<PAGE>

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q
(Mark One)

             /X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF

                       THE SECURITIES EXCHANGE ACT OF 1934

                  For the quarterly period ended June 30, 2004

                                       OR

            / / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF

                       THE SECURITIES EXCHANGE ACT OF 1934

        For the transition period from _______________ to ______________

                        Commissions file number 333-84730




                     LEASE EQUITY APPRECIATION FUND I, L.P.
             (Exact name of registrant as specified in its charter)

           Delaware                                   68-0492247
   (State of Organization)               (I.R.S. Employer Identification No.)

                         1845 Walnut Street, Suite 1000
                        Philadelphia, Pennsylvania 19103
               (Address of principal executive offices) (Zip Code)


                                 (215) 574-1636
              (Registrant's telephone number, including area code)


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 [ ]

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Exchange Act Rule 12b-2) of the Act.

                                Yes [ ] No [X]

<PAGE>
                     LEASE EQUITY APPRECIATION FUND I, L.P.

                            INDEX TO QUARTERLY REPORT
                                  ON FORM 10-Q
<TABLE>
<CAPTION>
                                                                                                                 PAGE
                                                                                                                 ----
<S>                   <C>                                                                                       <C>
PART I                 FINANCIAL INFORMATION

   Item 1.             Financial Statements

                       Balance Sheets - June 30, 2004 and December 31, 2003 (Audited)....................           3

                       Statements of Operations (Unaudited) for the Three and Six Months
                            Ended June 30, 2004 and 2003.................................................           4

                       Statement of Partner's Capital (Unaudited) for the Six Months
                            Ended June 30, 2004..........................................................           5

                       Statement of Cash Flows (Unaudited)
                            For the Six Months Ended June 30, 2004 and 2003..............................           6

                       Notes to Consolidated Financial Statements - June 30, 2004 (Unaudited)............      7 - 16

   Item 2.             Management's Discussion and Analysis of Financial Condition
                            and Results of Operations....................................................     17 - 23

   Item 3.             Quantitative and Qualitative Disclosures about Market Risk........................          23

   Item 4.             Controls and Procedures...........................................................          23

PART II                OTHER INFORMATION

   Item 1.             Legal Proceedings.................................................................          24

   Item 2.             Changes in Securities and Use of Proceeds.........................................          24

   Item 3.             Defaults upon Senior Securities...................................................          25

   Item 4.             Submission of Matters to a Vote of Security Holders...............................          25

   Item 5.             Other Information.................................................................          25

   Item 6.             Exhibits and Reports on Form 8-K..................................................          25

SIGNATURES..............................................................................................           26
</TABLE>
                                       2

<PAGE>
                          PART I. FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS


                     LEASE EQUITY APPRECIATION FUND I, L.P.
                                 BALANCE SHEETS
<TABLE>
<CAPTION>
                                                                                          June 30,          December 31,
                                                                                           2004                2003
                                                                                        (Unaudited)          (Audited)
                                                                                       -------------       -------------
<S>                                                                                   <C>                 <C>
ASSETS
Cash............................................................................       $   1,306,896       $   1,030,394
Accounts receivable.............................................................              24,474              85,372
Other receivables...............................................................           2,157,469           2,169,877
Net due from related parties....................................................             416,231             128,833
Net investment in direct financing leases (net of allowance for possible
   losses of $45,000 and $5,000)................................................          36,534,991          24,216,771
Equipment under operating leases (net of accumulated depreciation of
   $256,425 and $154,113).......................................................             211,167             313,479
Other assets....................................................................             277,391             267,821
                                                                                       -------------       -------------
                                                                                       $  40,928,619       $  28,212,547
                                                                                       =============       =============
LIABILITIES AND PARTNERS' CAPITAL

LIABILITIES:
   Debt.........................................................................       $  30,796,840       $  20,386,402
   Accounts payable and accrued expenses........................................             194,308             308,370
   Partners' distributions payable..............................................              80,960              65,676
   Subscription deposits........................................................             456,000                   -
                                                                                       -------------       -------------
   Total liabilities............................................................          31,528,108          20,760,448
Partners' capital...............................................................           9,400,511           7,452,099
                                                                                       -------------       -------------
                                                                                       $  40,928,619       $  28,212,547
                                                                                       =============       =============
</TABLE>

   The accompanying notes are an integral part of these financial statements.

                                       3
<PAGE>
                     LEASE EQUITY APPRECIATION FUND I, L.P.
                            STATEMENTS OF OPERATIONS
                                   (UNAUDITED)
<TABLE>
<CAPTION>
                                                                 Three Months Ended            Six Months Ended
                                                                     June  30,                     June 30,
                                                             -------------------------    ---------------------------
                                                                 2004          2003          2004            2003
                                                             -----------   -----------    -----------     -----------
<S>                                                          <C>           <C>            <C>             <C>
Interest and rental income...........................        $   655,559   $   225,238    $ 1,267,608     $   260,621
Interest expense.....................................            392,396        52,249        766,612          64,653
                                                             -----------   -----------    -----------     -----------
     Net interest and rental.........................            263,163       172,989        500,996         195,968
Other income.........................................             20,772         2,522         94,715           3,072
                                                             -----------   -----------    -----------     -----------
                                                                 283,935       175,511        595,711         199,040
                                                             -----------   -----------    -----------     -----------

Expenses reimbursed to related party.................             61,632       158,985        278,147         179,898
General and administrative...........................             99,948        73,730        153,944          73,844
Management fee to related party......................             64,952        23,251        145,292          26,067
Depreciation.........................................             48,799        59,728        102,312          61,502
                                                             -----------   -----------    -----------     -----------
                                                                 275,331       315,694        679,695         341,314
                                                             -----------   -----------    -----------     -----------
   Net income (loss).................................        $     8,604   $  (140,183)   $   (83,984)    $  (142,274)
                                                             ===========   ===========    ===========     ===========
Net income (loss) per weighted average limited
   partnership unit..................................        $      0.07   $     (3.70)   $     (0.77)    $     (4.17)
                                                             ===========   ===========    ===========     ===========
Weighted average number of limited partnership
   units outstanding during the period...............            115,967        37,507        107,433          33,799
                                                             ===========   ===========    ===========     ===========
</TABLE>

   The accompanying notes are an integral part of these financial statements.

                                       4
<PAGE>
                     LEASE EQUITY APPRECIATION FUND I, L.P.
                         STATEMENT OF PARTNERS' CAPITAL
                     FOR THE SIX MONTHS ENDED JUNE 30, 2004
                                   (UNAUDITED)
<TABLE>
<CAPTION>
                                                      General Partner              Limited Partners         Partners' Capital
                                                      ---------------          -----------------------      -----------------
                                                          Amount                Units         Amount              Total
                                                        -----------            -------     -----------        -------------
<S>                                                    <C>                     <C>        <C>                <C>
Balance, January 1, 2004..........................      $    (7,757)            95,693     $ 7,459,856        $   7,452,099
   Partners' contributions........................                -             25,840       2,583,508            2,583,508
   Offering costs related to the sale of
     Partnership units............................                -                  -        (366,027)            (366,027)
   Distributions paid.............................           (3,509)                 -        (348,395)            (351,904)
   Partners' distributions payable..................           (810)                 -         (80,150)             (80,960)
   Distributions reinvested.........................              -              2,515         247,779              247,779
   Net loss.......................................             (840)                 -         (83,144)             (83,984)
                                                        -----------            -------     -----------        -------------
Balance, June 30, 2004............................      $   (12,916)           124,048     $ 9,413,427        $   9,400,511
                                                        ===========            =======     ===========        =============
</TABLE>

     Accompanying notes are an integral part of these financial statements.

                                       5
<PAGE>
                     LEASE EQUITY APPRECIATION FUND I, L.P.
                             STATEMENT OF CASH FLOWS
                                   (UNAUDITED)
<TABLE>
<CAPTION>
                                                                                       Six Months Ended June 30,
                                                                                        2004               2003
                                                                                    ------------       ------------
<S>                                                                                <C>                <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net loss....................................................................     $    (83,984)      $   (142,274)
   Adjustments to reconcile net loss to net cash used in operating activities:
   Gain on sale of equipment and lease dispositions, net.......................          (54,319)           (19,036)
   Depreciation................................................................          102,312             61,504
   Provision for possible losses...............................................           40,000                  -
   Amortization of deferred financing costs....................................           25,768                  -
   Decrease (increase) in accounts receivable..................................           60,898           (200,937)
   Increase in due from related parties, net...................................         (287,398)           (27,339)
   Decrease in other assets....................................................           10,681                  -
   (Decrease) increase in accounts payable and accrued expenses................         (114,062)           172,275
                                                                                    ------------       ------------
     Net cash used in operating activities.....................................         (300,104)          (155,807)

CASH FLOWS FROM INVESTING ACTIVITIES:
   Investment in direct financing leases.......................................      (16,417,170)        (8,977,745)
   Proceeds from direct financing leases, net of earned income.................        3,181,334            673,062
   Security deposits received, net.............................................           79,762             99,870
   Acquisition of equipment under operating leases.............................                -           (554,059)
   Proceeds from sale of equipment and lease dispositions......................          852,173            137,522
                                                                                    ------------       ------------
     Net cash used in investing activities.....................................      (12,303,901)        (8,621,350)
                                                                                    ------------       ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
   Proceeds from debt..........................................................       13,628,583          6,267,118
   Repayment of debt...........................................................       (3,218,145)        (1,500,000)
   Increase in deferred financing costs........................................          (33,611)                 -
   Increase in subscription deposits...........................................          456,000                  -
   Partners' capital contributions.............................................        2,583,508          5,028,663
   Cash distributions to partners..............................................         (417,580)          (126,754)
   Cash distributions reinvested by partners...................................          247,779             55,400
   Payment of offering costs incurred for the sale of partnership units........         (366,027)          (654,024)
                                                                                    ------------       ------------
     Net cash provided by financing activities.................................       12,880,507          9,070,403
                                                                                    ------------       ------------
Increase in cash...............................................................          276,502            293,246
Cash, beginning of period......................................................        1,030,394              1,001
                                                                                    ------------       ------------
Cash, end of period............................................................     $  1,306,896       $    294,247
                                                                                    ============       ============
</TABLE>

   The accompanying notes are an integral part of these financial statements.

                                       6
<PAGE>
                     LEASE EQUITY APPRECIATION FUND I, L.P.
                          NOTES TO FINANCIAL STATEMENTS
                                  JUNE 30, 2004

BASIS OF PRESENTATION

         The accompanying financial statements have been prepared by Lease
Equity Appreciation Fund I ("the Fund") in accordance with accounting principles
generally accepted in the United States of America, pursuant to the rules and
regulations of the Securities and Exchange Commission. In the opinion of
management, all adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included. These unaudited financial
statements should be read in conjunction with the audited financial statements
and notes thereto included in the Fund's Annual Report on Form 10-K for the
fiscal year ended December 31, 2003. The results for the six months ended June
30, 2004 are not necessarily indicative of the results that may be expected for
the year ending December 31, 2004.

         Certain reclassifications have been made to the financial statements as
of December 31, 2003 and June 30, 2003 to conform to the presentation for the
three and six month period ended June 30, 2004.

NOTE 1 - ORGANIZATION AND NATURE OF BUSINESS

         The Fund is a Delaware limited partnership that was formed on January
31, 2002. On June 30, 2004, the Fund's general partner, LEAF Asset Management,
Inc. merged into its parent, LEAF Financial Corporation ("the General Partner"
or "LEAF"). LEAF is a wholly owned subsidiary of Resource Leasing, Inc., a
wholly owned subsidiary of Resource America, Inc. Resource America, Inc. is a
publicly-traded company (NASDAQ: REXI) operating in the real estate, financial
services, energy and equipment leasing sectors.

         As of June 30, 2004, the Fund raised $11,954,643 through the sale of
120,150 limited partnership units and $384,943 from the sale of 3,898 limited
partnership units from the reinvestment by limited partners of cash
distributions. The Fund seeks to acquire a diversified portfolio of equipment to
lease to end users throughout the United States. The Fund also seeks to acquire
existing portfolios of equipment subject to existing leases from other equipment
lessors. The primary objective of the Fund is to generate regular cash
distributions to the limited partners from its equipment lease portfolio over
the life of the Fund.

         As of June 30, 2004 and December 31, 2003, respectively, the General
Partner also held 4.2% and 5.0% limited partnership interests in the Fund. The
Fund will terminate on December 31, 2027, or earlier, if a dissolution event
occurs as defined in the Fund's Limited Partnership Agreement (the "Partnership
Agreement").

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

FINANCIAL STATEMENT CLASSIFICATION

         Management believes that, consistent with the financial statement
presentation of other equipment leasing companies, it is more appropriate to
present the Fund's balance sheets on a non-classified basis, which does not
segregate assets and liabilities into current and non-current categories.


                                       7
<PAGE>
                     LEASE EQUITY APPRECIATION FUND I, L.P.
                   NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
                                  JUNE 30, 2004

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (CONTINUED)

USE OF ESTIMATES

         Preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America ("U.S. GAAP")
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and the disclosure of contingent assets and
liabilities as of the date of the financial statements and the reported amounts
of revenues and expenses during the reporting period. Significant estimates
include the estimated residual values of leased equipment, the allowance for
possible losses and impairment of long-lived assets. Actual results could differ
from those estimates.

         Unguaranteed residual value represents the estimated amount to be
received at lease termination from lease extensions or ultimate disposition of
the leased equipment. The estimates of residual values are based upon the Fund's
history with regard to the realization of residuals, available industry data and
senior management's prior experience with respect to comparable equipment. The
estimated residual values are recorded as a component of investments in leases
on a net present value basis. Residual values are reviewed periodically to
determine if the current estimate of the equipment's fair market value appears
to be below its recorded estimate. If required, residual values are adjusted
downward to reflect adjusted estimates of fair market values. In accordance with
U.S. GAAP, upward adjustments to residual values are not permitted.

         The Fund's allowance for possible losses is primarily based on factors
which include the Fund's historical loss experience, an analysis of contractual
delinquencies, economic conditions and trends, industry statistics and lease
portfolio characteristics. The Fund's policy is to charge off to the allowance
those leases which are in default and for which management has determined the
probability of collection to be remote.

         The Fund reviews its long-lived assets for impairment whenever events
or circumstances indicate that the carrying amount of such assets may not be
recoverable. If it is determined that estimated undiscounted future cash flows
derived from long-lived assets will not be sufficient to recover their carrying
amounts, an impairment charge will be recorded to reduce the carrying amounts to
the assets' estimated fair values.

CONCENTRATION OF CREDIT RISK

         Financial instrument which potentially subject the Fund to
concentrations of credit risk consist of excess cash. The Fund deposits its
excess cash in high-quality financial institutions. At June 30, 2004, the Fund
had deposits at two banks totaling $1,633,713, of which $1,433,713 was over the
insurance limit of the Federal Deposit Insurance Corporation. No losses have
been experienced on such deposits.


                                       8
<PAGE>
                     LEASE EQUITY APPRECIATION FUND I, L.P.
                   NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
                                  JUNE 30, 2004

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (CONTINUED)

REVENUE RECOGNITION

         The Fund's investment in leases consists of direct financing and
operating leases which are recorded in accordance with Statement of Financial
Accounting Standards No. 13, "Accounting for Leases," and its various amendments
and interpretations.

         Certain of the Fund's lease transactions are accounted for as direct
financing leases (as distinguished from operating leases). Such leases transfer
substantially all benefits and risks of equipment ownership to the customer. A
lease is a direct financing lease if the creditworthiness of the customer and
the collectibility of lease payments are reasonably certain and it meets one of
the following criteria: (i) the lease transfers ownership of the equipment to
the customer at the end of the lease term; (ii) the lease contains a bargain
purchase option; (iii) the lease term at inception is at least 75% of the
estimated economic life of the leased equipment; or (iv) the present value of
the minimum lease payments is at least 90% of the fair market value of the
leased equipment at inception of the lease. The Fund's investment in direct
financing leases consists of the sum of the total future minimum lease payments
receivable and the estimated unguaranteed residual value of leased equipment,
less unearned lease income. Unearned lease income, which is recognized as
revenue over the term of the lease by the effective interest method, represents
the excess of the total future minimum lease payments plus the estimated
unguaranteed residual value expected to be realized at the end of the lease term
over the cost of the related equipment. The Fund generally discontinues the
recognition of revenue for direct financing leases for which payments are more
than 90 days past due.

         Leases not meeting any of the criteria to be classified as direct
financing leases are deemed to be operating leases. Under the accounting for
operating leases, the cost of the leased equipment, including acquisition fees
associated with lease placements, is recorded as an asset and depreciated on a
straight-line basis over the equipment's estimated useful life, generally up to
seven years. Rental income consists primarily of monthly periodic rentals due
under the terms of the leases. Generally, during the lease terms of existing
operating leases, the Fund will not recover all of the undepreciated cost and
related expenses of its rental equipment and, therefore, it is prepared to
remarket the equipment in future years. Fund policy is to review quarterly the
expected economic life of its rental equipment in order to determine the
recoverability of its undepreciated cost. In accordance with U.S. GAAP, the Fund
writes down its rental equipment to its estimated net realizable value when it
is probable that its carrying amount exceeds such value and the excess can be
reasonably estimated; gains are only recognized upon actual sale of the rental
equipment. There were no write-downs of equipment during the six months ended
June 30, 2004 or 2003.

         Other income consists of fees for delinquent payments which are
recognized when received.


                                       9
<PAGE>
                     LEASE EQUITY APPRECIATION FUND I, L.P.
                   NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
                                  JUNE 30, 2004

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (CONTINUED)

INCOME TAXES

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

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

         During the six month period ended June 30, 2004, the Fund paid $745,933
for interest. No cash payments were made during the six month period ended June
30, 2003 for interest.

         The Fund paid cash distributions of $80,960 in July 2004 which were
accrued for June 2004. The General Partner declared and paid a cash distribution
of $65,676 in January 2004 for the month of December 2003 to all admitted
partners as of December 31, 2003.

NET LOSS PER LIMITED PARTNERSHIP UNIT

         Net loss per limited partnership unit is computed by dividing net loss
allocated to limited partners by the weighted average number of limited
partnership units outstanding during the period. The weighted average number of
limited partnership units outstanding during the period is computed based on the
number of limited partnership units issued during the period weighted for the
days outstanding during the period. There were no potentially dilutive
securities outstanding in any periods of 2004 or 2003.

RECENT ACCOUNTING PRONOUNCEMENTS

         In January 2003, the FASB issued Interpretation No. 46, "Consolidation
of Variable Interest Entities, an Interpretation of ARB No. 51" ("FIN 46"). In
December 2003, the FASB issued a revised interpretation of FIN 46 ("FIN 46-R"),
which supersedes FIN 46 and clarifies and expands current accounting guidance
for variable interest entities ("VIE's"). FIN 46 clarifies when a company should
consolidate in its financial statements the assets, liabilities and activities
of a VIE. FIN 46 provides general guidance as to the definition of a VIE and
requires it to be consolidated if a party with an ownership, contractual or
other financial interest absorbs the majority of the VIE's expected losses, or
is entitled to receive a majority of the residual returns, or both. A variable
interest holder that is such a primary beneficiary of the VIE is required to
consolidate the VIE's assets, liabilities and non-controlling interests at fair
value at the date the interest holder first becomes the primary beneficiary of
the VIE. FIN 46 and FIN 46-R were effective immediately for all VIEs created
after January 31, 2003 and for VIEs created prior to February 1, 2003, no later
than the end of the first reporting period after March 15, 2004. The adoption of
FIN 46 on July 1, 2003 had no impact on the Fund's financial position or results
of operations.


                                       10
<PAGE>
                     LEASE EQUITY APPRECIATION FUND I, L.P.
                   NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
                                  JUNE 30, 2004

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (CONTINUED)

FAIR VALUE OF FINANCIAL INSTRUMENTS

         For cash, receivables and payables, the carrying amounts approximate
fair values because of the short maturity of these instruments. The carrying
value of debt approximates fair market value since interest rates approximate
current market rates.

COMPREHENSIVE INCOME (LOSS)

         Comprehensive income (loss) includes net income and all other changes
in the equity of a business during a period from non-owner sources. These
changes, other than net income, are referred to as "other comprehensive income."
The Fund has no other elements of comprehensive income (loss), other than net
income (loss) to report.

OTHER RECEIVABLES

         At June 30, 2004 and December 31, 2003, other receivables include cash
of $1,719,820 and $1,595,631, respectively, being held in reserve by the Fund's
lenders and $437,649 and $574,246, respectively, of customers' payments
deposited in a lockbox account that have not yet been transferred to the Fund.

OTHER ASSETS

         At June 30, 2004 and December 31, 2003 other assets include $162,158
and $154,315, respectively, of unamortized deferred financing costs which are
being amortized over the terms of the related debt.

NOTE 3 - ALLOCATION OF PARTNERSHIP INCOME, LOSS AND CASH DISTRIBUTIONS

         Cash distributions, if any, are made monthly as follows: 99% to the
limited partners and 1% to the General Partner until the limited partners have
received an amount equal to their unpaid cumulative return (8% of their adjusted
capital contribution) and thereafter, to investment and reinvestment in leases
or, if the General Partner elects not to invest or reinvest such distributable
cash, 99% to the limited partners and 1% to the General Partner. The General
Partner declared cash distributions of $432,864 and $126,754 during the six
month periods ended June 30, 2004 and 2003, respectively.

         Net income for any fiscal period during the reinvestment period (the
period commencing March 3, 2003 and ending five years after the last closing
date on which any limited partner is admitted) is allocated 99% to the limited
partners and 1% to the General Partner. Income during the liquidation period
will be allocated first to the partners in proportion to and to the extent of
the deficit balances, if any, in their respective capital accounts. Thereafter,
net income will be allocated 99% to the limited partners and 1% to the General
Partner.


                                       11
<PAGE>
                     LEASE EQUITY APPRECIATION FUND I, L.P.
                   NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
                                  JUNE 30, 2004

NOTE 3 - ALLOCATION OF PARTNERSHIP INCOME, LOSS AND CASH DISTRIBUTIONS -
         (CONTINUED)

         Net losses for any fiscal period are allocated 99% to the limited
partners and 1% to the General Partner until the limited partners have been
allocated losses equal to the excess, if any, of their aggregated capital
account balances over their aggregated adjusted capital contributions. Next,
losses are allocated to the partners in proportion to and to the extent of their
respective remaining positive capital account balances, if any. Thereafter,
losses are allocated 99% to the limited partners and 1% to the General Partner.

NOTE 4. - INVESTMENT IN LEASE RECEIVABLES

         The Fund's direct financing leases are for initial lease terms ranging
from approximately 12 to 84 months. Unguaranteed residuals for direct financing
leases represent the estimated amounts recoverable at lease termination from
lease extensions or disposition of the equipment. As of June 30, 2004,
approximately 16.2% of leased equipment was located in the state of California.
No other state accounted for more than 10% of the Fund's lease portfolio.

         The components of the net investment in direct financing leases are as
follows at:
<TABLE>
<CAPTION>
                                                                                        June 30,          December 31,
                                                                                          2004               2003
                                                                                     -------------       -------------
<S>                                                                                  <C>                 <C>
Total future minimum lease payments...........................................       $  41,900,509       $  27,983,069
Unearned rental income........................................................          (5,591,711)         (3,919,935)
Unguaranteed residuals........................................................             533,090             302,201
Unearned residual income......................................................            (158,282)           (119,711)
Security deposits.............................................................            (103,615)            (23,853)
                                                                                     -------------       -------------
                                                                                        36,579,991          24,221,771
Allowance for possible losses.................................................             (45,000)             (5,000)
                                                                                     -------------       -------------
                                                                                     $  36,534,991       $  24,216,771
                                                                                     =============       =============
</TABLE>
         A summary of the allowance for possible losses for the six month period
ended June 30, 2004 and the year ended December 31, 2003 is as follows:
<TABLE>
<CAPTION>
                                                                                       Six Month
                                                                                      Period Ended        Year Ended
                                                                                        June 30,          December 31,
                                                                                          2004               2003
                                                                                     -------------        -----------
<S>                                                                                  <C>                  <C>
Allowance for possible losses, beginning of the period..................             $       5,000        $         -
Provision for losses....................................................                    40,000              5,000
                                                                                     -------------        -----------
Allowance for possible losses, end of period............................             $      45,000        $     5,000
                                                                                     =============        ===========
</TABLE>


                                       12
<PAGE>
                     LEASE EQUITY APPRECIATION FUND I, L.P.
                   NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
                                  JUNE 30, 2004

NOTE 4 - INVESTMENT IN LEASE RECEIVABLES - (CONTINUED)

         The future minimum lease payments and related rental payments expected
to be received on non-cancelable direct financing and operating leases for each
of the five succeeding twelve-month periods ending June 30 and thereafter are as
follows:


                                       Direct Financing     Operating
                                       ----------------     ---------
   2005.............................     $ 13,203,576       $ 138,005
   2006.............................       11,498,671          40,145
   2007.............................        8,856,413               -
   2008.............................        5,457,661               -
   2009.............................        2,647,084               -
   Thereafter.......................          237,104               -
                                         ------------       ---------
                                         $ 41,900,509       $ 178,150
                                         ============       =========

                                       13
<PAGE>
                     LEASE EQUITY APPRECIATION FUND I, L.P.
                   NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
                                  JUNE 30, 2004

NOTE 5 - DEBT

         The table below summarizes the Fund's debt at June 30, 2004 and
December 31, 2003:
<TABLE>
<CAPTION>
                                                                                     June 30, 2004     December 31, 2003
                                                                                     -------------     -----------------
<S>                                                                                 <C>               <C>
OFC Capital, a division of ALFA Financial Corporation collateralized by specific
lease receivables equal to 93% of the aggregate payments due under the related
equipment lease or equipment finance transaction, discounted at an interest rate
of 6.9%, funded subject to a credit reserve of 3% of the loan amount, with a
credit reserve of 15% after security deposit. The loan is repayable as payments
are made under the leases or equipment financing transactions collateralizing
the loan, with a final maturity date of February 15,                                 $  14,964,831       $  13,056,516

National City Commercial Capital Corporation f/k/a Information Leasing
Corporation, collateralized by specified leases and their related receivables,
at a price generally equal to the sum of the receivables, discounted to present
value at 5.79%, less a credit reserve with a credit reserve of 15% after
security deposit (reducing to 8% as of July 30, 2004). The loan is repayable as
payments are made under the leases or equipment financing transactions
collateralizing the loan, with a final maturity date of November 1, 2009.                5,882,352           7,329,886

Sovereign Bank, revolving warehouse line of credit, with an aggregate borrowing
limit of $10 million collateralized by specific lease receivables and related
equipment. Interest on this facility is calculated at LIBOR plus 2.5% per annum
(3.7% at June 30, 2004). Interest and principal are due as payments are received
under the leases. The line expires in May 2005.                                          9,949,567                   -
                                                                                     -------------       -------------
Total outstanding debt                                                               $  30,796,840       $  20,386,402
                                                                                     =============       =============
</TABLE>
         The debt maturity for each of the five succeeding twelve month periods
ending June 30 and thereafter is as follows:

                  2005...................     $ 16,872,790
                  2006...................        5,874,777
                  2007...................        4,285,667
                  2008...................        2,754,012
                  2009...................          978,545
                  Thereafter.............           31,049
                                              ------------
                                              $ 30,796,840
                                              ============

                                       14
<PAGE>
                     LEASE EQUITY APPRECIATION FUND I, L.P.
                   NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
                                  JUNE 30, 2004

NOTE 6 - TRANSACTIONS WITH AFFILIATES

         The General Partner and its affiliate, Anthem Securities, Inc. ("Anthem
Securities"), a subsidiary of Resource America, Inc., receive an organization
and offering expense allowance of 3% of the offering proceeds and an
underwriting fee of 2% of the offering proceeds raised, respectively. This
expense allowance and underwriting fee are contingent upon the gross proceeds
raised and are limited in the aggregate to $2,500,000. These charges are
recorded by the Fund as offering costs incurred for the sale of limited
partnership units on the Statement of Partners' Capital.

         The General Partner receives an acquisition fee for assisting the Fund
in acquiring equipment and portfolios of equipment subject to existing equipment
leases. This fee is equal to 2% of the purchase price paid for the equipment and
portfolios of equipment subject to existing equipment leases, including in each
instance, debt it incurs or assumes in connection with the acquisition.

         The General Partner receives a subordinated annual asset management fee
of 3% of gross rental payments for operating leases and 2% of gross rental
payments for deferred financing leases, as defined in the Partnership Agreement.
During the Fund's five-year investment period, the asset management fee will be
subordinated to the payment of a cumulative annual distribution to the Fund's
limited partners equal to 8% of their capital contributions, as adjusted by
distributions deemed to be a return of capital.

         The General Partner receives a subordinated commission equal to
one-half of a competitive commission, to a maximum of 3% of the contract sales
price, for arranging the sale of the Fund's equipment after the expiration of a
lease. This commission will be subordinated to the payment of a cumulative 8%
annual return to the limited partners on their capital contributions, as
adjusted by distributions deemed to be a return of capital. No commission was
paid during the three and six months ended June 30, 2004 and 2003.

         The General Partner will receive a commission equal to the lesser of a
competitive rate or 2% of gross rental payments derived from any re-lease of
equipment if the re-lease is not with the original lessee or its affiliates. No
re-lease commissions were paid during the three and six months ended June 30,
2004 and 2003.

         The General Partner and its parent company are reimbursed by the Fund
for certain costs of services and materials used by or for the Fund except those
items covered by the above-mentioned fees.

         Anthem Securities receives sales commissions of 8% of the proceeds on
each unit sold, which are then paid to third party broker dealers.


                                       15
<PAGE>
                     LEASE EQUITY APPRECIATION FUND I, L.P.
                   NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
                                  JUNE 30, 2004

NOTE 6 - TRANSACTIONS WITH AFFILIATES - (CONTINUED)

         The following is a summary of fees and costs of services and materials
charged by the General Partner and/or its affiliates:
<TABLE>
<CAPTION>
                                                                  Three Months Ended               Six Months Ended
                                                                      June 30,                         June 30,
                                                               --------------------------      -------------------------
                                                                  2004            2003            2004            2003
                                                               ---------        ---------      ---------       ---------
<S>                                                            <C>              <C>            <C>             <C>
   Organization and offering expenses..................        $  54,319        $  72,122      $  85,845       $ 152,522
   Underwriting fees...................................           35,851           47,820         56,464         100,300
   Acquisition fees....................................          221,887           98,787        327,936         228,236
   Asset management fees...............................           64,952           23,251        145,292          26,067
   Reimbursable expenses...............................           61,632          158,985        278,147         179,898
   Sales commissions...................................          143,405          191,283        227,644         401,202
</TABLE>

         Due from related parties at June 30, 2004 and December 31, 2003 was
$416,231 and $128,333, respectively, which represents net monies due the Fund
from the General Partner and/or its affiliates for amounts collected and not yet
remitted to the Fund.

                                       16
<PAGE>
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS (UNAUDITED)

FORWARD-LOOKING STATEMENTS

WHEN USED IN THIS FORM 10-Q THE WORDS "BELIEVES" "ANTICIPATES" "EXPECTS" AND
SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS. SUCH
STATEMENTS ARE SUBJECT TO CERTAIN RISKS AND UNCERTAINTIES MORE PARTICULARLY
DESCRIBED IN ITEM 1 OF OUR ANNUAL REPORT ON FORM 10-K, UNDER THE CAPTION "RISK
FACTORS." THESE RISKS AND UNCERTAINTIES COULD CAUSE ACTUAL RESULTS TO DIFFER
MATERIALLY. READERS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON THESE
FORWARD-LOOKING STATEMENTS, WHICH SPEAK ONLY AS OF THE DATE HEREOF. WE UNDERTAKE
NO OBLIGATION TO PUBLICLY RELEASE THE RESULTS OF ANY REVISIONS TO
FORWARD-LOOKING STATEMENTS WHICH WE MAY MAKE TO REFLECT EVENTS OR CIRCUMSTANCES
AFTER THE DATE OF THIS FORM 10-Q OR TO REFLECT THE OCCURRENCE OF UNANTICIPATED
EVENTS.

OVERVIEW

         We were formed on January 31, 2002. In August, 2002 we began our
offering of 500,000 limited partner units. LEAF Financial Corporation became our
general partner of on June 30, 2004 upon the merger of LEAF Asset Management,
Inc. into it. The Fund is currently conducting an offering of a maximum of
500,000 limited partner units for aggregate maximum gross proceeds of
$50,000,000. Under the terms of our offering, subscriptions received were held
in escrow until we reached the required minimum subscriptions of 20,000 limited
partner units. On March 3, 2003, upon reaching the offering minimum, we broke
escrow and commenced operations. As of June 30, 2004, we had sold 124,048
limited partner units raising $10,792,385 net of offering costs. The offering
will end no later than August 15, 2004 and we do not expect to reach the maximum
offering gross proceeds of $50,000,000.

         We acquire portfolios of existing leases originated or acquired by an
affiliate of our general partner and other parties. The principal sources for
these portfolios will be small company lessors, international leasing
institutions, regional and national commercial banks and captive finance
companies of large manufacturers. Our general partner's board of directors has
an investment committee which sets, and may from time to time revise, standards
and procedures for the review and approval of equipment acquisitions and leases
of that equipment.

         Our leases consist of both direct financing and operating leases which
are recorded in accordance with accounting principles generally accepted in the
United States of America. Under the direct financing method of accounting for
leases, interest income (the excess of the aggregate future minimum lease
payments and estimated unguaranteed residuals upon expiration of the lease over
the related equipment cost) is recognized over the life of the lease using the
interest method. When a direct financing lease is 90 days or more delinquent,
the lease is classified as being on non-accrual and we generally do not
recognize interest income on that lease until the lease is less than 90 days
delinquent. Under the operating method of accounting for leases, the cost of the
leased equipment, including acquisition fees associated with lease placements,
is recorded as an asset and depreciated on a straight-line basis over its
estimated useful life. Rental income on operating leases consists primarily of
monthly periodic rentals due under the terms of the leases. Generally, during
the lease terms of existing operating leases, we will not recover all of the
undepreciated cost and related expenses of our rental equipment and, therefore,
we are prepared to remarket the equipment in future years.

         As of June 30, 2004, our portfolio contained 798 leases with 742
individual end users. As of June 30, 2004, we had invested $42,851,513 in
equipment under direct financings leases and $467,592 in equipment under
operating leases.

                                       17
<PAGE>

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

OUR LEASE PORTFOLIO

         The following schedules detail the type, aggregate purchase price and
percentage of the various types of equipment we leased under the operating and
direct financing methods as of June 30, 2004:

Direct Financing Leases:

                                             Purchase Price       Percentage of
Type of Equipment                             of Equipment       Total Equipment
-----------------                            --------------      ---------------

Furniture..................................  $     984,850             2.3%
Garment Care Equipment.....................      1,511,264             3.5%
General Office Equipment...................     18,266,580            42.6%
Industrial Equipment.......................      5,364,141            12.5%
Medical Equipment..........................     10,894,978            25.4%
Restaurant Equipment.......................        644,862             1.5%
Security Systems...........................        331,811             0.8%
Other......................................      4,853,027            11.4%
                                             -------------           -----
                                             $  42,851,513           100.0%
                                             =============           =====

Operating Leases:

                                             Purchase Price       Percentage of
Type of Equipment                             of Equipment       Total Equipment
-----------------                            --------------      ---------------

Furniture..................................         18,838             4.0%
General Office Equipment...................        136,163            29.1%
Industrial Equipment.......................         77,313            16.5%
Medical Equipment..........................        150,848            32.3%
Other......................................         84,430            18.1%
                                             -------------           -----
                                             $     467,592           100.0%
                                             =============           =====


                                       18
<PAGE>
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS (UNAUDITED) - (CONTINUED)

OUR LEASE PORTFOLIO (CONTINUED)

         The following schedules detail the type of lessee's business, aggregate
purchase price and percentage of equipment usage by industrial classification
for equipment we leased under the operating and direct financing methods as of
June 30, 2004:

Direct Financing Leases:
<TABLE>
<CAPTION>
                                                                           Purchase Price           Percentage of
Type of Business                                                            of Equipment           Total Equipment
----------------                                                           ---------------         ---------------
<S>                                                                        <C>                             <C>
Automotive Dealers/Gasoline Stations and Repair....................        $     3,359,151                 7.8%
Diversified Financial/Banking/Insurance/Engineering................             10,426,475                24.3%
Manufacturing/refining.............................................              3,501,016                 8.2%
Medical............................................................             14,483,626                33.9%
Real Estate........................................................              1,042,599                 2.4%
Education..........................................................              1,105,182                 2.6%
Wholesale Trade....................................................              1,077,447                 2.5%
Other..............................................................              7,856,017                18.3%
                                                                           ---------------               ------
                                                                           $    42,851,513               100.0%
                                                                           ===============               ======

Operating Leases:
                                                                            Purchase Price          Percentage of
Type of Business                                                             of Equipment          Total Equipment
----------------                                                           ---------------         ---------------
Restaurants..........................................................      $        62,168                13.3%
Diversified Financial/Banking/Insurance/Engineering..................               31,605                 6.8%
Construction.........................................................               68,721                14.7%
Medical..............................................................              150,848                32.3%
Publishing/printing..................................................               48,032                10.3%
Wholesale Trade......................................................              106,218                22.6%
                                                                           ---------------               ------
                                                                           $       467,592               100.0%
                                                                           ===============               ======
</TABLE>

                                       19
<PAGE>
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS (UNAUDITED) - (CONTINUED)

RESULTS OF OPERATIONS

         We had interest and rental income of $655,559 and $1,267,608 for the
three and six month periods ended June 30, 2004, an increase of 191% and 386%
over the comparable periods in 2003. From our inception in March 20003 to June
30, 2004 our portfolio of leases has grown to 798 totaling a net investment of
$36,746,158 with 742 different customers. Interest expense of $392,396 and
$766,612 for the three and six month periods ended June 30, 2004 includes
interest incurred on warehouse lines, loans payable and the amortization of
deferred financing costs. As our lease portfolio grows and we incur additional
debt, interest expense will increase in future periods. Total operating expenses
were $275,331 and $679,695 for the three and six month periods ended June 30,
2004. General and administrative expenses, including reimbursed expenses-related
party, were $161,580 and $432,091 for the three and six month periods ended June
30, 2004. Of this amount, $61,632 and $278,147 was paid to our general partner
as a direct reimbursement of expenses incurred on our behalf. The remaining
general and administrative expenses of $99,948 and $153,944 for the three and
six month periods ended June 30, 2004 were paid directly to vendors. In
addition, we paid management fees of $64,952 and $145,292 to our general partner
for the three and six month periods ended June 30, 2004. The management fees are
calculated as a percentage of gross rental payments on both direct financing and
operating leases. Depreciation expense from operating leases was $48,799 and
$102,312 during the three and six month periods ended June 30, 2004. Included in
Other Income, we recognized a net gain on sale of equipment and lease
dispositions of $430 and $54,319 for the three and six month periods ended June
30, 2004.

         Our net income (loss) was $8,604 and $(83,984) for the three and six
month period ended June 30, 2004. The gain (loss) per limited partner unit,
after the gain (loss) allocated to our general partner, was $0.07 and $(0.77),
based on a weighted average number of limited partner units outstanding of
115,967 and 107,433 for the three and six month periods ended June 30, 2004.
This was our first quarterly profit reported. As would be expected in the
initial periods of operation, overhead expenses were incurred prior to the
growth of revenues. We attained profitability through the growth in our
portfolio of leases facilitated by new credit facilities and through the
reduction of overhead expenses. To remain profitable we need to increase our
revenues by acquiring additional lease portfolios. We plan to obtain additional
capital to acquire these portfolios primarily through new credit facilities,
which may include warehouse lines, commercial paper and securitizations. The
offering period for the sale of partnership units ends August 15, 2004. On July
30, 2004 we borrowed approximately $8.1 million from National City Commercial
Capital Corporation, one of our current lenders, under terms similar to our
existing loans.

         We declared cash distributions of $232,273, of which $151,313 was paid
during the three month period ended June 30, 2004. The remaining distributions
of $80,960 were accrued at June 30, 2004 and were paid in July 2004.

Three month period ended June 30, 2004 compared to the three month period ended
June 30, 2003.

         We had interest and rental income of $655,559 for the three month
period ended June 30, 2004 as compared to $225,238 for the same period in 2003.
The increase of $430,321 is primarily due to the fact that we had just broken
escrow and commenced operations on March 3, 2003 and had invested $8,304,683 in
direct financing leases and $374,069 in equipment under operating leases at the
end of the earlier period. At June 30, 2004, we had invested $36,534,991 in
direct financing leases and $211,167 in equipment in operating leases.


                                       20
<PAGE>
         Other income includes gains and losses on lease terminations, which
vary from transaction to transaction and there may be significant variations in
our gains or losses from period to period. Other income for the three month
period ended June 30, 2004 was $20,772 as compared to $2,522 for the three month
period ended June 30, 2003.

         Our interest expense for the three month period ended June 30, 2004
increased by $340,147 (651%) to $392,396 due to an increase in debt to
$30,796,840 from $4,767,118 as of June 30, 2003.

         Operating expenses declined by $40,363 (12.7%) to $275,331 for the
three month period ended June 30, 2004, as compared to $315,694 for the same
period in 2003. Reimbursed expenses to our general partner declined by $97,353
because many of the expenses associated with developing our operations are now
complete, however, we anticipate that these expenses will increase in the future
as our portfolio grows. The decline in reimbursed expenses was offset by an
increase of $41,701 in management fee-related party. These fees which are based
on lease payment collections will continue to increase as the lease portfolio
grows.

Six month period ended June 30, 2004 compared to the six month period ended June
30, 2003.

         We had interest and rental income of $1,267,608 for the six month
period ended June 30, 2004 as compared to $260,621 for the same period in 2003.
The increase of $1,006,987 is primarily due to the fact that we had just broken
escrow and commenced operations on March 3, 2003 and had invested $8,304,683 in
leases at the end of the earlier period. At June 30, 2004, we had invested
$36,638,606 in direct financing leases and had invested $211,167 in equipment
under operating leases.

         Other income for the six month periods ended June 30, 2004 was $94,715
as compared to $3,072 the six month period ended June 30, 2003.

         Our interest expense for the six month period ended June 30, 2004
increased by $701,959 to $766,612 due to an increase in debt to $30,796,840 from
$4,767,118 as of June 30, 2003.

         We had total operating expenses of $679,695 for the six month period
ended June 30, 2004 as compared to $341,314 for the same period in 2003. The
increase of $338,381 was primarily due to increases in reimbursed expenses of
$98,249, general and administrative of $80,100, management fee of $119,225 and
depreciation expense of $40,807. These increases are primarily due to the fact
that we commenced operations on March 3, 2003 and therefore had fewer operating
days in the six month period ended June 30, 2003 as compared to the six month
period ended June 30, 2004.

LIQUIDITY AND CAPITAL RESOURCES

         Our major sources of liquidity are the sale of limited partner units
and borrowings under credit facilities. The offering of limited partnership
units ends on August 15, 2004.

         Our primary cash requirements, in addition to normal operating
expenses, are for debt service, investment in leases and distributions to
partners. We plan to meet our cash requirements through new credit facilities,
through the sale of additional limited partner units and through the cash
generated from leases we expect to acquire. We are currently in discussions with
several sources of the financing that will be required to purchase additional
lease portfolios.

                                       21
<PAGE>
         The following table sets forth our sources and uses of cash for the
periods indicated:
<TABLE>
<CAPTION>
                                                                        Six Months Ended
                                                                             June 30,
                                                                  -------------------------------
                                                                      2004               2003
                                                                  -------------     -------------
<S>                                                               <C>               <C>
Net cash used by operating activities.....................        $    (300,104)    $    (155,807)
Net cash used in investing activities.....................          (12,303,901)       (8,621,350)
Net cash provided by financing activities.................           12,880,507         9,070,403
                                                                  -------------     -------------
Increase in cash..........................................        $     276,502     $     294,246
                                                                  =============     =============
</TABLE>

         We broke escrow and commenced operations on March 3, 2003. Since we
were in full operation for six months in 2004 as compared to four months in
2003, we were was able to invest in more leases during the six month period
ended June 30, 2004 ($16,417,170) as compared to the same period in 2003
($8,977,745). We were was also able to obtain more financing during the six
month period ended June 30, 2004 ($13,628,583) as compared to the same period in
2003 ($6,267,118), because we were in operation for a longer period resulting in
a larger portfolio of leases to use as collateral for financing.

         We sold more limited partnership units during the six month period
ended June 30, 2003 as compared to the six month period ended June 30, 2004
($2,583,508 in 2004 and $5,028,663 in 2003). This decrease in units sold was the
result of the hiatus in marketing and selling partnership units from October 31,
2003 to January 28, 2004 while our offering prospectus was under regulatory
review. It took additional time to reestablish ourselves with the marketplace
once we were able to restart our offering.

         Our liquidity is affected by our ability to sell additional limited
partnership units and to leverage our portfolio through expansion of credit
facilities. In addition, changes in interest rates will affect the market value
of our portfolio and our ability to obtain financing. In general, the market
value of an equipment lease will change in inverse relation to an interest rate
change where the lease has a fixed rate of return. Accordingly, in a period of
rising interest rates, the market value of our equipment leases will decrease. A
decrease in the market value of our portfolio will adversely affect our ability
to obtain financing against our portfolio or to liquidate it. In addition, the
terms of our credit facilities have financial covenants related to our net worth
and leverage.

         Our liquidity could also be affected by higher than expected lease
defaults. Higher than expected lease defaults will result in a loss of
anticipated revenues. These losses may adversely affect our ability to make
distributions to partners and, if the levels of defaults are significantly
large, it may result in our inability to fully recover our investment in the
underlying equipment. In evaluating our allowance for possible losses, we
consider our contractual delinquencies, economic conditions and trends, industry
statistics, lease portfolio characteristics and our general partner's
management's prior experience with similar lease assets. At June 30, 2004, our
credit evaluation indicated the need for an allowance for possible losses of
$45,000. As our lease portfolio increases we anticipate the allowance for
possible losses will increase.

         Net cash used in operations of $300,104 is the result of our net loss
of $83,984 offset by non-cash expenses (depreciation, amortization and loss
provision) of $155,155 increased by the gain on sale of $54,319 and the net of
our other receivables and accounts payable and amounts due from related parties
of $345,567.

         Net cash used in investing activities of $12,303,901 for the six month
period ended June 30, 2004 is due primarily to the investment in direct
financing leases of $16,417,170 offset by the proceeds from direct financing
leases of $3,181,334 and $852,173 from the sale of equipment and lease
dispositions.

                                       22
<PAGE>

         Net cash provided by financing activities for the six month period
ended June 30, 2004 was $12,880,507. Cash provided by financing of $13,628,583
was primarily derived from the debt used to acquire lease portfolios and
$2,831,287 from the sale of partnership units. On January 28, 2004, we borrowed
an additional $3,678,926 from our line of credit with OFC Capital, which was
collateralized by specific lease receivables. Gross proceeds of $3,678,926 were
reduced for cash reserves of $118,675 and transaction costs of $24,636,
resulting in net proceeds of $3,535,615. In May 2004, we established and
borrowed $10,000,000 under a new revolving warehouse line of credit with
Sovereign Bank. This line of credit, which is secured by lease receivables,
bears interest at a floating rate of LIBOR plus 2.5% interest per annum. To
mitigate our exposure to changes in interest rates, it is our intent to use this
line of credit to aggregate leases that will be later financing on a permanent
basis with a commercial paper conduit, term securitization, our term loan
similar to our loans with National City Commercial Capital Corporation or OFC
Capital. On July 30, 2004 we borrowed $8.1 million from National City Commercial
Corporation. We are in negotiations with several financing sources for
additional financing facilities.

PARTNERSHIP DISTRIBUTIONS

         During the six month period ended June 30, 2004 we declared
distributions of $432,864, of which $351,904 was distributed and $80,960 was
accrued as of June 30, 2004. The accrued distribution of $80,960 was paid in
July 2004 to all admitted partners as of June 30, 2004. Declared distributions
to limited partners were 8% of invested capital.

ITEM 3. - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         All of our assets and liabilities are denominated in U.S. dollars, and
as a result, we do not have exposure to currency exchange risks.

           As of June 30, 2004, the amount outstanding under the revolving
warehouse line of credit was $9,949,567. The interest rate of this facility is
calculated at LIBOR plus 2.5% interest per annum. The weighted average interest
rate for this facility was 3.6% at June 30, 2004. Holding all other variables
constant, if interest rates hypothetically increased or decreased by 10%, our
net annual income would change by approximately $36,000.

         We do not engage in any interest rate, foreign currency exchange rate
or commodity price-hedging transactions, and as a result, we do not have
exposure to derivatives risk.

ITEM 4. - CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

         The chairman and chief financial officer of our general partner, our
principal executive officer and financial officer, respectively, have evaluated
our disclosure controls and procedures, (as defined in Rules 13a-14 (c) and
15d-14(c)) under the Securities Exchange Act of 1934 within 90 days prior to the
filing of this report. Based upon this evaluation, these officers believe that
our disclosure controls and procedures are effective.


                                       23
<PAGE>
                           PART II - OTHER INFORMATION

ITEM 1. - LEGAL PROCEEDINGS

         We are not subject to any pending legal proceedings.

ITEM 2. - CHANGES IN SECURITIES AND USE OF PROCEEDS

         Our limited partner units are not publicly traded. As of June 30, 2004,
we had 307 limited partners.

         We are currently offering units of our limited partnership interest
pursuant to a registration statement (File No. 333-84730) that was made
effective by the Securities and Exchange Commission on August 15, 2002, when the
offering commenced. The dealer manager for the offering is Anthem Securities,
Inc. We registered the sale of 500,000 units of limited partnership interest at
an aggregate offering price of $50,000,000. As of July 27, 2004, we had sold
144,860 units for an aggregate offering price of $14,409,099.

         The following table shows the use of proceeds from the offering since
the effective date of the registration statement through June 30, 2004.
<TABLE>
<CAPTION>
<S>                                                                                    <C>
Offering proceeds............................................................          $ 12,339,586
Expenses:
     Sales commissions (1)(2)................................................          $   (941,969)
     Underwriting fees (1)(2)................................................              (235,044)
     Organization and offering expenses (3)..................................              (370,188)
                                                                                       ------------
     Public offering expenses................................................            (1,547,201)

Net offering proceeds........................................................            10,792,385
Reserves                                                                                   (215,848)
                                                                                       ------------
Total proceeds available for investment......................................          $ 10,576,537

Use of proceeds for investment (estimated):
     Used in operations (4)..................................................               900,000
     Acquisition of lease portfolios (5).....................................             8,400,000
     Working capital.........................................................             1,276,537
</TABLE>
-------------
(1) We did not pay sales commissions or underwriting fees with respect to the
    6,474.7 units sold to our general partner, the selling dealers and their
    affiliates.
(2) Paid to an affiliate of the general partner.
(3) Paid to the general partner.
(4) The general partner was reimbursed $872,563 for operating expenses and paid
    asset management fees of $218,387.
(5) Included are asset acquisition fees of $844,173 that were paid to our
    general partner.


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<PAGE>

ITEM 3. - DEFAULTS UPON SENIOR SECURITIES

         Not applicable

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

         Not applicable

ITEM 5. - OTHER INFORMATION

         None

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

         (a) The following documents are filed as part of this Quarterly Report
on Form 10-Q:

                  1.  FINANCIAL STATEMENTS

                      The financial statements required by this Item are set
                      forth in Item 1

                  2.  FINANCIAL STATEMENT SCHEDULES

                      No schedules are required to be presented.

                  3.  EXHIBITS

                  Exhibit No.      Description
                  -----------      -----------
                     3.1           Amended and Restated Agreement of Limited
                                   Partnership(1)

                     3.2           Certificate of Limited Partnership(2)

                     4             Forms of letters sent to limited partners
                                   confirming their investment(2)

                     10.1          Revolving Credit Agreement and Assignment
                                   dated as of May 27, 2004 among Lease Equity
                                   Appreciation Fund I, L.P., LEAF Financial
                                   Corporation and Sovereign Bank.

                     31.1          Rule 13a-14(a)/15d-14(a) Certifications

                     31.2          Rule 13a-14(a)/15d-14(a) Certifications

                     32.1          Section 1350 Certifications

                     32.2          Section 1350 Certifications

                  -----------

                  (1) Filed previously as Appendix A to our Post-Effective
                      Amendment No. 3 to our Registration Statement on Form S-1,
                      filed on January 24, 2004.

                  (2) Filed previously as an Exhibit to Amendment No. 1 to our
                      Registration Statement on Form S-1 filed on June 7, 2002.


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<PAGE>

                     LEASE EQUITY APPRECIATION FUND I, L.P.


                                   SIGNATURES

         Pursuant to 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.


/s/ Crit DeMent           Chief Executive Officer and            August 13, 2004
-----------------------   Director of the General Partner.
CRIT DEMENT               (Principal Executive Officer)



/s/ Robert K. Moskovitz   Senior Vice President,                 August 13, 2004
-----------------------   and Chief Financial Officer
ROBERT K. MOSKOVITZ       of the General Partner.
                          (Principal Financial Officer)




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