|UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549


FORM 10-Q


(Mark One)



/X/ QUARTERLY REPORT
PURSUANT TO SECTION 13 OR 15(d) OFTHE SECURITIES EXCHANGE ACT OF 1934



For the quarterly
period ended March 31, 2004



OR



/ / TRANSITION REPORT
PURSUANT TO SECTION 13 OR 15(d) OFTHE 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 1000Philadelphia,
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...






LEASE EQUITY
APPRECIATION FUND I, L.P.


INDEX TO QUATERLY REPORTON FORM 10-Q
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|           |                                                                         | Page   
|---------- | ----------------------------------------------------------------------- | -------
|PART I     | FINANCIAL INFORMATION                                                   |        
|           |                                                                         |        
|Item 1     | Financial Statements                                                   
|           |                                                                         |        
|           | Balance Sheets - March 31, 2004 (Unaudited) and                        
|           | December 31, 2003 (Audited)                                             | 3      
|           |                                                                         |        
|           | Statements of Operations (Unaudited)                                   
|           | Three Months Ended March 31, 2004 and 2003                              | 4      
|           |                                                                         |        
|           | Statement of Partner's Capital (Unaudited)                             
|           | Three Months Ended March 31, 2004                                       | 5      
|           |                                                                         |        
|           | Statement of Cash Flows (Unaudited)                                    
|           | For the Three Months Ended March 31, 2004 and 2003                      | 6      
|           |                                                                         |        
|           | Notes to Consolidated Financial Statements - March 31, 2004 (Unaudited) | 7 - 17 
|           |                                                                         |        
|Item 2     | Management's Discussion and Analysis of Financial Condition            
|           | and Results of Operations                                               | 18 - 23
|           |                                                                         |        
|Item 3     | Quantitative and Qualitative Disclosures about Market Risk              | 25     
|           |                                                                         |        
|Item 4     | Controls and Procedures                                                 | 25     
|           |                                                                         |        
|PART II    | OTHER INFORMATION                                                      
|           |                                                                         |        
|Item 1.    | Legal Proceedings                                                       | 26     
|           |                                                                         |        
|Item 2.    | Changes in Securities and Use of Proceeds                               | 26     
|           |                                                                         |        
|Item 3.    | Defaults upon Senior Securities                                         | 27     
|           |                                                                         |        
|Item 4.    | Submission of Matters to a Vote of Security Holders                     | 27     
|           |                                                                         |        
|Item 5.    | Other Information                                                       | 27     
|           |                                                                         |        
|Item 6.    | Exhibits and Reports on Form 8-K                                        | 27     
|           |                                                                         |        
|SIGNATURES |                                                                         | 28     

|2








LEASE EQUITY
APPRECIATION FUND I, L.P.BALANCE SHEETS
|--------------------------------------------------------------

|                                                                         | March 31,
2004
(Unaudited) | December 31,
2003
(Audited)
|------------------------------------------------------------------------ | -------------------------- | ---------------------------
|ASSETS                                                                   |                            |                            
|Cash                                                                     |                            | $  1,169,470               
|Accounts receivable                                                      |                            | 88,978                     
|Other receivables                                                        |                            | 2,163,370                  
|Net due from related parties                                             |                            | --                         
|Net investment in direct financing leases (net of allowance for possible |                           
|losses of $15,000 and $5,000)                                            |                            | 27,391,389                 
|Equipment under operating leases (net of accumulated depreciation of     |                           
|$207,625 and $154,113)                                                   |                            | 259,967                    
|Other assets                                                             |                            | 305,327                    
|                                                                         |                            |                            
|                                                                         |                            | $31,378,501                
|                                                                         |                            |                            
|LIABILITIES AND PARTNERS' CAPITAL                                        |                           
|Liabilities:                                                             |                           
|Accounts payable and accrued expenses                                    |                            | $     200,367              
|Partners' distributions payable                                          |                            | 71,019                     
|Net due to related parties                                               |                            | 223,085                    
|Security deposits                                                        |                            | 38,933                     
|Debt                                                                     |                            | 22,667,699                 
|Subscription deposits                                                    |                            | 105,000                    
|                                                                         |                            |                            
|Total liabilities                                                        |                            | 23,306,103                 
|Partners' Capital                                                        |                            | 8,072,398                  
|                                                                         |                            |                            
|                                                                         |                            | $31,378,501                
|                                                                         |                            |                            

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


3






LEASE EQUITY
APPRECIATION FUND I, L.P.STATEMENTS OF OPERATIONS(Unaudited)
|--------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                                                 | Three Months Ended March 31,
|---------------------------------------------------------------- | ----------------------------
|
|Interest, rental and fee income                                  |                             
|Interest expense                                                 |                             
|                                                                 |                             
|Net interest, rental and fee income                              |                             
|Other income                                                     |                             
|                                                                 |                             
|                                                                 |                             
|                                                                 |                             
|Reimbursed expenses - related party                              |                             
|General and administrative                                       |                             
|Management fee - related party                                   |                             
|Depreciation                                                     |                             
|                                                                 |                             
|                                                                 |                             
|                                                                 |                             
|Net loss                                                         |                             
|                                                                 |                             
|Net loss per weighted average limited partnership unit           |                             
|                                                                 |                             
|Weighted average number of limited partnership units outstanding |                             
|during the period                                                |                             
|                                                                 |                             

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


4







LEASE EQUITY
APPRECIATION FUND I, L.P.STATEMENT OF PARTNERS CAPITALFor the Three Months
Ended March 31, 2004(Unaudited)
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                      | General Partner | Limited Partners | Partners' Capital
|------------------------------------- | --------------- | ---------------- | -----------------
|
|Balance, January 1, 2004              |                 | $(7,757          | )                
|Partners' contributions               |                 | --               |                  
|Offering costs related to the sale of |                
|Partnership units                     |                 | --               |                  
|Distributions paid                    |                 | (1,296           | )                
|Partners' distributions payable       |                 | (710             | )                
|Distributions reinvested              |                 | --               |                  
|Net loss                              |                 | (926             | )                
|                                      |                 |                  |                  
|Balance, March 31, 2004               |                 | $(10,689         | )                
|                                      |                 |                  |                  

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


5







LEASE EQUITY
APPRECIATION FUND I, L.P.STATEMENT OF CASH FLOWSFor the Three Months
Ended March 31, 2004 (Unaudited)
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                                                                   | Three Months Ended March 31,
|---------------------------------------------------------------------------------- | ----------------------------
|
|Cash flows from operating activities:                                              |                             
|Net loss                                                                           |                             
|Adjustments to reconcile net loss to net cash provided by operating
   activities: |                             
|Gain on sale of equipment and lease dispositions, net                              |                             
|Depreciation                                                                       |                             
|Provision for possible losses                                                      |                             
|Amortization of deferred financing costs                                           |                             
|Increase in accounts receivable                                                    |                             
|Decrease in other receivables                                                      |                             
|Decrease in due from related parties, net                                          |                             
|(Increase) decrease in other assets                                                |                             
|Increase in security deposits                                                      |                             
|(Decrease) increase in accounts payable and accrued expenses                       |                             
|                                                                                   |                             
|Net cash provided by operating activities                                          |                             
|                                                                                   |                             
|Cash flows from investing activities:                                              |                             
|Acquisition of equipment held for sale and under operating leases                  |                             
|Increase (decrease) in accounts payable - equipment                                |                             
|Investment in direct financing leases                                              |                             
|Proceeds from direct financing leases, net of earned income                        |                             
|Proceeds from sale of equipment and lease dispositions                             |                             
|                                                                                   |                             
|Net cash used in investing activities                                              |                             
|                                                                                   |                             
|Cash flows from financing activities:                                              |                             
|Increase in cash reserves                                                          |                             
|Increase in deferred financing costs                                               |                             
|Increase in subscription deposits                                                  |                             
|Proceeds from debt                                                                 |                             
|Repayment of debt                                                                  |                             
|Partners' capital contribution                                                     |                             
|Cash distributions reinvested by Partners                                          |                             
|Partners' distributions paid                                                       |                             
|Payment of offering costs incurred for the sale of partnership units               |                             
|                                                                                   |                             
|Net cash provided by financing activities                                          |                             
|                                                                                   |                             
|Increase in cash                                                                   |                             
|Cash, beginning of period                                                          |                             
|                                                                                   |                             
|Cash, end of period                                                                |                             
|                                                                                   |                             

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


6








LEASE EQUITY
APPRECIATION FUND I, L.P.NOTES TO FINANCIAL
STATEMENTS March 31, 2004



Basis of Presentation


The
accompanying unaudited 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 three months ended March 31, 2004 are not necessarily indicative of the
results that may be expected for the year ended December 31, 2004.



Note 1. 
Organization and Nature of Business


The Fund is a
Delaware limited partnership that was formed on January 31, 2002 by LEAF Asset Management, Inc.
(the General Partner).  The General Partner is a Delaware corporation and a wholly owned subsidiary of LEAF
Financial Corporation (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 March 31, 2004, the Fund raised $10,266,973 through the sale of 103,268 limited
partnership units and $292,187 from the sale of 2,956 limited partnership units
from the reinvestment of cash distributions by limited partners. 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.


At
March 31, 2004 and December 31, 2003, the General Partner had purchased a
limited partnership interest in the Fund of 4.3% and 5.0%, respectively. The Fund will
terminate on December 31, 2027, or earlier, if a dissolution event occurs as defined in
the 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





LEASE EQUITY
APPRECIATION FUND I, L.P.NOTES TO FINANCIAL STATEMENTSMarch 31, 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.



Impairment of Long-Lived
Assets


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 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
instruments, 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 March 31, 2004, the Fund had deposits at a bank of
$1,218,296, of which $1,118,296 was over the insurance limit of the Federal Deposit
Insurance Corporation. No losses have been experienced on such deposits.


8







LEASE EQUITY
APPRECIATION FUND I, L.P.NOTES TO FINANCIAL
STATEMENTS March 31, 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 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 four criteria to be classified as direct financing leases are
deemed to be operating leases. Under the accounting for operating leases, the cost,
including acquisition fees associated with lease placements, of the leased equipment is
recorded as an asset and depreciated on a straight-line basis over its estimated useful
life, 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 three months ended
March 31, 2004 or 2003.


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


9






LEASE EQUITY
APPRECIATION FUND I, L.P.NOTES TO FINANCIAL
STATEMENTS  (Continued) March 31, 2004




Note 2.  Summary of
Significant Accounting Policies (Continued)



Income Taxes


Federal
and 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 three month period ended March 31, 2004, the Fund paid $381,066 for interest. No cash
payments were made during the three month period ended March 31, 2003 for interest.


The
General Partner declared and paid cash distributions of $71,019 in April 2004 for the
month of March 2004 to all admitted partners as of March 31, 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.
10






LEASE EQUITY
APPRECIATION FUND I, L.P.NOTES TO FINANCIAL
STATEMENTS  (Continued)March 31, 2004




Note 2.  Summary of
Significant Accounting Policies (Continued)



Recent Accounting
Pronouncements


In
January 2003, the Financial Accounting Standards Board issued FIN 46 Consolidation of Variable Interest
Entities, revised December 2003 (FIN 46R). FIN 46R clarifies the
application of Accounting Research Bulletin 51, Consolidated Financial
Statements, for certain entities that do not have sufficient equity at risk for the
entity to finance its activities without additional subordinated financial support from
other parties or in which equity investors do not have the characteristics of a
controlling financial interest (variable interest entities). Variable interest
entities within the scope of FIN 46R will be required to be consolidated by their primary
beneficiary. The primary beneficiary of a variable interest entity is determined to be the
party that absorbs a majority of the entitys expected losses, receives a majority of
its expected returns, or both. FIN 46R applies to entities considered to be
special-purpose entities, as defined, no later than as of the end of the first reporting
period ending after December 15, 2003 for other entities and no later than the end of the first reporting
period that ends after March 15, 2004. The Fund does not have any special purpose entities
as of March 31, 2004.



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
March 31, 2004 and December 31, 2003, other receivables include cash reserves of
$1,714,049 and $1,595,631, respectively, being held by the Funds lenders
and $449,321 and $574,246, respectively, of customers payments deposited in a
lockbox account that had not yet been transferred to the Fund.


11







LEASE EQUITY
APPRECIATION FUND I, L.P.NOTES TO FINANCIAL
STATEMENTS  (Continued)March 31, 2004



Note 2.  Summary of
Significant Accounting Policies (Continued)



Other Assets


At
March 31, 2004 and December 31, 2003 other assets include $162,855 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 investments or, if the partnership 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 $201,592 during
the three months period ended March 31, 2004, to all admitted partners as of March 31,
2004. No cash distributions were made during the three month period ended March 31, 2003.
The General Partner declared and paid a cash distribution of $71,019 in April 2004 for the
month of March 2004 to all admitted partners as of March 31, 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
income for any fiscal period during the reinvestment period (the period commencing with
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.


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.


12







LEASE EQUITY
APPRECIATION FUND I, L.P.NOTES TO FINANCIAL
STATEMENTS  (Continued) March 31, 2004



Note 4. 
Investment in Lease Receivables


The
Funds direct financing leases are for initial lease terms ranging from approximately
3 to 80 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 March 31, 2004, approximately 16% and 10% of leased equipment was located
in the states of California and Illinois, respectively. No other state accounted for more
than 10% of the Fund's equipment portfolio.


The
components of the net investment in direct financing leases are as follows at:
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                    | March 31,2004 | December 31, 2003
|----------------------------------- | ------------- | -----------------
|Total future minimum lease payments |               | $ 31,284,055     
|Unearned rental income              |               | (4,303,807       
|Unguaranteed residuals              |               | 343,528          
|Unearned residual income            |               | (76,655          
|                                    |               |                  
|                                    |               | 27,247,121       
|Allowance for possible losses       |               | (15,000          
|                                    |               |                  
|                                    |               | $ 27,232,121     
|                                    |               |                  

|A
summary of the allowance for possible losses for the three month period ended March 31,
2004 and the year ended December 31, 2003 are as follows:
|---------------------------------------------------------------------------------------------------------------------------------------------------

|                                                       | March 31,2004 | December 31, 2003
|------------------------------------------------------ | ------------- | -----------------
|Allowance for possible losses, beginning of the period |               | $ 
        5,000 
|Provision for losses                                   |               | 10,000           
|                                                       |               |                  
|Allowance for possible losses, end of period           |               | $        15,000  
|                                                       |               |                  

|13







LEASE EQUITY
APPRECIATION FUND I, L.P.NOTES TO FINANCIAL
STATEMENTS  (Continued)March 31, 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 twelve-month periods
ending March 31 and thereafter are as follows:
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|           | Direct Financing | Operating
|---------- | ---------------- | ---------
|2005       |                  |          
|2006       |                  |          
|2007       |                  |          
|2008       |                  |          
|2009       |                  |          
|Thereafter |                  |          
|           |                  |          
|           |                  |          
|           |                  |          

|14







LEASE EQUITY
APPRECIATION FUND I, L.P.NOTES TO FINANCIAL
STATEMENTS  (Continued)March 31, 2004



Note 5.  Debt


The
table below summarizes the Fund's debt at March 31, 2004 and December 31, 2003:
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                                                 | March 31, 2004 | December 31, 2003
|---------------------------------------------------------------- | -------------- | -----------------
|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, 2009                  |                | $   16,039,212   
|                                                                 |               
|Information Leasing Corporation, a subsidiary of Provident       |               
|Bank of Cincinnati, Ohio collateralized by specified leases and  |               
|their related receivables to Information Leasing, at a price     |               
|generally equal to the sum of the receivables, discounted to     |               
|present value at 5.79%, less an amount agreed to at the time of  |               
|assignment as a credit reserve 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         |               
|November 1, 2009                                                 |                | 6,628,487        
|                                                                 |                |                  
|Total outstanding debt                                           |                | $   22,667,699   
|                                                                 |                |                  

|The
debt maturity for each of the succeeding twelve month periods ending March 31 and
thereafter, is as follows:
|----------------------------------------------------------------------------------------------------------------

|           | 
|---------- | 
|2005       | 
|2006       | 
|2007       | 
|2008       | 
|2009       | 
|Thereafter | 
|           | 
|           | 
|           | 

|15





LEASE EQUITY
APPRECIATION FUND I, L.P.NOTES TO FINANCIAL
STATEMENTS  (Continued)March 31, 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 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 Fund's partnership agreement. During the Funds five-year
investment period, the 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 months ended March 31, 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 months ended March 31, 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.


16







LEASE EQUITY
APPRECIATION FUND I, L.P.NOTES TO FINANCIAL
STATEMENTS  (Continued)March 31, 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:
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                   | Three Months Ended March 31,
|---------------------------------- | ----------------------------
|
|Acquisition fees                   |                             
|Asset management fees              |                             
|Organization and offering expenses |                             
|Reimbursable expenses              |                             
|Underwriting fees                  |                             
|Sales commission                   |                             

|Due
to related parties at March 31, 2004 was $223,085 and represents net monies due to the
General Partner and/or its affiliates for unpaid management and administrative fees. Due
from related parties at December 31, 2003 was $128,833 and represent net monies due the
Fund from the General Partner and/or its affiliates for amounts collected and not yet
remitted to the Fund.


17






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 this
report, 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


Lease
Equity Appreciation Fund I, L.P. (the Fund), a Delaware limited partnership,
was formed on January 31, 2002. In August, 2002 we began our offering of 500,000 limited
partner units. LEAF Asset Management, Inc. is the General Partner of the Fund. 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 March 31,2004, we had
sold 106,224 limited partner units raising $9,241,608 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.


The
Fund acquires portfolios of existing leases originated by an affiliate of its
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.


The
Funds 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 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, 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.


As
of March 31, 2004, our portfolio contained 640 leases with 594 individual end users. As of
March 31, 2004, we had invested $31,423,011 in equipment under direct financings leases
and $467,592 in equipment under operating leases.


18







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, aggregate purchase price and percentage of the
various types of equipment leased by the Fund under the operating and direct financing
methods as of March 31, 2004:



Direct Financing Leases:
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Type of Equipment        | Purchase Price
of Equipment | Percentage of
Total Equipment
|------------------------ | --------------------------- | -----------------------------
|Climate Control Systems  |                             | $     1,069,159              
|Furniture                |                             | 774,834                      
|General Office Equipment |                             | 14,704,404                   
|Industrial Equipment     |                             | 6,132,426                    
|Medical Equipment        |                             | 7,357,359                    
|Other                    |                             | 1,384,829                    
|                         |                             |                              
|                         |                             | $  31,423,011                
|                         |                             |                              

|Operating Leases:
|-----------------

|Type of Equipment        | Purchase Price
of Equipment | Percentage of
Total Equipment
|------------------------ | --------------------------- | -----------------------------
|Furniture                |                             | $    18,838                  
|General Office Equipment |                             | 136,163                      
|Industrial Equipment     |                             | 77,313                       
|Medical Equipment        |                             | 150,848                      
|Other                    |                             | 84,430                       
|                         |                             |                              
|                         |                             | $  467,592                   
|                         |                             |                              

|19







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 business, aggregate purchase price and percentage
of equipment usage by industrial classification for equipment leased by the Fund under the
operating and direct financing methods as of March 31, 2004:



Direct Financing Leases:
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Type of Business                                    | Purchase Price
of Equipment | Percentage of
Total Equipment
|--------------------------------------------------- | --------------------------- | -----------------------------
|Automotive Dealers/Gasoline Stations and Repair     |                             | $      2,685,181             
|Diversified Financial/Banking/Insurance/Engineering |                             | 7,394,152                    
|Manufacturing / refining                            |                             | 3,326,288                    
|Medical                                             |                             | 10,240,078                   
|Education                                           |                             | 459,487                      
|Wholesale Trade                                     |                             | 947,512                      
|Other                                               |                             | 6,383,270                    
|                                                    |                             |                              
|                                                    |                             | $    31,423,011              
|                                                    |                             |                              

|Operating Leases:
|-----------------

|Type of Business                                    | Purchase Price
of Equipment | Percentage of
Total Equipment
|--------------------------------------------------- | --------------------------- | -----------------------------
|Restaurants                                         |                             | $           62,168           
|Diversified Financial/Banking/Insurance/Engineering |                             | 31,605                       
|Construction                                        |                             | 68,721                       
|Medical                                             |                             | 150,848                      
|Publishing/printing                                 |                             | 48,032                       
|Wholesale Trade                                     |                             | 106,218                      
|                                                    |                             |                              
|                                                    |                             | $ 
       467,592            
|                                                    |                             |                              

|20







Item 2.  MANAGEMENTS
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
               
   RESULTS OF OPERATIONS  
(Unaudited)   (Continued)



Results of Operations


The
Fund had interest, rental and fee income of $624,824 for the three month period ended
March 31, 2004. The principal sources of these revenues were interest income of $552,190
(88.4%) from direct financing leases and rental income of $59,860
(9.6%) from operating leases. Interest expense of $374,216 (48.1%) includes interest incurred on warehouse lines, loans payable and
the amortization of deferred financing costs. As the Funds lease portfolio grows and
the Fund obtains additional debt, interest expense will increase in future periods. Total
operating expenses were $404,364 for the three month period ended March 31, 2004. General
and administrative expenses, including reimbursed expenses-related party, were $270,512
(34.7%). Of this amount, $216,515 (27.8%) was paid to the General Partner as a direct reimbursement of expenses incurred on behalf
of the Fund. The remaining general and administrative expenses of $53,997 (6.9%) were paid directly to vendors of the Fund.
In addition, the Fund paid management fees of $80,340 (10.3%) to its General Partner
for the three month period ended March 31, 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 $53,512 (6.9%) during the
three month period ended March 31, 2004. The Fund recognized a net gain on sale of
equipment and lease dispositions of $53,889 for the three month period ended March 31,
2004.


The
Funds net loss was $92,588 for the three month period ended March 31, 2004. The loss
per limited partner unit, after the loss allocated to the General Partner, was $0.93,
based on a weighted average number of limited partner units outstanding of 98,915 for the
three month period ended March 31, 2004. As would be expected in an initial year of
operation, overhead expenses were incurred prior to the growth of revenues. To attain
profitability the Fund needs to increase its revenues by acquiring additional lease
portfolios. The Fund plans to obtain additional capital to acquire these portfolios. The
Fund expects to obtain capital by selling additional limited partner units and through new
credit facilities, which may include warehouse lines, commercial paper and securitizations.


The
General Partner declared cash distributions of $201,592, of which $130,573
was paid during the three month period ended March 31, 2004. The remaining distributions
of $71,019 were accrued at March 31, 2004 and were paid in April 2004.


Three month period ended March 31,
2004 compared to the three month period ended March 31, 2003.


The
Fund had interest, rental and fee income of $624,824 for the three month period ended
March 31, 2004 as compared to $35,383 for the same period in 2003. The increase of
$589,441 is primarily due to the fact that the fund had just broken escrow and commenced
operations on March 3, 2003 and had invested $4,743,513 in leases as
compared to a portfolio at March 31, 2004 that had 640 leases and had invested $27,651,356
in equipment under lease.


21






Item 2.  MANAGEMENTS
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
               
   RESULTS OF OPERATIONS  
(Unaudited)   (Continued)




Results of Operations
(Continued)


Three month period ended March 31,
2004 compared to the three month period ended March 31, 2003 (Continued)


Other
income includes gains and losses on lease terminations, which vary from transaction to
transaction and there may be significant variations in our gains and losses from period to
period. Other income for the three month period ended March 31, 2004 was $61,168 as
compared to $550 the three month period ended March 31, 2003.


The
Fund had total operating expenses of $778,580 for the three month period ended March 31,
2004 as compared to $38,024 for the same period in 2003. The increase of $740,556 was
primarily due to increases in interest expense of $361,812, reimbursed expenses of
$195,602, general and administrative of $53,882, management fee of $77,524 and
depreciation expense of $51,736. These increases are primarily due to the fact that the
Fund commenced operations on March 3, 2003 and therefore had less operating days in the
three month period ended March 31, 2003 as compared to a full quarter of operations for
the three month period ended March 31, 2004.



Liquidity and Capital
Resources


Our
major sources of liquidity have been obtained by the sale of limited partner units and
borrowings under credit facilities. The offering of limited partner units terminates in
August 2004.


Our
primary cash requirements, in addition to normal operating expenses, are for debt service,
investment in leases and distributions to partners. In addition to cash generated from
operations, we plan to meet our cash requirements through new credit facilities and
through the sale of additional limited partner units.


The
following table sets forth our sources and uses of cash for the three month periods ended
March 31, as indicated:
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                          | 2004 | 2003            
|----------------------------------------- | ---- | ----------------
|Net cash provided by operating activities |      | $        203,113
|Net cash used in investing activities     |      | (3,033,656      
|Net cash provided by financing activities |      | 2,969,619       
|                                          |      |                 
|Increase in cash                          |      | $        139,076
|                                          |      |                 

|The
Fund broke escrow and commenced operations on March 3, 2003.  The Fund sold more limited
partnership units during the three month period ended March 31, 2003 as compared to the
three month period ended March 31, 2004, resulting in an increase of Partners Capital
contribution of $1,784,156.  In addition, we repaid $1,397,629 of debt during the three
month period ended March 31, 2004 as compared to no repayments of debt during the three month period ended March 31, 2003.
22





Item 2.  MANAGEMENTS
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
               
   RESULTS OF OPERATIONS  
(Unaudited)   (Continued)




Liquidity and Capital
Resources (Continued)


Our
liquidity is affected by our ability to sell additional limited partner 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
additional, 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 equipment lease defaults. Higher
than expected equipment 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 level of defaults is sufficiently large, may result in our inability to fully recover
our investment in the underlying equipment. In evaluating our allowance for possible
losses possible, 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 March 31,
2004, our credit evaluation indicated the need for an allowance for possible losses of
$15,000. As our lease portfolio increases we anticipate the allowance for possible losses
will increase.


Net
cash provided by operations of $203,113 for the three month period ended March 31, 2004
consisted primarily of the decrease in amounts due from related parties of $351,918, net
loss of $92,588 and a decrease in accounts payable of $181,223.



Net
cash used in investing activities of $3,033,656 for the three month period ended March 31,
2004 is due primarily to the investment in direct financing leases of $5,967,911 offset by
the proceeds from direct financing leases of $2,048,653 and $812,382 from the sale of
equipment and lease dispositions.


Net
cash provided by financing activities for the three month period ended March 31, 2004 was
$2,969,669. Cash provided by financing of $3,678,926 was primarily derived from the debt
used to acquire lease portfolios and $895,834 from the sale of partnership units. On
January 28, 2004, the fund borrowed an additional $3,678,926 from our line of credit with
OFC Capital, a division of ALFA Financial Corporation, 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 to the fund of
$3,535,615. During the three month period ended March 31, 2004 we declared distributions
of $201,592, of which we distributed $130,573 and accrued $71,019 at March 31, 2004,
which was paid in April 2004. Declared distributions to limited partners was 8% of
invested their capital.



Partnership Distributions


The
General Partner declared cash distributions of $201,592 during the three month period
ended March 31, 2004. No cash distributions were made during the three month period ended
March 31, 2003. The General Partner declared and paid a cash distribution of $71,019 in
April 2004 for the month of March 2004 to all admitted partners as of March 31, 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.



23






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


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)) 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.
25









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 March 31, 2004, we had 270 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. We registered the sale of 500,000 units of limited
partnership interest at an aggregate offering price of $50 million. As of April 20, 2004
we had sold 111,128 units for an aggregate offering price of $11,000,805.


The
following table shows the use of proceeds from the offering since the effective date of
the registration statement through March 31, 2004.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                            | 
|------------------------------------------- | 
|Offering proceeds                           | 
|Expenses:                                   | 
|Sales commission (1)(2)                     | 
|Underwriting fees (1)(2)                    | 
|Organization and offering expenses (3)      | 
|                                            | 
|Public offering expenses                    | 
|                                           
|Net offering proceeds                       | 
|Reserves                                    | 
|                                            | 
|Total proceeds available for investment     | 
|                                           
|Use of proceeds for investment (estimated): | 
|Used in operations (4)                      | 
|Acquisition of lease portfolios (5)         | 
|Working capital                             | 

---

|(1) | We did not pay sales commissions or underwriting fees with respect to the
          6,273.9 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 $811,500 for operating expenses and paid
          asset management fees of $153,435.
|--- | ------------------------------------------------------------------------------------------------------------------------

|(5) | Included are asset acquisition fees of $622,286 that were paid to the General
          Partner.
|--- | ------------------------------------------------------------------------------------------------

|26







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)
|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.
|--- | ----------------------------------------------------------------------------------------------------------------------------

|27







LEASE EQUITY
APPRECIATION FUND I, L.P.



SIGNATURES


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

| |                                        | 
| | -------------------------------------- | 
| | LEASE EQUITY APPRECIATION FUND I, L.P. | 

| |                                  | 
| | -------------------------------- | 
| | A Delaware limited partnership   | 
| | By:  LEAF Asset Management, Inc.

|             |                         | 
|------------ | ----------------------- | 
|May 13, 2004 | By: /s/Miles Herman     | 
|             | MILES HERMAN, PRESIDENT

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

|                 |                                |             
|---------------- | ------------------------------ | ------------
|/s/ Miles Herman | President and Director,        | May 13, 2004
|MILES HERMAN     | of LEAF Asset Management, Inc.
|                 | (Principal Executive Officer) 

|                        |                                |             
|----------------------- | ------------------------------ | ------------
|/s/ Robert K. Moskovitz | Director,                      | May 13, 2004
|ROBERT K. MOSKOVITZ     | of LEAF Asset Management, Inc.
|                        | (Principal Financial Officer) 

28