**UNITED      STATES**

**SECURITIES      AND EXCHANGE COMMISSION**

**WASHINGTON,      D.C. 20549**

**FORM      10-Q**

**xQUARTERLY      REPORT      PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF      1934**

**TRANSITION      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF      1934**

**LEASE      EQUITY APPRECIATION FUND I, L.P. **

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

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**LEASE      EQUITY APPRECIATION FUND I, L.P.**

**INDEX      TO QUARTERLY REPORT**

**ON      FORM 10-Q**

|                       |                                                                                                                                                        | **PAGE**               |
|----------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------|
|                       |                                                                                                                                                        |                   |
| **PART                I**  | **FINANCIAL                INFORMATION**                                                                                                                    |                   |
| Item                1.     | Financial                Statements                                                                                                                         |                   |
|                       | Consolidated                Balance Sheets - June 30, 2006 (unaudited) and December 31,                2005                                            | 3                      |
|                       | Consolidated                Statements of Operations Three                and Six Months Ended June 30, 2006 and 2005                (unaudited)            | 4                      |
|                       | Consolidated                Statement of Partners’ Capital and Comprehensive Income For                the Six Months Ended June 30, 2006 (unaudited) | 5                      |
|                       | Consolidated                Statements of Cash Flows For                the Six Months Ended June 30, 2006 and 2005                (unaudited)              | 6                      |
|                       | Notes                to Consolidated Financial Statements - June 30, 2006                (unaudited)                                                   |                   |
| ITEM                2.     | Management’s                Discussion and Analysis of Financial Condition and                Results of Operations                                   | 16                - 21 |
| ITEM                3.     | Quantitative                and Qualitative Disclosures about Market                Risk                                                                    | 22                     |
| ITEM                4.     | Controls                and Procedures                                                                                                                      | 22                     |
| **PART                II** | **OTHER                INFORMATION**                                                                                                                        |                   |
| ITEM                6.     | Exhibits                                                                                                                                                    | 22                     |
| **SIGNATURES**             | 23                                                                                                                                                          |

----

**PART      I.**
**FINANCIAL      INFORMATION**

**Item      1.**
**Financial      Statements**

**LEASE      EQUITY APPRECIATION FUND I, L.P.**

**CONSOLIDATED      BALANCE SHEETS**

|                                                                                                                                     |   | **June                30,** |       | **December                31,** |   |
|------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------|------------|---------------------------------|--------|
|                                                                                                                                     |   | **2006**                    |       | **2005**                        |   |
|                                                                                                                                     |   | **(unaudited)**             |       |                            |   |
| **ASSETS**                                                                                                                               |   |                        |       |                            |   |
| Cash                                                                                                                                     |   | $                           | 3,784,885  |                            | $      | 3,205,731 |   |
| Restricted                cash                                                                                                           |   |                        | 1,925,934  |                            |   | 1,887,933 |   |
| Accounts                receivable                                                                                                       |   |                        | 90,635     |                            |   | 89,702 |   |
| Due                from lockbox                                                                                                          |   |                        | 546,472    |                            |   | 1,343,985 |   |
| Investment                in direct financing leases and notes, net                                                                      |   |                        | 86,270,325 |                            |   | 80,782,648 |   |
| Investment                in operating leases, net of accumulated depreciation of $1,321,061                and $1,069,031, respectively |   |                        | 1,372,550  |                            |   | 1,743,257 |   |
| Fair                value of interest rate swap                                                                                          |   |                        | 1,140,711  |                            |   | 658,610 |   |
| Other                assets                                                                                                              |   |                        | 969,627    |                            |   | 1,080,860 |   |
|                                                                                                                                     |   | $                           | 96,101,139 |                            | $      | 90,792,726 |   |
| **LIABILITIES                AND PARTNERS’ CAPITAL**                                                                               |   |                        |       |                            |   |   |   |
| **Liabilities:**                                                                                                                         |   |                        |       |                            |   |   |   |
| Debt                                                                                                                                |   | $                           | 82,038,882 |                            | $      | 77,326,886 |   |
| Accounts                payable and accrued expenses                                                                                |   |                        | 314,428    |                            |   | 418,278 |   |
| Due                to related parties, net                                                                                          |   |                        | 1,621,148  |                            |   | 818,235 |   |
| Security                deposits                                                                                               |   |                        | 880,440    |                            |   | 801,235 |   |
| Total                liabilities                                                                                                    |   |                        | 84,854,898 |                            |   | 79,364,634 |   |
| **Partners’                Capital**                                                                                          |   |                        | 11,246,241 |                            |   | 11,428,092 |   |
|                                                                                                                                     |   | $                           | 96,101,139 |                            | $      | 90,792,726 |   |
|                                                                                                                                     |   |                        |       |                            |   |   |   |

----

**LEASE      EQUITY APPRECIATION FUND I, L.P.**

**CONSOLIDATED      STATEMENTS OF      OPERATIONS**

**(unaudited)**

|                                                                                                         |   | **Three                Months Ended****June                30,** |      | **Six                Months Ended****June                30,** |   |
|--------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------------------------|-----------|----------------------------------------------------------------|--------|
|                                                                                                         |   | **2006**                                                         |      | **2005**                                                       |   | **2006** |   | **2005** |   |
| **Income:**                                                                                                  |   |                                                             |      |                                                           |   |   |   |   |   |
| Interest                on equipment financings                                                              |   | $                                                                | 1,568,770 |                                                           | $      | 1,788,981 |   | $ | 3,088,975 |   | $ | 2,982,065 |   |
| Rental                income                                                                                 |   |                                                             | 199,384   |                                                           |   | 265,557 |   |   | 430,801 |   |   | 510,197 |   |
| Gain                (loss) on sale of equipment and lease dispositions,                net                   |   |                                                             | 61,941    |                                                           |   | (2,524 | ) |   | 166,216 |   |   | (5,405 | ) |
| Other                                                                                                        |   |                                                             | 139,267   |                                                           |   | 86,891 |   |   | 275,498 |   |   | 162,146 |   |
|                                                                                                         |   |                                                             | 1,969,362 |                                                           |   | 2,138,905 |   |   | 3,961,490 |   |   | 3,649,003 |   |
|                                                                                                         |   |                                                             |      |                                                           |   |   |   |   |   |   |   |   |   |
| **Expenses:**                                                                                                |   |                                                             |      |                                                           |   |   |   |   |   |   |   |   |   |
| Interest                expense                                                                              |   |                                                             | 1,086,149 |                                                           |   | 1,240,338 |   |   | 2,158,429 |   |   | 2,073,131 |   |
| Depreciation                on operating leases                                                              |   |                                                             | 163,729   |                                                           |   | 216,166 |   |   | 355,773 |   |   | 418,688 |   |
| Provision                for credit losses                                                                   |   |                                                             | 193,786   |                                                           |   | 312,785 |   |   | 339,260 |   |   | 553,235 |   |
| Management                fee to related party                                                               |   |                                                             | 300,352   |                                                           |   | 224,101 |   |   | 534,668 |   |   | 378,339 |   |
| Administrative                expense reimbursed to related party                                            |   |                                                             | 165,095   |                                                           |   | 207,528 |   |   | 268,953 |   |   | 347,787 |   |
| General                and administrative expenses                                                           |   |                                                             | 144,547   |                                                           |   | 152,121 |   |   | 276,330 |   |   | 257,360 |   |
|                                                                                                         |   |                                                             | 2,053,658 |                                                           |   | 2,353,039 |   |   | 3,933,413 |   |   | 4,028,540 |   |
| Net                income (loss)                                                                        |   | $                                                                | (84,296   | )                                                              | $      | (214,133 | ) | $ | 28,077 |   | $ | (379,537 | ) |
|                                                                                                         |   |                                                             |      |                                                           |   |   |   |   |   |   |   |   |   |
| Weighted                average number of limited partner units outstanding                during the period |   |                                                             | 171,746   |                                                           |   | 171,746 |   |   | 171,746 |   |   | 171,746 |   |
| Net                income (loss) attributed to limited partners per unit                                     |   | $                                                                | (0.49     | )                                                              | $      | (1.23 | ) | $ | 0.16 |   | $ | (2.19 | ) |

----

**LEASE      EQUITY APPRECIATION FUND I, L.P.**

**CONSOLIDATED      STATEMENTS OF PARTNERS’ CAPITAL**

**AND      COMPREHENSIVE INCOME **

**FOR      THE SIX MONTHS ENDED JUNE 30, 2006**

**(unaudited)**

|                                                         |   | **General                  Partner** |    | **Limited                  Partners** |   | **Accumulated                  Other Comprehensive** |   |   **Partners’                  Capital** |       | **Comprehensive                  Income** |   |
|--------------------------------------------------------------|--------|--------------------------------------|---------|---------------------------------------|--------|------------------------------------------------------|--------|----------------------------------------------------------|------------|-------------------------------------------|--------|
|                                                         |   | **Amount**                           |    | **Units**                             |   | **Amount**                                           |   | **Income**                                               |       | **Total**                                 |   | **Total** |   |
| Balance,                  January 1, 2006               |   | $                                    | (40,739 | )                                     |   | 171,746                                              |   | $                                                        | 10,810,221 |                                      | $      | 658,610 |   | $ | 11,428,092 |   |   |   |   |
| Cash                  distributions paid                     |   |                                 | (6,920  | )                                     |   | -                                                    |   |                                                     | (685,109   | )                                         |   | − |   |   | (692,029 | ) |   |   |   |
| Net                  income                                  |   |                                 | 281     |                                  |   | -                                                    |   |                                                     | 27,796     |                                      |   | − |   |   | 28,077 |   | $ | 28,077 |   |
| Unrealized                  gain on hedging derivative  |   |                                 | − |                                  |   | −                                              |   |                                                     | −    |                                      |   | 482,101 |   |   | 482,101 |   |   | 482,101 |   |
| Balance,                  June 30, 2006                 |   | $                                    | (47,378 | )                                     |   | 171,746                                              |   | $                                                        | 10,152,908 |                                      | $      | 1,140,711 |   | $ | 11,246,241 |   | $ | 510,178 |   |

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**LEASE      EQUITY APPRECIATION FUND I, L.P.**

**CONSOLIDATED      STATEMENTS OF CASH FLOWS**

**(**
**unaudited**
**)**

|                                                                                                                                                  |   | **Six                Months Ended****June                30,** |        |
|-------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------|-------------|
|                                                                                                                                                  |   | **2006**                                                       |        | **2005** |   |
| **Cash                flows from operating activities:**                                                                                              |   |                                                           |        |   |   |
| Net                income (loss)                                                                                                                 |   | $                                                              | 28,077      |   | $ | (379,537 | ) |
| Adjustments                to reconcile net income (loss) to net cash provided by  (used                in) operating                activities: |   |                                                           |        |   |   |   |   |
| (Gain)                loss on sale of equipment and lease dispositions net                                                                       |   |                                                           | (166,216    | ) |   | 5,405 |   |
| Depreciation                                                                                                                                     |   |                                                           | 355,773     |   |   | 418,688 |   |
| Amortization                of deferred financing costs                                                                                          |   |                                                           | 63,865      |   |   | 82,624 |   |
| Provision                for credit losses, net of recoveries                                                                                    |   |                                                           | 339,260     |   |   | 553,235 |   |
| Changes                in operating assets and liabilities:                                                                                           |   |                                                           |        |   |   |   |   |
| Accounts                receivable                                                                                                                    |   |                                                           | (933        | ) |   | (85,030 | ) |
| Due                from lockbox                                                                                                                       |   |                                                           | 797,513     |   |   | 6,563 |   |
| Other                assets                                                                                                                           |   |                                                           | 48,944      |   |   | (104,443 | ) |
| Accounts                payable and accrued expenses                                                                                                  |   |                                                           | (103,850    | ) |   | (288,402 | ) |
| Due                to related parties, net                                                                                                            |   |                                                           | 802,913     |   |   | (556,297 | ) |
| Net                cash provided by (used in) operating activities                                                                                    |   |                                                           | 2,165,346   |   |   | (347,194 | ) |
|                                                                                                                                                  |   |                                                           |        |   |   |   |   |
| **Cash                flows from investing activities:**                                                                                              |   |                                                           |        |   |   |   |   |
| Investments                in direct financing leases and notes                                                                                       |   |                                                           | (23,965,745 | ) |   | (51,406,742 | ) |
| Acquisitions                of equipment under operating leases                                                                                       |   |                                                           | (19,384     | ) |   | (1,080,018 | ) |
| Proceeds                from direct financing leases and notes, net of earned income                                                             |   |                                                           | 23,711,927  |   |   | 13,480,286 |   |
| Increase                in security deposits                                                                                                          |   |                                                           | 79,205      |   |   | 435,947 |   |
| Net                cash used in investing activities                                                                                                  |   |                                                           | (193,997    | ) |   | (38,570,527 | ) |
|                                                                                                                                                  |   |                                                           |        |   |   |   |   |
| **Cash                flows from financing activities:**                                                                                              |   |                                                           |        |   |   |   |   |
| (Increase)                decrease in restricted cash                                                                                                 |   |                                                           | (38,001     | ) |   | 5,226,025 |   |
| Increase                in deferred financing costs                                                                                                   |   |                                                           | (1,576      | ) |   | (9,867 | ) |
| Proceeds                from debt                                                                                                                     |   |                                                           | 17,030,000  |   |   | 71,506,185 |   |
| Repayment                of debt                                                                                                                      |   |                                                           | (17,690,589 | ) |   | (35,322,372 | ) |
| Partners’** **distributions                paid                                                                                            |   |                                                           | (692,029    | ) |   | (692,031 | ) |
| Net                cash (used in) provided by financing activities                                                                                    |   |                                                           | (1,392,195  | ) |   | 40,707,940 |   |
|                                                                                                                                                  |   |                                                           |        |   |   |   |   |
| Increase                in cash                                                                                                                  |   |                                                           | 579,154     |   |   | 1,790,219 |   |
| Cash,                beginning of period                                                                                                         |   |                                                           | 3,205,731   |   |   | 2,310,880 |   |
| Cash,                end of period                                                                                                               |   | $                                                              | 3,784,885   |   | $ | 4,101,099 |   |

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**LEASE      EQUITY APPRECIATION FUND I, L.P.**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**June      30, 2006**

**NOTE      1 **
**-**
**      ORGANIZATION AND NATURE OF BUSINESS**

**NOTE      2 **
**-**
**      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**

**Basis      of Presentation**

**Reclassifications**

**Classification      **

**Use      of Estimates**

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**LEASE      EQUITY APPRECIATION FUND I, L.P.**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS − (Continued)**

**June      30, 2006**

**(unaudited)**

**NOTE      2 **
**-**
**      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES **
**-**
**      (Continued)**

**Use      of Estimates − (Continued)**

**Concentration      of Credit Risk**

**Revenue      Recognition**

*Direct      Financing Leases. *

----

**LEASE      EQUITY APPRECIATION FUND I, L.P.**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS − (Continued)**

**June      30, 2006**

**(unaudited)**

**NOTE      2 **
**-**
**      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES **
**-**
**      (Continued)**

**Revenue      Recognition − (Continued)**

*Operating      Leases. *

*Notes      Receivable.*

**Income      Taxes**

**Supplemental      Disclosure of Cash Flow Information**

|                                               |   | **2006** |      | **2005** |   |
|----------------------------------------------------|--------|----------|-----------|----------|--------|
| **Cash                paid for:**                  |   |     |      |     |   |
| Interest                                           |   | $        | 2,099,193 |     | $      | 723,192 |   |
| **Non-cash                activities:**            |   |     |      |     |   |   |   |
| Purchase                of direct financing leases |   | $        | 5,372,585 |     | $      | − |   |
| Note                payable to General Partner     |   | $        | 5,372,585 |     | $      | − |   |

**Transfers      of Financial Assets**

*Accounting      for Transfers and Servicing of Financial Assets and Extinguishments of      Liabilities,*

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**LEASE      EQUITY APPRECIATION FUND I, L.P.**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS − (Continued)**

**June      30, 2006**

**(unaudited)**

**NOTE      2 **
**-**
**      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES **
**-**
**      (Continued)**

**Fair      Value of Financial Instruments**

**NOTE      3 − RESTRICTED CASH**

**NOTE      4 − DUE FROM LOCKBOX**

**NOTE      5 **
**-**
**INVESTMENT      IN LEASES AND NOTES**

|                                         |   | **June                30,** |       | **December                31,** |   |
|----------------------------------------------|--------|-----------------------------|------------|---------------------------------|--------|
|                                         |   | **2006**                    |       | **2005**                        |   |
| Direct                financing leases       |   | $                           | 77,784,392 |                            | $      | 75,565,985 |   |
| Notes                receivable              |   |                        | 8,785,933  |                            |   | 5,621,663 |   |
|                                         |   |                        | 86,570,325 |                            |   | 81,187,648 |   |
| Allowance                for possible losses |   |                        | (300,000   | )                               |   | (405,000 | ) |
|                                         |   | $                           | 86,270,325 |                            | $      | 80,782,648 |   |

|                                                      |   | **June                30,** |        | **December                31,** |   |
|-----------------------------------------------------------|--------|-----------------------------|-------------|---------------------------------|--------|
|                                                      |   | **2006**                    |        | **2005**                        |   |
| Total                future minimum lease payments        |   | $                           | 87,400,535  |                            | $      | 84,051,541 |   |
| Unearned                income                            |   |                        | (10,383,194 | )                               |   | (9,167,115 | ) |
| Residuals,                net of unearned residual income |   |                        | 767,051     |                            |   | 681,559 |   |
|                                                      |   | $                           | 77,784,392  |                            | $      | 75,565,985 |   |

----

**LEASE      EQUITY APPRECIATION FUND I, L.P.**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS − (Continued)**

**June      30, 2006**

**(unaudited)**

**NOTE      5 **
**-**
**INVESTMENT      IN LEASES AND NOTES − (Continued)**

|                                                                  |   | **Six                Months Ended****June                30,** |     |
|-----------------------------------------------------------------------|--------|----------------------------------------------------------------|----------|
|                                                                  |   | **2006**                                                       |     | **2005** |   |
| Allowance                for possible losses, beginning of the period |   | $                                                              | 405,000  |   | $ | 120,000 |   |
| Provision                for credit losses                            |   |                                                           | 339,260  |   |   | 553,235 |   |
| Net                write-offs                                         |   |                                                           | (444,260 | ) |   | (371,660 | ) |
| Allowance                for possible losses, end of the period       |   | $                                                              | 300,000  |   | $ | 301,575 |   |

| **Annual                Periods Ending****June                30,** |   | **Direct****Financing                Leases** |       | **Notes** |   | **Operating                Leases** |   | **Total** |      |
|---------------------------------------------------------------------|--------|-----------------------------------------------|------------|-----------|--------|-------------------------------------|--------|-----------|-----------|
| 2007                                                           |   | $                                             | 36,207,650 |      | $      | 2,266,826                           |   | $         | 656,444   |   | $ | 39,130,920 |   |
| 2008                                                           |   |                                          | 24,492,325 |      |   | 1,999,437                           |   |      | 296,743   |   |   | 26,788,505 |   |
| 2009                                                           |   |                                          | 15,305,587 |      |   | 1,525,769                           |   |      | 142,343   |   |   | 16,973,699 |   |
| 2010                                                           |   |                                          | 7,015,375  |      |   | 1,255,101                           |   |      | 49,932    |   |   | 8,320,408 |   |
| 2011                                                           |   |                                          | 2,391,947  |      |   | 952,773                             |   |      | −   |   |   | 3,344,720 |   |
| Thereafter                                                     |   |                                          | 1,987,651  |      |   | 786,027                             |   |      | −   |   |   | 2,773,678 |   |
|                                                                |   | $                                             | 87,400,535 |      | $      | 8,785,933                           |   | $         | 1,145,462 |   | $ | 97,331,930 |   |

**NOTE      6− OTHER ASSETS**

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**LEASE      EQUITY APPRECIATION FUND I, L.P.**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS − (Continued)**

**June      30, 2006**

**(unaudited)**

**NOTE      7 **
**-**
**      DEBT**

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   | **June                30, 2006** |       | **December                31, 2005** |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------|------------|--------------------------------------|--------|
| WestLB                AG, New York Branch revolving line of credit, with an aggregate borrowing                limit of $75.0 million collateralized by specific lease receivables                and                related equipment, with a 1% credit reserve of the outstanding line                of                credit. Interest on this facility is calculated at LIBOR plus .95%                per                annum. To mitigate fluctuations in interest rates the Fund has entered                into interest rate swap agreements. The interest rate swap agreements                terminate at various dates ranging from August 2011 to July 2013.                The                interest rate swap agreements fix the interest rate on this facility                at                5.35% on a weighted average basis. Interest and principal are due                monthly.                The line of credit is renewable for one year periods on December                31, 2006                and 2007. |   | $                                | 65,432,437 |                                 | $      | 62,244,034 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                             |       |                                 |   |   |   |
| 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. Interest and principal are due monthly,                with a                with a final maturity date of February 15, 2009.                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                             | 6,246,206  |                                 |   | 8,288,944 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                             |       |                                 |   |   |   |
| National                City Commercial Capital Corporation f/k/a Information Leasing Corporation,                collateralized by specified lease receivables, generally equal to                the sum                of the receivables, discounted to present value at 5.79%, less a                credit                reserve of 8% after security deposit. Interest and principal are                due                monthly, with a final maturity date of June 10, 2010.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |                             | 4,987,654  |                                 |   | 6,793,908 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                             |       |                                 |   |   |   |
| Note                Payable to General Partner, dated June 30, 2006 collateralized by                specific lease receivable. The note has a maturity date of July 31,                2006                and accrues interest at 8% per annum. The note was repaid in July                2006.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                             | 5,372,585  |                                 |   | − |   |
|  Total                outstanding debt                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   | $                                | 82,038,882 |                                 | $      | 77,326,886 |   |

| 2007       |   | $      | 34,153,555 |   |
|------------|--------|--------|------------|--------|
| 2008       |   |   | 20,769,719 |   |
| 2009       |   |   | 14,508,195 |   |
| 2010       |   |   | 6,681,442  |   |
| 2011       |   |   | 3,770,421  |   |
| Thereafter |   |   | 2,155,550  |   |
|       |   | $      | 82,038,882 |   |

----

**LEASE      EQUITY APPRECIATION FUND I, L.P.**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS − (Continued)**

**June      30, 2006**

**(unaudited)**

**NOTE      8 **
**-**
**      DERIVATIVE INSTRUMENTS**

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**LEASE      EQUITY APPRECIATION FUND I, L.P.**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS − (Continued)**

**June      30, 2006**

**(unaudited)**

**NOTE      9 **
**-**
**      TRANSACTIONS WITH AFFILIATES**

|                                              |   | **Three                Months Ended****June                30,** |    | **Six                Months Ended****June                30,** |   |
|---------------------------------------------------|--------|------------------------------------------------------------------|---------|----------------------------------------------------------------|--------|
|                                              |   | **2006**                                                         |    | **2005**                                                       |   | **2006** |   | **2005** |   |
| Acquisition                fees                   |   | $                                                                | 288,925 |                                                           | $      | 158,433 |   | $ | 412,260 |   | $ | 1,049,736 |   |
| Asset                management fees              |   | $                                                                | 300,352 |                                                           | $      | 224,101 |   | $ | 534,668 |   | $ | 378,339 |   |
| Reimbursed                administrative expenses |   | $                                                                | 165,095 |                                                           | $      | 207,528 |   | $ | 268,953 |   | $ | 347,787 |   |

----

**LEASE      EQUITY APPRECIATION FUND I, L.P.**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS − (Continued)**

**June      30, 2006**

**(unaudited)**

**NOTE      10 **
**-**
**      ALLOCATION OF PARTNERSHIP INCOME, LOSS AND CASH      DISTRIBUTIONS**

**NOTE      11 **
**-**
**      COMPREHENSIVE INCOME **

**NOTE      12 **
**-**
** **
**NET      INCOME (LOSS) PER LIMITED PARTNERSHIP UNIT**

----

**ITEM      2.** **MANAGEMENT’S      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION****AND      RESULTS OF OPERATIONS (unaudited)**

**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 1A, under the caption “Risks Inherent in Our Business,” in our      annual report on Form 10-K for fiscal 2005. 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**

| ·   | 500                or fewer employees; |
|--------------------|----------------------------------------|

| ·   | $1                billion or less in total assets; or |
|--------------------|-------------------------------------------------------|

| ·   | $100                million or less in total annual                sales. |
|--------------------|---------------------------------------------------------------------------|

----

**Our      Lease Portfolio **

**Direct      Financing Leases and Notes**

|                                  |   | **June                30, 2006**  |   |           |        |   | **December                31, 2005** |   |
|---------------------------------------|--------|-----------------------------------|--------|----------------|--------|--------|--------------------------------------|--------|
| **Type                of Equipment**  |        | **Net                Investment** |   | **Percentage** |   |   | Type              of Equipment       |   | **Net                Investment** |   | **Percentage** |   |
| Medical                Equipment      |   | $                                 | 22,667 |           |   | 26.2   | %                                    |   | Industrial                Equipment |   | $ | 22,098 |   |   | 27.2 | % |
| Industrial                Equipment   |   |                              | 20,421 |           |   | 23.6   |                                 |   | Medical                Equipment |   |   | 18,993 |   |   | 23.4 |   |
| Computers                             |   |                              | 16,939 |           |   | 19.6   |                                 |   | Computers |   |   | 13,302 |   |   | 16.4 |   |
| Office                Equipment       |   |                              | 8,468  |           |   | 9.8    |                                 |   | Office                Equipment |   |   | 9,398 |   |   | 11.6 |   |
| Garment                Care           |   |                              | 4,072  |           |   | 4.7    |                                 |   | Software |   |   | 4,269 |   |   | 5.2 |   |
| Software                              |   |                              | 3,925  |           |   | 4.5    |                                 |   | Garment                Care |   |   | 3,585 |   |   | 4.4 |   |
| Restaurant                  Equipment |   |                              | 3,062  |           |   | 3.5    |                                 |   | Building                systems |   |   | 2,980 |   |   | 3.7 |   |
| Building                Systems       |   |                              | 2,719  |           |   | 3.1    |                                 |   | Restaurant                Equipment |   |   | 2,976 |   |   | 3.7 |   |
| Communications                        |   |                              | 2,338  |           |   | 2.7    |                                 |   | Communications |   |   | 2,409 |   |   | 3.0 |   |
| Agriculture                           |   |                              | 1,959  |           |   | 2.3    |                                 |   | Agriculture |   |   | 1,178 |   |   | 1.4 |   |
|                                  |   | $                                 | 86,570 |           |   | 100.0  | %                                    |   |   |   | $ | 81,188 |   |   | 100.0 | % |

**Operating      Leases**

|                                 |   | **June                30, 2006**  |   |           |        |   | **December                31, 2005** |   |
|--------------------------------------|--------|-----------------------------------|--------|----------------|--------|--------|--------------------------------------|--------|
| **Type                of Equipment** |   | **Net                Investment** |   | **Percentage** |   |   | Type              of Equipment       |   | **Net                Investment** |   | **Percentage** |   |
| Office                Equipment      |   | $                                 | 367    |           |   | 26.7   | %                                    |   | Office                Equipment |   | $ | 505 |   |   | 29.1 | % |
| Computers                            |   |                              | 359    |           |   | 26.1   |                                 |   | Computers |   |   | 476 |   |   | 27.3 |   |
| Industrial                Equipment  |   |                              | 332    |           |   | 24.2   |                                 |   | Industrial                Equipment |   |   | 380 |   |   | 21.8 |   |
| Communications                       |   |                              | 263    |           |   | 19.2   |                                 |   | Communications |   |   | 323 |   |   | 18.5 |   |
| Medical                Equipment     |   |                              | 42     |           |   | 3.1    |                                 |   | Medical                Equipment |   |   | 41 |   |   | 2.3 |   |
| Software                             |   |                              | 7      |           |   | .5     |                                 |   | Software |   |   | 16 |   |   | 0.9 |   |
| Restaurant                Equipment  |   |                              | 3      |           |   | .2     |                                 |   | Restaurant                Equipment |   |   | 2 |   |   | 0.1 |   |
|                                 |   | $                                 | 1,373  |           |   | 100.0  | %                                    |   |   |   | $ | 1,743 |   |   | 100.0 | % |

----

**Direct      Financing Leases and Notes**

|                                         |   | **June                30, 2006**  |   |           |        |   | **December                31, 2005** |   |
|----------------------------------------------|--------|-----------------------------------|--------|----------------|--------|--------|--------------------------------------|--------|
| **Type                of Business**          |   | **Net                Investment** |   | **Percentage** |   |        | Type              of Business        |   | **Net                Investment** |   | **Percentage** |   |
| Services                                     |   | $                                 | 49,123 |           |   | 56.7   | %                                    |   | Services |   | $ | 44,929 |   |   | 55.4 | % |
| Retail                Trade                  |   |                              | 9,054  |           |   | 10.5   |                                 |   | Retail                Trade |   |   | 8,897 |   |   | 11.0 |   |
| Manufacturing                                |   |                              | 8,421  |           |   | 9.7    |                                 |   | Manufacturing |   |   | 8,774 |   |   | 10.8 |   |
| Transportation/Communication/Energy          |   |                              | 3,206  |           |   | 3.7    |                                 |   | Transportation/Communication/Energy |   |   | 3,826 |   |   | 4.7 |   |
| Construction                                 |   |                              | 3,845  |           |   | 4.4    |                                 |   | Construction |   |   | 3,640 |   |   | 4.5 |   |
| Finance/Insurance/Real                Estate |   |                              | 2,966  |           |   | 3.4    |                                 |   | Finance/Insurance/Real                Estate |   |   | 3,125 |   |   | 3.8 |   |
| Wholesale                Trade               |   |                              | 3,092  |           |   | 3.6    |                                 |   | Wholesale                Trade |   |   | 3,085 |   |   | 3.8 |   |
| Agriculture/Forestry/Fishing                 |   |                              | 1,846  |           |   | 2.1    |                                 |   | Agriculture/Forestry/Fishing |   |   | 2,446 |   |   | 3.0 |   |
| Public                Administration         |   |                              | 1,812  |           |   | 2.1    |                                 |   | Public                Administration |   |   | 1,246 |   |   | 1.5 |   |
| Other                                        |   |                              | 3,205  |           |   | 3.8    |                                 |   | Other |   |   | 1,220 |   |   | 1.5 |   |
|                                         |   | $                                 | 86,570 |           |   | 100.0  | %                                    |   |   |   | $ | 81,188 |   |   | 100.0 | % |

**Operating      Leases**

|                                         |   | **June                30, 2006**  |   |           |        |   | **December                31, 2005** |   |
|----------------------------------------------|--------|-----------------------------------|--------|----------------|--------|--------|--------------------------------------|--------|
| **Type                of Business**          |   | **Net                Investment** |   | **Percentage** |   |   | Type              of Business        |   | **Net                Investment** |   | **Percentage** |   |
| Services                                     |   | $                                 | 565    |           |   | 41.1   | %                                    |   | Services |   | $ | 706 |   |   | 40.3 | % |
| Construction                                 |   |                              | 384    |           |   | 28.0   |                                 |   | Construction |   |   | 451 |   |   | 25.9 |   |
| Wholesale                Trade               |   |                              | 136    |           |   | 9.9    |                                 |   | Wholesale                Trade |   |   | 199 |   |   | 11.4 |   |
| Manufacturing                                |   |                              | 93     |           |   | 6.8    |                                 |   | Manufacturing |   |   | 136 |   |   | 7.8 |   |
| Transportation/Communication/Energy          |   |                              | 83     |           |   | 6.0    |                                 |   | Transportation/Communication/Energy |   |   | 113 |   |   | 6.5 |   |
| Finance/Insurance/Real                Estate |   |                              | 82     |           |   | 6.0    |                                 |   | Finance/Insurance/Real                Estate |   |   | 102 |   |   | 5.9 |   |
| Public                Administration         |   |                              | 11     |           |   | 0.8    |                                 |   | Public                Administration |   |   | 14 |   |   | 0.8 |   |
| Retail                Trade                  |   |                              | 10     |           |   | 0.7    |                                 |   | Retail                Trade |   |   | 12 |   |   | 0.7 |   |
| Other                                        |   |                              | 9      |           |   | 0.7    |                                 |   | Other |   |   | 10 |   |   | 0.7 |   |
|                                         |   | $                                 | 1,373  |           |   | 100.0  | %                                    |   |   |   | $ | 1,743 |   |   | 100.0 | % |

----

**Results      of Operations **

*Three      Months Ended June 30, 2006 compared to Three Months Ended June 30,      2005*

| ·   | Interest                income on equipment financings decreased to $1,568,770 for the three                months ended June 30, 2006 as compared to $1,788,981 for the three                months                June 30, 2005 a decrease of $220,211                (12.3%). |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Rental                income decreased to $199,384 for the three months ended June 30,                2006 as                compared to $265,557 for the three months ended June 30, 2005, a                decrease                of $66,173 (24.9%). |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Gain                on sale of equipment and lease dispositions increased to $61,941                for the                three months ended June 30, 2006 as compared to a loss of $2,524                for the                three months ended June 30, 2005, an increase of $64,465. Gains and                losses                from equipment and lease dispositions may vary significantly from                period                to period. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Other                income increased to $139,267 for the three months ended June 30,                2006 as                compared to $86,891 for the three months ended June 30, 2005, an                increase                of $52,376 (60.3%). Other income consists primarily of late fee                income.  Late fee income has increased due to the increase and aging                of the financing portfolio coupled with an increase in payment collection                efforts.  |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Interest                expense decreased to $1,086,149 for the three months ended June 30,                2006                as compared to $1,240,338 for the three months ended June 30, 2005,                a                decrease of $154,189 (12.4%) due to our decrease in average debt                outstanding. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | General                and administrative expenses decreased to $144,547 for the three months                ended June 30, 2006 as compared to $152,121 for the three months                ended                June 30, 2005, a decrease of $7,574 (5.0%). |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Our                provision for credit losses decreased to $193,786 for the three months                ended June 30, 2006 as compared to $312,785 for the three months                ended                June 30, 2005, a decrease of $118,999 (38.0%). The decrease in our                provision for credit losses is principally a result of increased                collection efforts and the maturing of the portfolio. We provide                for bad                debts when losses are likely to occur based on a migration analysis                of                past due payments and economic                conditions. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Administrative                expenses reimbursed to related party decreased to $165,095 for the                three                months ended June 30, 2006 as compared to $207,528 for the three                months                ended June 30, 2005, a decrease of $42,433 (20.4%). As our investment                in                financing assets matures there is less expense incurred by our general                partner to service our portfolio. As our portfolio matures, we require                less support than during the start-up                phase. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Management                fees increased to $300,352 for the three months ended June 30, 2006                as                compared to $224,101 for the three months ended June 30, 2005, an                increase                of $76,251 (34.0%). This increase is directly attributable to our                continuing receipt of payments on lease assets, since management                fees are                paid based on lease payments received. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

*Six      Months Ended June 30, 2006 compared to Six Months Ended June 30,      2005*

| ·   | Interest                income on equipment financings increased to $3,088,975 for the six                months                ended June 30, 2006 as compared to $2,982,065 for the six months                June 30,                2005 an increase of $106,910                (3.6%). |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Gain                on sale of equipment and lease dispositions increased to $166,216                for the                six months ended June 30, 2006 as compared to a loss of $5,405 for                the six                months ended June 30, 2005, an increase of $171,621 (3175%). Gains                and                losses from equipment and lease dispositions may vary significantly                from                period to period. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Other                income increased to $275,498 for the six months ended June 30, 2006                as                compared to $162,146 for the six months ended June 30, 2005, an increase                of $113,352 (69.9%). Other income consists primarily of late fee                income. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Rental                income decreased to $430,801 for the six months ended June 30, 2006                as                compared to $510,197 for the six months ended June 30, 2005, a decrease                of                $79,396 (15.6%) as a result of terminating operating                leases. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Depreciation                on operating leases decreased to $355,773 for the six months ended                June                30, 2006 as compared to $418,688 for the six months ended June 30,                2005, a                decrease of $62,915 (15%). This is a result of operating lease                dispositions. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Our                provision for credit losses decreased to $339,260 for the six months                ended                June 30, 2006 as compared to $553,235 for the six months ended June                30,                2005, a decrease of $213,975 (38.7%). The decrease in our provision                for                credit losses is principally a result of increased collection efforts                and                the maturing of the portfolio. We provide for bad debts when losses                are                likely to occur based on a migration analysis of past due payments                and                economic conditions. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Administrative                expenses reimbursed to related party decreased to $268,953 for the                six                months ended June 30, 2006 as compared to $347,787 for the six months                ended June 30, 2005, a decrease of $78,834 (22.7%). As our investment                in                financing assets matures there is less expense incurred by our general                partner to service our portfolio. As our portfolio matures, we require                less support than during the start-up                phase. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Interest                expense increased to $2,158,429 for the six months ended June 30,                2006 as                compared to $2,073,131 for the six months ended June 30, 2005, an                increase                $85,298 (4.1%) due to an increase in LIBOR. On June 30, 2006 the                interest                rate margin on our West LB facility was reduced from 1.10 to .95                bases                points |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Management                fees increased to $534,668 for the six months ended June 30, 2006                as                compared to $378,339 for the six months ended June 30, 2005, an increase                of $156,329 (41.3%). This increase is directly attributable to our                continuing receipt of payments on lease assets, since management                fees are                paid based on lease payments                received. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | General                and administrative expenses increased to $276,330 for the six months                ended                June 30, 2006 as compared to $257,360 for the six months ended June                30,                2005, an increase of $18,970 (7.4%). |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

*Six      Months Ended June 30, 2006 compared to Six Months Ended June30,      2005*

**Liquidity      and Capital Resources**

|                                                                     |   | **June                30,** |       |
|--------------------------------------------------------------------------|--------|-----------------------------|------------|
|                                                                     |   | **2006**                    |       | **2005** |   |
| Net                cash provided by (used in) operating activities  |   | $                           | 2,165,346  |   | $ | (347,194 | ) |
| Net                cash (used in) investing activities              |   |                        | (193,997   | ) |   | (38,570,527 | ) |
| Net                cash (used in) provided by financing activities  |   |                        | (1,392,195 | ) |   | 40,707,940 |   |
| Increase                in cash                                     |   | $                           | 579,154    |   | $ | 1,790,219 |   |

----

**ITEM      3.** **QUANTITATIVE      AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK**

**ITEM      4.** **CONTROLS      AND PROCEDURES**

**PART      II - OTHER INFORMATION**

**ITEM      6.** **EXHIBITS**

| Exhibit                No. |   | Description                                                                                                                                                         |
|----------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 3.1                        |   | Amended                and Restated Agreement of Limited Partnership (1)                                                                                            |
| 3.2                        |   | Certificate                of Limited Partnership (2)                                                                                                               |
| 4.1                        |   | Forms                of letters sent to limited partners confirming their investment                (2)                                                             |
| 10.6                       |   | Amendment                No. 3 to Secured Loan Agreement, dated June 28, 2006                                                                                       |
| 31.1                       |   | Rule                13a-14(a)/Rule 15d-14(a) Certification of Chief Executive                Officer.                                                               |
| 31.2                       |   | Rule                13a-14(a)/Rule 15d-14(a) Certification of Chief Financial                Officer.                                                               |
| 32.1                       |   | Certification                of Chief Executive Officer pursuant to Section 1350 of Chapter 63                of Title                18 of the United States Code. |
| 32.2                       |   | Certification                of Chief Financial Officer pursuant to Section 1350 of Chapter 63                of Title                18 of the United States Code. |

|  (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.                        |

----

**SIGNATURES**

|                           | **LEASE                EQUITY APPRECIATION FUND I, L.P.**                      |
|--------------------------------|--------------------------------------------------------------------------------|
|                           | A                Delaware Limited Partnership                                  |
|                           | By:                LEAF Financial Corporation, its General Partner             |
|                           |                                                                           |
| August                14, 2006 | /s/                Crit DeMent CRIT                DEMENT                 |
|                           | Chairman                and Chief Executive Officer of the General Partner     |
|                           |                                                                           |
| August                14, 2006 | /s/                Robert K. Moskovitz ROBERT                K. MOSKOVITZ |
|                           | Chief                Financial Officer, Treasurer of the General Partner       |
|                           |                                                                           |

----