------------------------
             (Exact name of Registrant as specified in its charter)

           California                                    68-0166383
--------------------------------            ------------------------------------
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
 incorporation or organization)


2401 Kerner Boulevard, San Rafael, California                  94901-5527
--------------------------------------------------------------------------------
(Address of principal executive offices)                       (Zip Code)

Registrant's telephone number, including area code:     (415) 485-4500
                                                        --------------

Securities registered pursuant to Section 12(b) of the Act:  NONE

Securities registered pursuant to Section 12(g) of the Act:  Units of Limited
Partnership Interest

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best of Registrant's  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.  ______

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 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 _____

As of December  31,  1996,  7,526  Units of Limited  Partnership  interest  were
outstanding.  No  market  exists  for the  Units  of  Partnership  interest  and
therefore there exists no aggregate market value at December 31, 1996.

                    DOCUMENTS INCORPORATED BY REFERENCE: NONE



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                                                                    Page 2 of 26




                       PHOENIX HIGH TECH/HIGH YIELD FUND,
                        A CALIFORNIA LIMITED PARTNERSHIP

                          1996 FORM 10-K ANNUAL REPORT


                                TABLE OF CONTENTS

                                                                           Page

                                     PART I

Item 1.    Business........................................................  3
Item 2.    Properties......................................................  4
Item 3.    Legal Proceedings...............................................  4
Item 4.    Submission of Matters to a Vote of Security Holders.............  4


                                     PART II

Item 5.    Market for the Registrant's Securities and Related Security
           Holder Matters..................................................  5
Item 6.    Selected Financial Data.........................................  5
Item 7.    Management's Discussion and Analysis of Financial Condition
           and Results of Operations.......................................  6
Item 8.    Financial Statements and Supplementary Data.....................  8
Item 9.    Disagreements on Accounting and Financial Disclosure Matters.... 22


                                    PART III

Item 10.   Directors and Executive Officers of the Registrant.............. 22
Item 11.   Executive Compensation.......................................... 23
Item 12.   Security Ownership of Certain Beneficial Owners and Management.. 23
Item 13.   Certain Relationships and Related Transactions.................. 24


                                     PART IV

Item 14.   Exhibits, Financial Statement Schedules and Reports on Form 8-K. 24


Signatures................................................................. 25



<PAGE>


                                                                    Page 3 of 26


                                     PART I

Item 1.    Business.

General Development of Business.

        Phoenix High Tech/High Yield Fund, a California limited partnership (the
"Partnership"),  was organized on July 26, 1988. The  Partnership was registered
with the Securities and Exchange  Commission  with an effective date of November
10,  1988 and shall  continue  to  operate  until its  termination  date  unless
dissolved  sooner  due to the sale of  substantially  all of the  assets  of the
Partnership or a vote of the Limited Partners. The Partnership will terminate on
December  31,  1999.  The General  Partner is Phoenix  Leasing  Incorporated,  a
California  corporation.  The General  Partner or its affiliates  also is or has
been a general partner in several other limited partnerships formed to invest in
capital equipment and other assets.

        The initial public offering was for 25,000 units of limited  partnership
interest  at a price of  $1,000  per unit.  The  Partnership  had the  option of
increasing the public offering up to a maximum of 50,000 units.  The Partnership
sold 7,526  units for a total  capitalization  of  $7,526,000.  Of the  proceeds
received  through  the  offering,  the  Partnership  has  incurred  $967,837  in
organizational and offering expenses.  The initial public offering was completed
on November 10, 1990.

        From the initial formation of the Partnership through December 31, 1996,
the total  investments in equipment  leases and financing  transactions  (loans)
approximate  $7,394,000.  The average initial firm term of contractual  payments
from equipment  subject to lease was 45.20 months,  and the average  initial net
monthly  payment rate as a percentage of the original  purchase price was 2.92%.
The  average  initial  firm term of  contractual  payments  from loans was 61.96
months.  These  leases  and  loans  have  been  concentrated  primarily  in  the
manufacturing and telecommunications industries.

Summary of Business Activities.

        The Partnership  has engaged in diverse  activities in which the General
Partner  has had  considerable  experience.  These  areas  include  leasing  and
financing  activities  for venture  capital-backed  emerging  growth  companies,
financing  and leasing  activities  for cable  television  system  operators and
related  businesses,  and other general  leasing and financing  activities.  Set
forth below is a summary of these activities.

        Emerging Growth Company Activities (Venture Financing). One of the major
purposes of the  Partnership  is to lease and finance  various  types of capital
equipment,  primarily to emerging  growth  companies.  The types of equipment in
which the  Partnership  has invested  include  various types of high  technology
equipment  such  as  semiconductor   production  and  test  equipment,   general
electronic  production equipment,  computer terminals,  data processing systems,
computer  communications  equipment  and medical  equipment,  as well as office,
manufacturing  and other types of capital  equipment.  The  Partnership has also
entered into arrangements to provide secured financings, including financings of
accounts receivable and inventories, to emerging growth companies.

           The emerging growth  companies with which the Partnership has entered
into leases or financing  transactions are located  throughout the United States
and its possessions and are engaged in a variety of businesses for the provision
of products or services.  Such  companies are in the start-up or early phases of
operation  with,  in most cases,  at least one round of venture  capital debt or
equity financing having been concluded prior to the Partnership's investment.

        Cable  Television  System Leasing and Financing (Cable  Financing).  The
other major purpose of the  Partnership is to make secured loans to operators of
cable television systems for the acquisition, refinancing, construction, upgrade
and  extension of such systems in the United  States,  its  possessions  and its
military bases. In addition,  the Partnership has acquired cable  television and
related equipment and leases such equipment to third parties.



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                                                                    Page 4 of 26


           Loans  to  cable  system   operators  are  secured  by  a  senior  or
subordinated lien on the assets of the cable television  system,  its franchise,
contracts and related assets,  including its subscriber  list.  Various types of
cable television and related equipment acquired by the Partnership and leased or
financed to third parties  throughout the United  States,  its  possessions  and
military bases will be leased or financed on a long-term basis.

        Several  of  the  cable  television  system  operators  the  Partnership
provided   financing  to  have   experienced   financial   difficulties.   These
difficulties are believed to have been caused by several factors.  Some of these
factors are: a significant  reduction in the availability of debt from banks and
other  financial   institutions  to  finance  the  acquisition  and  operations,
uncertainties  related to future  government  regulation in the cable television
industry and the economic  recession in the United  States.  These  factors have
resulted in a  significant  decline in the demand for the  acquisition  of cable
systems and have further  caused an overall  decrease in the value of many cable
television  systems.  As a result of the above, many of the Partnership's  notes
receivable from cable television  system  operators have gone into default.  The
result is that the Partnership has not received scheduled  payments,  has had to
grant loan extensions, has experienced an increase in legal and collection costs
and in some cases,  has had to foreclose  on the cable  television  system.  The
impact of this has been a decrease  in the overall  return on the  Partnership's
investments in such notes.

        The  Partnership  has  obtained an ownership  interest in several  cable
system joint ventures that it obtained through foreclosure.  These cable systems
currently  generate a positive monthly cash flow and provided cash distributions
to the  Partnership  during  1996 and 1995.  The cable  systems  are managed and
operated by an affiliate of the General Partner.

Item 2.    Properties.

        The  Partnership  is  engaged in the  equipment  leasing  and  financing
industry and as such,  does not own or operate any  principal  plants,  mines or
real property. The primary assets held by the Partnership are its investments in
leases and loans.

        As of  December  31,  1996,  the  Partnership  owns  equipment  with  an
aggregate original cost of $758,000.  The equipment has been leased to customers
located throughout the United States. The following table summarizes the type of
equipment owned or financed by the Partnership.

                                                                  Percentage of
           Asset Types                      Purchase Price(1)      Total Assets
           -----------                      -----------------     -------------
                                          (Amounts in Thousands)

Capital Equipment Leased to Emerging
 Growth Companies                                $  758                100%
                                                 ------                ---

TOTAL                                            $  758                100%
                                                 ======                ===

(1) These amounts  include cost of equipment on financing  leases of $668,000 at
    December 31, 1996.


Item 3.    Legal Proceedings.

        The  Partnership is not a party to any pending legal  proceedings  which
would have a material adverse impact on its financial position.


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

        No matters  were  submitted to a vote of limited  partners,  through the
solicitation of proxies or otherwise, during the year covered by this report.


<PAGE>


                                                                    Page 5 of 26


                                     PART II

Item 5.    Market for the Registrant's Securities and Related Security Holder
           Matters.

        (a)The  Registrant's  limited  partnership  interests  are not  publicly
           traded.  There is no market for the Registrant's  limited partnership
           interests and it is unlikely that any will develop.

        (b)Approximate number of equity security investments:

                                                       Number of Unit Holders
                     Title of Class                    as of December 31, 1996
           ----------------------------------          -----------------------

           Limited Partners                                      374


Item 6.    Selected Financial Data.


                                 1996      1995      1994      1993      1992
                                ------    ------    ------    ------    ------
                              (Amounts in Thousands Except for Per Unit Amounts)

Total Income                    $  225    $  209    $  343    $  770    $  775

Net Income (Loss)                  279      (558)      163       243        91

Total Assets                     1,844     2,017     3,271     4,440     5,090

Distributions to Partners          283       816     1,362       779       780

Net Income (Loss) per Limited
 Partnership Unit                35.28    (73.40)    19.89     31.20     11.07

Distributions per Limited
 Partnership Unit                37.27    107.28    179.21    102.53    102.60

        The above selected financial data should be read in conjunction with the
financial statements and related notes appearing elsewhere in this report.



<PAGE>


                                                                    Page 6 of 26


Item 7. Management's Discussion and Analysis of Financial Condition and Results
        of Operations.

Results of Operations

        Phoenix High Tech/High Yield Fund (the Partnership)  reported net income
of $279,000  during the year ended  December 31, 1996, as compared to a net loss
of $558,000  during 1995 and net income of $163,000 during 1994. The increase in
net income during 1996,  compared to 1995, is attributable to a reduction in the
provision for losses on  receivables of $753,000.  In contrast,  the increase in
provision  for  losses  on   receivables   of  $572,000  was  the  major  factor
contributing to the net loss experienced in 1995, as compared to 1994.

        Total  revenues  increased by $16,000 during the year ended December 31,
1996,  as compared to 1995 but  decreased by $134,000  during 1995,  compared to
1994.  The  increase  in total  revenues  in 1996,  compared  to 1995 is  mainly
attributable to a gain on sale of securities of $43,000.  The gain on securities
is  attributable  to the  exercise  and  sale  of  stock  warrants  held  by the
Partnership.  The  Partnership  has been granted  stock  warrants as part of its
lease or financing agreements with certain emerging growth companies.

        An additional factor  contributing to the increase in total revenues for
the year ended  December 31, 1996,  compared to 1995,  is the increase in rental
income of $21,000.  The increase in rental  income during 1996 is due to a lease
that was placed onto month-to-month  renewal.  This lease had reached the end of
its  original  term on April 1,  1996 and was on  month-to-month  renewal  until
December 1, 1996 at which point the lessee purchased the equipment.

        Partially  offsetting the gain on sale of securities and the increase in
rental income for the year ended  December 31, 1996,  compared to 1995,  are the
declines in earned income from financing  leases and interest  income from notes
receivable.  The decrease in earned  income from  financing  leases for 1996, as
well as 1995, compared to the respective prior year, is a result of a decline in
the net investment in financing  leases.  The net investment in financing leases
at December  31, 1996 is $99,000  compared to $311,000 at December  31, 1995 and
$541,000 at December 31, 1994.

        Interest  income from notes  receivable  for the year ended December 31,
1995 was higher  than usual as a result of the  payoffs of two notes  receivable
from cable television system operators that had been classified as impaired. The
Partnership  had suspended the accrual of interest  income on these notes.  Upon
the payoff,  the proceeds  were first applied to the  outstanding  principal and
accrued interest, with the excess recognized as interest income. On one of these
notes,  the  Partnership  received  a  settlement  payoff  in  excess of the net
carrying value, thereby recognizing interest income for the excess.

        Total  expenses  decreased  by $821,000  during 1996,  but  increased by
$587,000  during 1995 as compared to the same periods in the previous  year. The
Partnership  received  total  settlement  proceeds of $672,000 on its  remaining
impaired note receivable  during 1996,  which resulted in a recovery of $190,000
of the provision for losses on notes  receivable.  In contrast,  the increase in
the provision for losses on  receivables  during 1995, as compared to 1994,  was
deemed  necessary  pursuant to the review of the  Partnership's  remaining  note
receivable to a cable television system operator.

         Another factor  contributing  to the decrease in total expenses  during
1996 was a decrease  in legal  expenses  due to the payoff of the  partnership's
remaining note receivable that was impaired.

        Inflation  affects the  Partnership  in relation to the current  cost of
equipment  placed on lease and the residual  values  realized when the equipment
comes off lease and is sold.  During the last several years inflations have been
low, thereby having very little impact upon the Partnership.

Liquidity and Capital Resources

        The Partnership's primary source of liquidity comes from its contractual
obligations  with lessees and borrowers to receive rental  payments and payments
of principal and interest.  As the initial lease terms of the leases expire, the
Partnership  will re-lease or sell the  equipment.  The future  liquidity of the
Partnership  will  depend  upon the  General  Partner's  success  in  collecting
scheduled contractual payments from its lessees and borrowers. Additionally, the
Partnership  has  investments  in foreclosed  cable systems joint  ventures from
which it receives cash distributions of the excess cash generated by operations.
The Partnership  will also receive a share of the cash when the cable television
system is sold.



<PAGE>


                                                                    Page 7 of 26


        The cash generated by leasing and financing  activities was $985,000 for
the year ended  December  31,  1996,  as compared to $699,000 for the year ended
December  31,  1995 and  $641,000  for the year ended  December  31,  1994.  The
increase in cash generated by leasing and financing  activities  during the past
two years is a result of payoffs of impaired notes receivable.

        During the year ended December 31, 1996, the  Partnership  received cash
distributions of $87,000 from foreclosed cable system joint ventures compared to
$11,000 during 1995 and $23,000 during 1994. This increase in distributions  for
the year ended  December  31, 1996,  compared to 1995,  is  attributable  to the
distribution of sale proceeds from the sale of a cable  television  system owned
by one of the Partnership's foreclosed cable system joint ventures.

        The Partnership received proceeds from the sale of securities of $43,000
for the year ended  December  31, 1996 as a result of the  exercise  and sale of
stock warrants, as previously discussed.

        As of December 31, 1996 and 1995, the Partnership  owned equipment being
held for lease  with an  original  cost of  $89,000  and a net book value of $0,
compared  to an  original  cost of  $244,000  and a net book  value of $4,000 at
December 31, 1994.  The General  Partner is actively  engaged,  on behalf of the
Partnership,  in  remarketing  and selling  the  Partnership's  equipment  as it
becomes available.

        The cash  distributed to partners was $283,000,  $816,000 and $1,362,000
during  the year  ended  December  31,  1996,  1995 and 1994,  respectively.  In
accordance with the Partnership Agreement,  the Limited Partners are entitled to
99% of the cash available for  distribution  and the General Partner is entitled
to 1%. As a  result,  the  Limited  Partners  received  $280,000,  $808,000  and
$1,349,000  in  distributions  during  1996,  1995 and 1994,  respectively.  The
cumulative cash distributions to limited partners are $5,837,000, $5,557,000 and
$4,749,000  at  December  31,  1996,  1995 and 1994,  respectively.  The General
Partner  received  $3,000,  $8,000  and  $13,000  for  its  share  of  the  cash
distributions during 1996, 1995 and 1994, respectively.

        The Partnership made its quarterly distribution to partners on April 15,
1996 at the same rate as the January 15, 1996 distribution,  but at a rate lower
than the distributions  made during the same period in 1995. The distribution on
April  15,  1996  was the  last  scheduled  quarterly  distribution  made by the
Partnership.  The Partnership has switched to an annual distribution method with
the first annual  distribution  being made on January 15, 1997. As a result of a
settlement  payment  received  on an  impaired  note  during the  quarter  ended
September 30, 1996, the  Partnership  included these proceeds in the January 15,
1997 distribution to partners.  The Partnership's  ability to distribute cash to
partners is dependent upon the Partnership  receiving its  contractual  payments
from notes receivable and financing leases. If the cash generated by Partnership
operations  decrease below  expectations,  the distributions to partners will be
adjusted accordingly.

        Cash  generated  from leasing and financing  operations  has been and is
anticipated  to continue to be sufficient to meet the  Partnership's  continuing
operational expenses.

        Forward-looking  statements in this report are made pursuant to the safe
harbor  provisions  of the  Private  Securities  Litigation  Reform Act of 1995.
Actual  results could differ from those  anticipated  by some of the  statements
made above. Limited Partners are cautioned that such forward-looking  statements
involve risks and uncertainties including without limitation the following:  (i)
the  Partnership's  plans are subject to change at any time at the discretion of
the General Partner of the Partnership,  (ii) future technological  developments
in the industry in which the Partnership operates, (iii) competitive pressure on
pricing or services,  (iv) substantial  customer defaults or cancellations,  (v)
changes  in  business  conditions  and the  general  economy,  (vi)  changes  in
government regulations affecting the Partnership's core businesses and (vii) the
ability of the Partnership to sell its remaining assets.


<PAGE>


                                                                    Page 8 of 26





















               Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                           PHOENIX HIGH TECH/HIGH YIELD FUND,
                            A CALIFORNIA LIMITED PARTNERSHIP

                              YEAR ENDED DECEMBER 31, 1996



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                                                                   Page 9 of 26













                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
                    ----------------------------------------


To the Partners of Phoenix High Tech/High Yield Fund, 
a California Limited Partnership:

We have audited the accompanying  balance sheets of Phoenix High Tech/High Yield
Fund, a California  Limited  Partnership,  as of December 31, 1996 and 1995, and
the related statements of operations,  partners' capital and cash flows for each
of the three  years in the period  ended  December  31,  1996.  These  financial
statements  and the  schedule  referred to below are the  responsibility  of the
Partnership's  management.  Our responsibility is to express an opinion on these
financial statements and schedule based on our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material  respects,  the financial  position of Phoenix High Tech/High Yield
Fund, a California  Limited  Partnership,  as of December 31, 1996 and 1995, and
the results of its  operations and its cash flows for each of the three years in
the period ended  December 31,  1996,  in  conformity  with  generally  accepted
accounting principles.

Our  audits  were  made for the  purpose  of  forming  an  opinion  on the basic
financial  statements  taken  as a  whole.  The  schedule  listed  in  Item  14,
subsection (a) 2, is presented for purposes of complying with the Securities and
Exchange  Commission's  rules and is not a required part of the basic  financial
statements.  This schedule has been subjected to the auditing procedures applied
in the audits of the basic financial  statements and, in our opinion,  is fairly
stated in all material  respects in relation to the basic  financial  statements
taken as a whole.


San Francisco, California,                              ARTHUR ANDERSEN LLP
  January 17, 1997



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                                                                   Page 10 of 26


                       PHOENIX HIGH TECH/HIGH YIELD FUND,
                        A CALIFORNIA LIMITED PARTNERSHIP
                                 BALANCE SHEETS
                 (Amounts in Thousands Except for Unit Amounts)

                                                             December 31,
                                                         1996           1995
                                                        ------         ------
ASSETS

Cash and cash equivalents                               $1,499         $  655

Accounts receivable                                         44             18

Notes receivable (net of allowance
  for losses on notes receivable of
  $0 and $706 at December 31, 1996
  and 1995, respectively)                                 --              581

Securities, available-for-sale                            --              149

Equipment on operating leases and held
  for lease (net of accumulated depreciation
  of $56 at December 31, 1996 and 1995)                   --             --

Net investment in financing leases                          99            311

Investment in joint ventures                               197            266

Capitalized acquisition fees (net of
  accumulated amortization of $292 and
  $260 at December 31, 1996 and 1995,
  respectively)                                              4             36

Other assets                                                 1              1
                                                        ------         ------

    Total Assets                                        $1,844         $2,017
                                                        ======         ======

LIABILITIES AND PARTNERS' CAPITAL

Liabilities:

  Accounts payable and accrued expenses                 $   24         $   44
                                                        ------         ------

    Total Liabilities                                       24             44
                                                        ------         ------

Partners' Capital:

  General Partner                                           (3)           (14)

  Limited Partners, 25,000 units authorized,
    7,526 units issued and outstanding at
    December 31, 1996 and 1995                           1,823          1,838

  Unrealized gains on available-for-sale
    securities
                                                          --              149
                                                        ------         ------

    Total Partners' Capital                              1,820          1,973
                                                        ------         ------

    Total Liabilities and Partners' Capital             $1,844         $2,017
                                                        ======         ======

                 The accompanying notes are an integral part of
                                these statements.

<PAGE>


                                                                   Page 11 of 26


                       PHOENIX HIGH TECH/HIGH YIELD FUND,
                        A CALIFORNIA LIMITED PARTNERSHIP
                            STATEMENTS OF OPERATIONS
               (Amounts in Thousands Except for Per Unit Amounts)

                                               For the Years Ended December 31,
                                                   1996      1995      1994
                                                 -------   -------   -------
INCOME

  Rental income                                  $    33   $    12   $    17

  Earned income, financing leases                     36        75       118

  Gain on sale of equipment                           12         4        38

  Interest income, notes receivable                   34        85        53

  Equity in earnings from joint ventures              18         2        10

  Gain on sale of securities                          43      --          64

  Other income                                        49        31        43
                                                 -------   -------   -------

    Total Income                                     225       209       343
                                                 -------   -------   -------


EXPENSES

  Depreciation and amortization                       32        50        69

  Lease related operating expenses                  --        --           7

  Management fees to General Partner                  40        30        22

  Reimbursed administrative costs to
   General Partner                                    13        17        23

  Provision for (recovery of) losses
   on receivables                                   (190)      563        (9)

  Legal expense                                       29        81        33

  General and administrative expenses                 22        26        35
                                                 -------   -------   -------

    Total Expenses                                   (54)      767       180
                                                 -------   -------   -------

NET INCOME (LOSS)                                $   279   $  (558)  $   163
                                                 =======   =======   =======

NET INCOME (LOSS) PER LIMITED
  PARTNERSHIP UNIT                               $ 35.28   $(73.40)  $ 19.89
                                                 =======   =======   =======

ALLOCATION OF NET INCOME (LOSS):

  General Partner                                $    14   $    (6)  $    13

  Limited Partners                                   265      (552)      150
                                                 -------   -------   -------
                                                 $   279   $  (558)  $   163
                                                 =======   =======   =======

                 The accompanying notes are an integral part of
                                these statements.

<PAGE>
<TABLE>

                                                                               Page 12 of 26


                                        PHOENIX HIGH TECH/HIGH YIELD FUND,
                                         A CALIFORNIA LIMITED PARTNERSHIP
                                          STATEMENTS OF PARTNERS' CAPITAL
                                  (Amounts in Thousands Except for Unit Amounts)

<CAPTION>
                                         General
                                         Partner's    Limited Partners'  Unrealized    Total
                                          Amount      Units      Amount    Gains       Amount
                                         ---------    -----------------  ----------    ------
<S>                                        <C>        <C>        <C>        <C>        <C>    
Balance, December 31, 1993                 $--        7,526      $4,397     $ --       $4,397

Distributions to partners ($179.21
  per limited partnership unit)              (13)      --        (1,349)      --       (1,362)

Net income                                    13       --           150       --          163
                                           -----      -----      ------     ------     ------

Balance, December 31, 1994                  --        7,526       3,198       --        3,198

Distributions to partners ($107.28
  per limited partnership unit)               (8)      --          (808)      --         (816)

Unrealized gains on available-for-
  sale securities                           --         --         --          149         149

Net loss                                      (6)      --          (552)      --         (558)
                                           -----      -----      ------     ------     ------

Balance, December 31, 1995                   (14)     7,526       1,838       149       1,973

Distributions to partners ($37.27
  per limited partnership unit)               (3)      --          (280)      --         (283)

Change in unrealized gains on avail-
  able-for-sale securities                  --         --         --         (149)       (149)

Net income                                    14       --           265       --          279
                                           -----      -----      ------     ------     ------

Balance, December 31, 1996                 $  (3)     7,526      $1,823     $ --       $1,820
                                           =====      =====      ======     ======     ======
</TABLE>

                                  The accompanying notes are an integral part of
                                                 these statements.

<PAGE>


                                                                   Page 13 of 26


                       PHOENIX HIGH TECH/HIGH YIELD FUND,
                        A CALIFORNIA LIMITED PARTNERSHIP
                            STATEMENTS OF CASH FLOWS
                             (Amounts in Thousands)

                                               For the Years Ended December 31,
                                                  1996      1995      1994
                                                 ------    ------    ------
Operating Activities:

  Net income (loss)                              $  279    $ (558)   $  163
  Adjustments to reconcile net income
    (loss) to net cash provided by
    operating activities:
      Depreciation and amortization                  32        50        69
      Gain on sale of equipment                     (12)       (4)      (38)
      Equity in earnings from joint ventures        (18)       (2)      (10)
      Provision for (recovery of) losses on
        notes receivable                           (190)      558        22
      Provision for (recovery of) losses on
        accounts receivable                        --           5       (31)
      Gain on sale of securities                    (43)     --         (64)
      Decrease (increase) in accounts receivable    (26)       (2)       15
      Increase (decrease) in accounts payable
        and accrued expenses                        (20)      (29)       30
      Decrease in other assets                     --           2      --
                                                 ------    ------    ------

  Net cash provided by operating activities           2        20       156
                                                 ------    ------    ------

Investing Activities:

  Principal payments, financing leases              212       227       298
  Principal payments, notes receivable              771       452       187
  Proceeds from sale of equipment                    12         6        50
  Proceeds from sale of securities                   43      --          64
  Distributions from joint ventures                  87        11        23
                                                 ------    ------    ------

  Net cash provided by investing activities       1,125       696       622
                                                 ------    ------    ------

Financing Activities:

  Distributions to partners                        (283)     (816)   (1,362)
                                                 ------    ------    ------

  Net cash used by financing activities            (283)     (816)   (1,362)
                                                 ------    ------    ------

Increase (decrease) in cash and cash equivalents    844      (100)     (584)

Cash and cash equivalents, beginning of period      655       755     1,339
                                                 ------    ------    ------

Cash and cash equivalents, end of period         $1,499    $  655    $  755
                                                 ======    ======    ======

                 The accompanying notes are an integral part of
                                these statements.
<PAGE>

                                                                   Page 14 of 26


                       PHOENIX HIGH TECH/HIGH YIELD FUND,
                        A CALIFORNIA LIMITED PARTNERSHIP

                          NOTES TO FINANCIAL STATEMENTS

                                DECEMBER 31, 1996


Note 1.    Organization and Partnership Matters.

        Phoenix High Tech/High Yield Fund (the  "Partnership"),  was formed as a
California  limited  partnership on July 26, 1988. The initial  Limited  Partner
capital  contribution  of $1,000 was made by Phoenix Leasing  Incorporated  (the
"General  Partner").  The  Partnership's  primary  business  objectives are: (1)
leasing and financing various types of capital  equipment,  primarily to and for
emerging  growth  companies  and, in some cases,  making  secured  loans to such
companies; (2) making secured loans to operators of cable television systems for
acquisition,   refinancing,   construction,   upgrade  and  extension  of  cable
television  systems;  and (3)  engaging in other types of leasing and  financing
arrangements,   including  entering  into  equipment  purchase  and  remarketing
agreements with various  manufacturers  of equipment and software  available for
leasing or licensing by the Partnership.

        The  Partnership  has  also  made  investments  in joint  ventures  with
affiliated  partnerships  managed  by the  General  Partner  for the  purpose of
spreading the risks of financing or acquiring  certain capital  equipment leased
to third parties (see Note 6).

        For financial  reporting  purposes,  Partnership  income is allocated as
follows:  First, to the General Partner until the cumulative income so allocated
is equal to the cumulative  distributions to the General Partner.  Second, 1% to
the General Partner and 99% to the Limited Partners until the cumulative  income
so  allocated  is  equal to any  cumulative  Partnership  loss  and  syndication
expenses,  and the balance,  if any, to the Limited  Partners.  All  Partnership
losses are allocated 1% to the General Partner and 99% to the Limited  Partners.
Syndication  expenses are specially allocated one percent to the General Partner
and 99% to the Limited Partners.

        Distributions.   The   General   Partner   intends  to  make   quarterly
distributions throughout the life of the Partnership.  Additionally, in order to
provide  funds  for   Partnership   investments,   while  still  providing  cash
distributions  for Limited  Partners to pay any resulting tax liability from the
Partnership,  the General  Partner  anticipates  that for investors  admitted as
Limited Partners in 1989, the  distributions  made in 1990 through 1992, and for
investors  admitted in 1990, the distributions made in 1991 through 1993 were in
an amount  at least  equal to  approximately  40% of the  taxable  income of the
Partnership  allocated to such Limited  Partner for the prior year (that is, the
estimated tax liability  attributed to an investment in the Partnership),  or 4%
of such  Limited  Partner's  original  capital  contribution,  prorated  for any
partial year,  whichever was greater. The General Partner is entitled to receive
1% of all distributions  until the Limited Partners have recovered their initial
capital  contributions plus a return of 16% per annum,  compounded annually,  on
their unrecovered  capital  contributions (the "Priority  Return").  Thereafter,
cash available for  distribution  will be distributed 20% to the General Partner
and 80% to the Limited Partners.

        Bonus Distribution. Pursuant to the Partnership Agreement, upon the 15th
of the  calendar  month  following  the earlier of (1) the  Partnership  raising
$10,000,000,  or (2) the date 12 months  from the date of  release of funds from
the impound account,  the Partnership  made a bonus  distribution to the Limited
Partners who have purchased units prior to that time. The bonus distribution was
calculated  at 12% per annum  (prorated  for any partial  year) of each  Limited
Partner's  capital  account.  In October of 1990,  the  General  Partner  made a
$571,000 capital contribution to the Partnership in an amount equal to the bonus
distribution  and has acquired 571 units as a Limited Partner in return for such
contribution.  Distributions  pursuant  to the  bonus  distribution  will  count
towards the Priority Return.

        In the event the General  Partner  has a deficit  balance in its capital
account  at the  time  of  Partnership  liquidation,  it  will  be  required  to
contribute the amount of such deficit to the Partnership.

        As compensation  for services  performed in connection with the analysis
of   equipment   available  to  the   Partnership   and  analysis  of  financing
transactions, the General Partner receives an acquisition and loan placement fee
equal to 4% of (a) the purchase price of equipment  acquired by the Partnership,
(b) financing  provided to businesses such as emerging growth companies or cable
television  system  operators,  or (c) the purchase price of equipment leased by
manufacturers,  the financing for which is provided by the Partnership,  in each
case payable upon such acquisition or loan  transaction,  as the case may be. In
addition, as compensation for management services,  the General Partner receives
a management  fee payable  quarterly  equal to 3.5% of the  Partnership's  gross


<PAGE>


                                                                   Page 15 of 26


revenues.  Such revenues include loan payments,  rental receipts,  proceeds from
the sale of  equipment  and  other  income  (other  than  interest  income  from
short-term,  temporary  investments).  Acquisition  fees are amortized  over the
average expected life of the assets, principally on a straight-line basis.

        Schedule  of  compensation  paid  and distributions  made to the General
Partner for the years ended December 31,

                                         1996      1995      1994
                                         ----      ----      ----
                                          (Amounts in Thousands)

      Management fees                    $ 40     $  30      $ 22
      Cash distributions                    3         8        13
                                         ----     -----      ----

                                         $ 43     $  38      $ 35
                                         ====     =====      ====


Note 2.    Summary of Significant Accounting Policies.

      Leasing  Operations.  The  Partnership's  leasing  operations  consist  of
financing and operating  leases.  The financing  method of accounting for leases
records as  unearned  income at the  inception  of the lease,  the excess of net
rentals  receivable  and estimated  residual value at the end of the lease term,
over the cost of equipment leased. Unearned income is credited to income monthly
over the term of the lease on a declining basis to provide an approximate  level
rate of  return  on the  unrecovered  cost of the  investment.  Direct  costs of
consummating new leases are capitalized and included in the cost.

        Under  the  operating  method  of  accounting  for  leases,  the  leased
equipment  is recorded as an asset at cost and  depreciated  on a  straight-line
basis over the estimated useful life, ranging up to seven years.

        The Partnership's policy is to review periodically the expected economic
life of its rental equipment in order to determine the probability of recovering
its  undepreciated  cost. Such reviews address,  among other things,  recent and
anticipated  technological  developments affecting high technology equipment and
competitive factors within the high technology marketplace. Although remarketing
rental  rates are  expected to decline in the future with respect to some of the
Partnership's  rental  equipment,  such rentals are expected to exceed projected
expenses,  including  depreciation.  When  subsequent  reviews of the  equipment
portfolio  indicate that rentals plus anticipated sales proceeds will not exceed
expenses in any future period, the Partnership  revises its depreciation  policy
as appropriate.

        Rental income for the year is determined on the basis of rental payments
due for the period under the terms of the lease.  Maintenance and repairs of the
leased equipment are charged to expense.

        Portfolio  Valuation  Methodology.  The  Partnership  uses the portfolio
method of accounting for the net realizable value of the Partnership's equipment
portfolio.

      Credit and Collateral. The Partnership's activities have been concentrated
in the  equipment  leasing  and  financing  industry.  A  credit  evaluation  is
performed  by the  General  Partner  for all  leases  and loans  made,  with the
collateral  requirements  determined on a case-by-case  basis. The Partnership's
loans are  generally  secured by the  equipment or assets  financed and, in some
cases,  other  collateral  of  the  borrower.  In  the  event  of  default,  the
Partnership  has the right to foreclose upon the collateral  used to secure such
loans.

      Investment in Joint Ventures.  Investments in net assets of the foreclosed
cable  systems  joint  ventures  reflect the  Partnership's  equity basis in the
ventures.  Under the equity  method of  accounting,  the original  investment is
recorded at cost and is adjusted  periodically  to recognize  the  Partnership's
share of earnings,  losses,  cash contributions and cash distributions after the
date of acquisition.

      Investment  in   Available-for-Sale   Securities.   The   Partnership  has
investments in stock warrants in public  companies that have been  determined to
be available for sale.  Available-for-sale  securities  are stated at their fair
market  value,  with the  unrealized  gains and  losses  reported  in a separate
component of partners' capital.

      Non-Cash  Investing  Activity.  On  September  20, 1995,  the  Partnership
foreclosed  upon  a  nonperforming   outstanding  note  receivable  to  a  cable
television system operator to whom the Partnership,  along with other affiliated
partnerships   managed  by  the  General  Partner,   had  extended  credit.  The
partnerships'  notes  receivable  were  exchanged for interests  (their  capital
contribution), on a pro rata basis, in a newly formed joint venture owned by the
<PAGE>

                                                                   Page 16 of 26


partnerships and managed by the General  Partner.  The amount of the outstanding
note receivable that was contributed to the joint venture was $94,000.

      Financial  Accounting   Pronouncements.   In  March  1995,  the  Financial
Accounting Standards Board issued Statement of Financial Accounting Standard No.
121,  "Accounting  for the  Impairment of Long-Lived  Assets and for  Long-Lived
Assets to be Disposed  of," which  requires that  long-lived  assets and certain
identifiable  intangibles  to be held  and used by an  entity  be  reviewed  for
impairment  whenever  events  or  changes  in  circumstances  indicate  that the
carrying amount of an asset may not be recoverable. In performing the review for
recoverability,  the entity  would  estimate  the future cash flows  expected to
result from the use of the asset and its eventual disposition. If the sum of the
expected future cash flows  (undiscounted  and without interest charges) is less
than the  carrying  amount  of the  asset,  an  impairment  loss is  recognized.
Measurement  of an  impairment  loss  for  long-lived  assets  and  identifiable
intangibles  that an entity  expects to hold and use should be based on the fair
value of the asset.  Statement No. 121 is effective for financial statements for
fiscal years beginning after December 15, 1995. At January 1, 1996, the adoption
of  Statement  No. 121 did not  materially  impact the  Partnership's  financial
position or results of operations.

      Reclassification.  Certain 1995  and 1994 amounts  have been  reclassified
to conform to the 1996 presentation.

      Cash and Cash Equivalents. This includes deposits at banks, investments in
money market funds and other highly liquid short-term  investments with original
maturities of less than 90 days.

      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  reported  amounts  of assets and
liabilities  and disclosure of contingent  assets and liabilities at the date of
the  financial  statements  and the  reported  amounts of revenues  and expenses
during the reporting period. Actual results could differ from those estimates.


Note 3.    Accounts Receivable.

      Accounts receivable consist of the following at December 31:

                                                            1996      1995
                                                           ------    ------
                                                        (Amounts in Thousands)

        Lease payments                                     $    5    $   14
        General Partner and Affiliates                         36         3
        Property and sales taxes                                3         1
                                                           ------    ------

           Total                                           $   44    $   18
                                                           ======    ======


Note 4.    Notes Receivable.

       Notes receivable consist of the following at December 31:

                                                            1996      1995
                                                           ------    ------
                                                        (Amounts in Thousands)
        Notes receivable from cable television system
        operators with interest ranging from 14% to 18%
        per annum, receivable in installments ranging
        from 59 to 96 months, collateralized by a
        security interest in the cable system assets 
        These notes have a graduated repayment schedule
        followed by a balloon payment                      $ --      $1,287

        Less:  allowance for losses on notes receivable      --        (706)
                                                           ------    ------

           Total                                           $ --      $  581
                                                           ======    ======

        The   Partnership's   notes  receivable  from  cable  television  system
operators  provided  for a monthly  payment rate in an amount that was less than
the contractual  interest rate. The difference  between the payment rate and the
contractual  interest rate was added to the  principal  and  therefore  deferred
until the maturity  date of the note.  Upon  maturity of the note,  the original
principal  and  deferred  interest  was due and  payable in full.  Although  the
contractual  interest  rates may be higher,  due to a high degree of uncertainty
relating to the  collection  of the  entire  amount of  the  contractually  owed

<PAGE>


                                                                   Page 17 of 26


interest, the Partnership limited the amount of interest being recognized on its
performing  notes  receivable  to the amount of the payments  received,  thereby
deferring the recognition of a portion of the deferred  interest until such time
as management believes it will be realized.

        Generally,  notes  receivable are classified as impaired and the accrual
of  interest  on such notes are  discontinued  when the  contractual  payment of
principal  or  interest  has become 90 days past due or  management  has serious
doubts about further  collectibility of the contractual  payments.  Any payments
received  subsequent  to the  placement  of the note  receivable  on to impaired
status will generally be applied towards the reduction of the  outstanding  note
receivable  balance,  which may include  previously  accrued interest as well as
principal.  Once the principal and accrued  interest balance has been reduced to
zero, the remaining payments will be applied to interest income.

        At December 31, 1996 and 1995, the recorded investment in notes that are
considered to be impaired were $0 and  $1,287,000,  respectively,  for which the
related  allowance  for losses were $0 and $706,000,  respectively.  The average
recorded  investment in impaired  loans during the year ended  December 31, 1996
and  1995  were  approximately  $619,000  and  $1,564,000,   respectively.   The
Partnership  recognized  interest income on impaired notes receivable during the
year  ended   December  31,  1996  and  1995   totaling   $34,000  and  $85,000,
respectively.

        During the year ended  December 31,  1996,  the  Partnership  received a
settlement on its one remaining note receivable from a cable  television  system
operator which was considered to be impaired. The Partnership received a partial
recovery of $672,000 as a settlement  which was applied  towards the  $1,188,000
outstanding  note  receivable  balance.  The  remaining  balance of $516,000 was
written-off  through its related  allowance  for loan losses  provided  for in a
previous  year.  Upon receipt of the  settlement  of this note  receivable,  the
Partnership  reduced the allowance  for loan losses by $190,000  during the year
ended  December 31, 1996.  This  reduction in the  allowance for loan losses was
recognized as income during the period.

        During the year ended  December 31,  1995,  the  Partnership  received a
settlement  on one of its  notes  receivable  from  a  cable  television  system
operator which was considered to be impaired. The Partnership received a partial
recovery  of $40,000 as a  settlement  which was  applied  towards  the  $58,000
outstanding  note  receivable  balance.  The  remaining  balance of $18,000  was
written-off through its related allowance for loan losses. The related allowance
for loan losses for this note  receivable was provided for in a previous year in
an  amount  equal  to the  carrying  value  of the  note.  Upon  receipt  of the
settlement of this note  receivable,  the Partnership  reduced the allowance for
loan losses by $37,000 during the year ended  December 31, 1995.  This reduction
in the allowance for loan losses was recognized as a negative provision for loan
losses during the period.

        The  Partnership  received  a  settlement  from  another  impaired  note
receivable  and  foreclosed  upon the assets of another note  receivable  from a
cable television system operator during the year ended December 31, 1995.

        The activity in the allowance for losses on notes receivable  during the
years ended December 31, is as follows:

                                                            1996      1995
                                                           ------    ------
                                                        (Amounts in Thousands)

        Beginning balance                                  $  706    $  202
          Provision for (recovery of) losses                 (190)      558
          Write downs                                        (516)      (54)
                                                           ------    ------
        Ending balance                                     $ --      $  706
                                                           ======    ======


Note 5.    Equipment on Operating Leases and Investment in Financing Leases.

        Equipment  on lease  consists  of capital  equipment  leased to emerging
growth companies  subject to operating and financing  leases.  The Partnership's
equipment on operating leases is fully depreciated.

        The  Partnership  has also entered into direct lease  arrangements  with
certain lessees concentrated in the following industries: 6% communications,  3%
retail and 91% manufacturing.  Generally, it is the responsibility of the lessee
to provide maintenance on leased equipment.  The General Partner administers the
equipment  portfolio  of leases  acquired  through the direct  leasing  program.
Administration includes the collection of rents from the lessees and remarketing
of the equipment.



<PAGE>


                                                                   Page 18 of 26


        The net  investment  in financing  leases  consists of the  following at
December 31:

                                                         1996          1995
                                                        ------        ------
                                                       (Amounts in Thousands)

        Minimum lease payments to be received           $  104        $  352
        Less: unearned income                               (5)          (41)
                                                        ------        ------

        Net investment in financing leases              $   99        $  311
                                                        ======        ======

        Minimum rentals to be received on noncancelable  financing and operating
leases for the years ended December 31 are as follows:

                                                       Financing     Operating
                                                       ---------     ---------
                                                        (Amounts in Thousands)

        1997.....................................         $104           $-
        1998 and thereafter......................          -              -
                                                          ----           --

        Total                                             $104           $-
                                                          ====           ==

        All  equipment  was held for lease at December  31,  1996.  The net book
value of equipment held for lease at December 31, 1996 and 1995 amounted to $0.


Note 6.    Investment in Joint Ventures.

Foreclosed Cable Systems Joint Ventures

        The  Partnership  owns an interest in  foreclosed  cable  systems  joint
ventures,  along with other partnerships  managed by the General Partner and its
affiliates.  The Partnership  foreclosed upon  nonperforming  outstanding  notes
receivable to cable  television  operators to whom the  Partnership,  along with
other  affiliated  partnerships  managed by the General  Partner,  had  extended
credit. The partnerships'  notes receivables were exchanged for interests (their
capital contribution), on a pro rata basis, in newly formed joint ventures owned
by the  partnerships  and  managed by the  General  Partner.  Title to the cable
television  systems  is  held  by the  joint  ventures.  These  investments  are
accounted for using the equity method of accounting.

        The joint ventures owned by the Partnership, along with their percentage
ownership is as follows:

                                                                  Percentage
           Joint Venture                                           Ownership
           -------------                                           ---------

           Phoenix Black Rock Cable J.V.(1)                            2.45%
           Phoenix Pacific Northwest J.V.                             19.82
           Phoenix Independence Cable, LLC                            17.75

        (1)cable system sold and joint venture closed during 1996.

<TABLE>
        An analysis of the  Partnership's  net  investment in  foreclosed  cable systems joint ventures
is as follows:
<CAPTION>
                      Net Investment                                                 Net Investment
                       at Beginning                    Equity in        Equity in        at End
Date                     of Period     Contributions   Earnings       Distributions     of Period
----                  --------------   -------------   ---------      -------------  --------------
                                                        (Amounts in Thousands)
<S>                       <C>             <C>            <C>            <C>               <C>      
Year Ended
  December 31, 1994       $  194          $-             $   10         $   23            $  181
                          ======          ====           ======         ======            ======

Year Ended
  December 31, 1995       $  181          $ 94           $    2         $   11            $  266
                          ======          ====           ======         ======            ======


<PAGE>


                                                                   Page 19 of 26


Year Ended
  December 31, 1996       $  266          $-             $   18         $   87            $  197
                          ======          ====           ======         ======            ======
</TABLE>

        The aggregate  combined  financial  information of the foreclosed  cable
systems  joint  ventures  as of  December  31 and for the  years  then  ended is
presented as follows:

                             COMBINED BALANCE SHEETS

                                     ASSETS

                                                             December 31,
                                                            1996      1995
                                                           ------    ------
                                                        (Amounts in Thousands)

        Cash and cash equivalents                          $   51    $  337
        Accounts receivable                                    32        60
        Property, plant and equipment                       1,128     2,628
        Other                                                   4         3
                                                           ------    ------

           Total Assets                                    $1,215    $3,028
                                                           ======    ======

                        LIABILITIES AND PARTNERS' CAPITAL

        Accounts payable                                   $  172    $  187
        Partners' capital                                   1,043     2,841
                                                           ------    ------

           Total Liabilities and Partners' Capital         $1,215    $3,028
                                                           ======    ======


                        COMBINED STATEMENTS OF OPERATIONS

                                     INCOME

                                              For the Years Ended December 31,
                                                  1996      1995      1994
                                                 ------    ------    ------
                                                   (Amounts in Thousands)

        Subscriber revenue                       $  483    $1,003    $  916
        Gain on sale of cable system              1,185      --        --
        Other income                                 14        10         5
                                                 ------    ------    ------

           Total Income                           1,682     1,013       921
                                                 ------    ------    ------


                                    EXPENSES

        Depreciation and amortization               139       233       212
        Program services                            168       288       230
        Management fee to an affiliate
          of the General Partner                    140        45        40
        General and administrative expenses         201       314       229
        Provision for losses on accounts
          receivable                                  4        10        12
                                                 ------    ------    ------

           Total Expenses                           652       890       723
                                                 ------    ------    ------

           Net Income                            $1,030    $  123    $  198
                                                 ======    ======    ======

        Phoenix  Cable  Management  Inc.  (PCMI),  an  affiliate  of the General
Partner,  provides  day  to day  management  services  in  connection  with  the
operation of the foreclosed  cable systems joint ventures.  The foreclosed cable
systems  joint  ventures  will pay a  management  fee equal to four and one-half
percent of the System's  monthly  gross revenue  for  these  services.  Revenues


<PAGE>


                                                                   Page 20 of 26


subject  to a management  fee at the joint venture level will not be  subject to
management fees at the Partnership level.


Note 7.    Accounts Payable and Accrued Expenses.

        Accounts  payable  and  accrued  expenses  consist of the  following  at
December 31:

                                                          1996      1995
                                                         ------    ------
                                                      (Amounts in Thousands)

        General Partner and affiliates                   $    3    $    4
        Security deposits                                     6        12
        Equipment lease operations                            1        14
        Other                                                14        14
                                                         ------    ------

           Total                                         $   24    $   44
                                                         ======    ======


Note 8.    Income Taxes.

        Federal  and state  income  tax  regulations  provide  that taxes on the
income  or loss of the  Partnership  are  reportable  by the  partners  in their
individual income tax returns. Accordingly, no provision for such taxes has been
made in the accompanying financial statements of the Partnership.

        The net difference between the tax basis and the reported amounts of the
Partnership's assets and liabilities are as follows at December 31:

                            Reported Amounts     Tax Basis       Net Difference
                            ----------------     ---------       --------------
                                           (Amounts in Thousands)

1996
----

        Assets                   $ 1,844          $ 1,754           $   90
        Liabilities                   24              (11)              35

1995
----

        Assets                   $ 2,017          $ 2,542           $ (525)
        Liabilitites                  44               30               14


Note 9.    Related Entities.

        The General  Partner and its affiliates also are, or have been a general
partner in other limited  partnerships,  most of which are generally  engaged in
the equipment leasing business,  but some of which provide financing to emerging
growth companies and operators of cable television systems.


Note 10.   Reimbursed Costs to the General Partner.

        The General Partner incurs certain  administrative  costs,  such as data
processing,   investor   and  lessee   communications,   lease   administration,
accounting,  equipment  storage  and  equipment  remarketing,  for  which  it is
reimbursed by the  Partnership.  These expenses  incurred by the General Partner
are to be  reimbursed at the lower of the actual costs or an amount equal to 90%
of the fair market value for such services.

        The reimbursed administrative costs to the General Partner were $13,000,
$17,000  and  $23,000  for the years ended  December  31,  1996,  1995 and 1994,
respectively.  The equipment  storage,  remarketing  and data  processing  costs
reimbursed to the General Partner during the years ended December 31, 1996, 1995
and 1994 were $0, $0 and $2,000, respectively.


<PAGE>


                                                                   Page 21 of 26


        In  addition,  the  General  Partner  receives a  management  fee and an
acquisition fee for services rendered in connection with equipment  acquisitions
(see Note 1).


Note 11.   Net Income (Loss) and Distributions per Limited Partnership Unit.

        Net income (loss) and  distributions  per limited  partnership unit were
based on the Limited Partners' share of net income (loss) and distributions, and
the weighted  average  number of units  outstanding of 7,526 for the years ended
December 31, 1996,  1995 and 1994. For the purposes of allocating  income (loss)
and distributions to each individual Limited Partner, the Partnership  allocates
net income (loss) and distributions based upon each respective Limited Partner's
ending capital account balance.


Note 12.   Fair Value of Financial Instruments.

        The  following  methods and  assumptions  were used to estimate the fair
value of each  class of  financial  instrument  for which it is  practicable  to
estimate that value.

Cash and Cash Equivalents
The carrying amount of cash and cash equivalents approximates fair value because
of the short maturity of these instruments.

Notes Receivable
The fair  value of notes  receivable  is  estimated  based on the  lesser of the
discounted  expected  future cash flows using the current rates at which similar
loans would be made to borrowers with similar credit  ratings,  or the estimated
fair  value of the  underlying  collateral.  Please  refer to  footnote  4 for a
description of the Partnership's  accounting  policies on notes receivable which
contribute to the difference between the carrying amount and the fair value.

Securities, Available-for-Sale
The fair values of  investments in  available-for-sale  securities are estimated
based on quoted market prices.

        The estimated fair values of the Partnership's financial instruments are
as follows at December 31:
      
                                                   Carrying
                                                    Amount       Fair Value
                                                   --------      ----------
                                                    (Amounts in Thousands)

1996
----

        Assets
           Cash and cash equivalents               $ 1,499        $ 1,499

1995
----

        Assets
           Cash and cash equivalents               $   655        $   655
           Securities, available-for-sale              149            149
           Notes receivable                            581            672


Note 13.   Subsequent Events.

        In January 1997, cash  distributions of $12,000 and $1,157,000 were made
to the General and Limited Partners, respectively.


<PAGE>


                                                                   Page 22 of 26


Item 9.    Disagreements on Accounting and Financial Disclosure Matters.

        None.


                                    PART III

Item 10.   Directors and Executive Officers of the Registrant.

        The registrant is a limited partnership and, therefore, has no executive
officers or directors.  The general partner of the registrant is Phoenix Leasing
Incorporated,  a California corporation. The directors and executive officers of
Phoenix Leasing Incorporated (PLI) are as follows:

        GUS  CONSTANTIN,  age 59, is President,  Chief  Executive  Officer and a
Director of PLI. Mr.  Constantin  received a B.S. degree in Engineering from the
University of Michigan and a Master's Degree in Management Science from Columbia
University.  From 1969 to 1972,  he served as Director,  Computer and  Technical
Equipment of DCL Incorporated  (formerly Diebold Computer Leasing Incorporated),
a  corporation  formerly  listed on the  American  Stock  Exchange,  and as Vice
President  and  General  Manager  of DCL  Capital  Corporation,  a  wholly-owned
subsidiary of DCL Incorporated. Mr. Constantin was actively engaged in marketing
manufacturer  leasing programs to computer and medical  equipment  manufacturers
and in directing DCL Incorporated's IBM System/370 marketing  activities.  Prior
to  1969,  Mr.  Constantin  was  employed  by IBM as a data  processing  systems
engineer for four years. Mr. Constantin is an individual general partner in four
active partnerships and is an NASD registered  principal.  Mr. Constantin is the
founder of PLI and the  beneficial  owner of all of the common  stock of Phoenix
American Incorporated.

        PARITOSH K. CHOKSI,  age 43, is Senior Vice  President,  Chief Financial
Officer,  Treasurer and a Director of PLI. He has been associated with PLI since
1977.  Mr. Choksi  oversees the finance,  accounting,  information  services and
systems  development  departments of the General  Partner and its Affiliates and
oversees the structuring,  planning and monitoring of the partnerships sponsored
by the General Partner and its Affiliates.  Mr. Choksi graduated from the Indian
Institute of Technology, Bombay, India with a degree in Engineering. He holds an
M.B.A. degree from the University of California, Berkeley.

        GARY W.  MARTINEZ,  age 46, is Senior Vice  President  and a Director of
PLI. He has been associated with PLI since 1976. He manages the Asset Management
Department,  which is responsible for lease and loan portfolio management.  This
includes credit analysis,  contract terms, documentation and funding; remittance
application,  change processing and maintenance of customer  accounts;  customer
service, invoicing,  collection,  settlements and litigation;  negotiating lease
renewals,  extensions,  sales and buyouts; and management information reporting.
From 1973 to 1976, Mr.  Martinez was a Loan Officer with Crocker  National Bank,
San  Francisco.  Prior to 1973,  he was an Area Manager with  Pennsylvania  Life
Insurance  Company.  Mr. Martinez is a graduate of California State  University,
Chico.

        BRYANT J. TONG, age 42, is Senior Vice President,  Financial  Operations
of PLI. He has been with PLI since 1982.  Mr. Tong is  responsible  for investor
services and overall company  financial  operations.  He is also responsible for
the technical and  administrative  operations of the cash management,  corporate
accounting,  partnership accounting,  accounting systems,  internal controls and
tax  departments,  in addition to Securities  and Exchange  Commission and other
regulatory  agency  reporting.  Prior to his association  with PLI, Mr. Tong was
Controller-Partnership  Accounting with the Robert A. McNeil Corporation for two
years and was an auditor with Ernst & Whinney  (succeeded by Ernst & Young) from
1977 through 1980.  Mr. Tong holds a B.S. in Accounting  from the  University of
California, Berkeley, and is a Certified Public Accountant.

        CYNTHIA  E.  PARKS,  age 41,  is Vice  President,  General  Counsel  and
Assistant  Secretary  of PLI.  Prior to joining  PLI in 1984,  she was with GATX
Leasing  Corporation,  and had  previously  been  Corporate  Counsel  for  Stone
Financial  Companies,  and an Assistant  Vice  President of the Bank of America,
Bank Amerilease  Group. She has a Bachelor's degree from Santa Clara University,
and earned her J.D. from the University of San Francisco School of Law.

        Neither the General  Partner  nor any  Executive  Officer of the General
Partner has any family relationship with the others.

        Phoenix  Leasing  Incorporated  or  its  affiliates  and  the  executive
officers of the General  Partner  serve in a similar  capacity to the  following
affiliated limited partnerships:

           Phoenix Leasing American Business Fund, L.P.


<PAGE>


                                                                   Page 23 of 26


           Phoenix Leasing Cash Distribution Fund V, L.P.
           Phoenix Income Fund, L.P.
           Phoenix Leasing Cash Distribution Fund IV
           Phoenix Leasing Cash Distribution Fund III
           Phoenix Leasing Cash Distribution Fund II
           Phoenix Leasing Income Fund VII
           Phoenix Leasing Income Fund VI
           Phoenix Leasing Growth Fund 1982 and
           Phoenix Leasing Income Fund 1977


Item 11.   Executive Compensation.
<TABLE>
        Set forth is the information relating to all direct remuneration paid or accrued by the Registrant
during the last year to the General Partner.
<CAPTION>
        (A)                 (B)                              (C)                          (D)
                                                        Cash and cash-               Aggregate of
Name of Individual      Capacities in                   equivalent forms             contingent forms
or persons in group     which served                    of remuneration              of remuneration
-------------------     ------------          -----------------------------------    ----------------
                                                 (C1)                     (C2)
                                                                  Securities or property
                                     Salaries, fees, directors'   insurance benefits or
                                     fees, commissions, and       reimbursement, personal
                                     bonuses                      benefits
                                     -------------------------    -----------------------
                                                     (Amounts in Thousands)
<S>                     <C>                     <C>                      <C>                  <C>    
Phoenix Leasing
  Incorporated          General Partner         $40(1)                   $0                   $0
                                                 ==                       =                    =
</TABLE>

(1)  consists of management fees.


Item 12.   Security Ownership of Certain Beneficial Owners and Management.

        (a)As of December 31, 1996,  the  following  investors  had a beneficial
           ownership  of more  than 5% of the  outstanding  Limited  Partnership
           units:

                 Name and Address             Amount and Nature of      Percent
Title of Class   of Beneficial Owner          Beneficial Ownership      of Class
--------------   -------------------          --------------------      --------

Limited Partner  Independent Life & Accident      1,000 units            13.29%
                 Insurance Company
                 One Independent Drive
                 Jacksonville, FL  32276


<PAGE>


                                                                   Page 24 of 26


                 Name and Address             Amount and Nature of      Percent
Title of Class   of Beneficial Owner          Beneficial Ownership      of Class
--------------   -------------------          --------------------      --------

Limited Partner  Phoenix Leasing Incorporated      576.7 units            7.66%
                 2401 Kerner Boulevard
                 San Rafael, CA  94901

        (b)The General Partner of the Registrant  owns the equity  securities of
           the Registrant set forth in the following table:

        (1)                              (2)                          (3)
   Title of Class             Amount Beneficially Owned        Percent of Class
   --------------             -------------------------        ----------------

General Partner Interest    Represents a 1% interest in the           100%
                            Registrant's profits and 
                            distributions, until the Limited
                            Partners have recovered their
                            capital contributions plus a
                            cumulative return of 16% per annum,
                            compounded quarterly, on the 
                            unrecovered portion thereof.
                            Thereafter, the General Partner 
                            will receive 20% interest in the
                            Registrant's profits and 
                            distributions.

Limited Partner Interest    576.7 units                              7.66%


Item 13.   Certain Relationships and Related Transactions.

        None.

                                     PART IV

Item 14.   Exhibits, Financial Statement Schedules, and Reports on Form 8-K.

                                                                      Page No.
                                                                      --------
(a)     1. Financial Statements:

           Report of Independent Public Accountants                        9
           Balance Sheets as of December 31, 1996 and 1995                10
           Statement of Operations for the Years Ended December
             31, 1996, 1995 and 1994                                      11
           Statements of Partners' Capital for the Years Ended
             December 31, 1996, 1995 and 1994                             12
           Statements of Cash Flows for the Years Ended December
             31, 1996, 1995 and 1994                                      13
           Notes to Financial Statements                               14-21

        2. Financial Statement Schedules:

           Schedule II - Valuation and Qualifying Account
             and Reserves                                                 26

        All other schedules are omitted because they are not applicable,  or not
required,  or because the  required  information  is  included in the  financial
statements or notes thereto.

(b)     Reports on Form 8-K:

        No reports on Form 8-K were filed for the  quarter  ended  December  31,
1996.

(c)     Exhibits:

        21. Additional Exhibits:
            Balance Sheets of Phoenix Leasing Incorporated          E21 1-12

        27. Financial Data Schedule.


<PAGE>


                                                                   Page 25 of 26


                                   SIGNATURES

        Pursuant to the  requirements  of Section 13 or 15(d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                                          PHOENIX HIGH TECH/HIGH YIELD FUND
                                                      (Registrant)

                                          BY:   PHOENIX LEASING INCORPORATED,
                                                A CALIFORNIA CORPORATION
                                                GENERAL PARTNER


        Date:  March 25, 1997             By:   /S/  GUS CONSTANTIN
               --------------                   -------------------------
                                                Gus Constantin, President

        Pursuant to the  requirements  of the  Securities  Exchange Act of 1934,
this  report has been  signed  below by the  following  persons on behalf of the
Registrant and in the capacities and on the dates indicated.

        Signature                      Title                          Date
        ---------                      -----                          ----


/S/GUS CONSTANTIN      President, Chief Executive Officer and a   March 25, 1997
---------------------  Director of Phoenix Leasing Incorporated   --------------
(Gus Constantin)       General Partner


/S/PARITOSH K. CHOKSI  Chief Financial Officer,                   March 25, 1997
---------------------  Senior Vice President,                     --------------
(Paritosh K. Choksi)   Treasurer and a Director of
                       Phoenix Leasing Incorporated
                       General Partner


/S/BRYANT J. TONG      Senior Vice President,                     March 25, 1997
---------------------  Financial Operations of                    --------------
(Bryant J. Tong)       (Principal Accounting Officer)
                       Phoenix Leasing Incorporated
                       General Partner


/S/GARY W. MARTINEZ    Senior Vice President and a Director of    March 25, 1997
---------------------  Phoenix Leasing Incorporated               --------------
(Gary W. Martinez)     General Partner


/S/MICHAEL K. ULYATT   Partnership Controller                     March 25, 1997
---------------------  of Phoenix Leasing Incorporated            --------------
(Michael K. Ulyatt)    General Partner


<PAGE>

<TABLE>
                                                                                                Page 26 of 26


                                            PHOENIX HIGH TECH/HIGH YIELD FUND,
                                             A CALIFORNIA LIMITED PARTNERSHIP

                                                        SCHEDULE II
                                                  (Amounts in Thousands)


SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES


<CAPTION>
           COLUMN A                COLUMN B         COLUMN C        COLUMN D          COLUMN E          COLUMN F
        Classification            Balance at       Charged to      Charged to        Deductions        Balance at
                                 Beginning of       Expense          Revenue                             End of
                                    Period                                                               Period
------------------------------  --------------- ----------------  -------------  ------------------- --------------

<S>                                 <C>              <C>              <C>              <C>                <C>      
Year ended December 31, 1994
  Allowance for losses on accounts
    receivable                      $  47            $  0             $  31            $  15              $  1
  Allowance for losses on notes
    receivable                        180              22                 0                0               202
                                    -----            ----             -----            -----              ----

    Totals                          $ 227            $ 22             $  31            $  15              $203
                                    =====            ====             =====            =====              ====


Year ended December 31, 1995
  Allowance for losses on accounts
    receivable                      $   1            $  5             $   0            $   6              $  0
  Allowance for losses on notes
    receivable                        202             558                 0               54               706
                                    -----            ----             -----            -----              ----

    Totals                          $ 203            $563             $   0            $  60              $706
                                    =====            ====             =====            =====              ====


Year ended December 31, 1996
  Allowance for losses on notes
    receivable                      $ 706            $  0             $ 190            $ 516              $  0
                                    -----            ----             -----            -----              ----

    Totals                          $ 706            $  0             $ 190            $ 516              $  0
                                    =====            ====             =====            =====              ====

</TABLE>