UNITED STATES
                        SECURITIES AND EXCHANGE COMMISSION

                               Washington, D.C. 20549

                                    FORM 10-Q

(Mark One)
                  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
     (X)              OF THE SECURITIES EXCHANGE ACT OF 1934


                 For the Quarterly Period Ended December 31, 1999

                                        OR

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

For the Transition Period from                to

Commission File Number                  0-13084

                               WARRANTECH CORPORATION
               (Exact name of registrant as specified in its charter)

                  Delaware                           13-3178732
     (State or other jurisdiction of              (I.R.S. Employer
      incorporation or organization)              Identification No.)

      300 Atlantic Street, Stamford, CT                 06901
  (Address of principal executive offices)            (Zip Code)

Registrant's telephone number, including area code   (203) 975-1100


(Former name,former address and former fiscal year, if changed since last year)

    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 the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.

             Class                          Outstanding at February 11, 2000
Common stock, par value $.007 per share            15,176,986 shares



                                        1

<PAGE>








                     WARRANTECH CORPORATION AND SUBSIDIARIES


                                    I N D E X

<TABLE>
<S>                                                                                            <C>


                                                                                                        Page No.
PART I  -  Financial Information:


              Item 1.  Financial Statements

                Condensed Consolidated Balance Sheets at December 31, 1999
                (Unaudited) and March 31, 1999...................................................             3


                Condensed Consolidated Statements of Operations
                   For the Three and Nine Months Ended December 31, 1999
                   and 1998 (Unaudited) .........................................................             4

                 Condensed Consolidated Statements of Cash Flows
                   For the Nine Months Ended December 31, 1999
                          and 1998 (Unaudited)...................................................             5


                 Notes to Condensed Consolidated Financial Statements ...........................             6

                   Item 2.  Management's Discussion and Analysis of
                           Financial Condition and Results of Operations ........................            10



PART II  - Other Information.....................................................................            13

Signatures ......................................................................................            15


</TABLE>


                                        2

<PAGE>

                     WARRANTECH CORPORATION AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS


<TABLE>
<S>                                                                      <C>                      <C>

                                                     AS S E T S
                                                                                 (unaudited)
                                                                                 December 31,          March 31,
                                                                             -------------------- --------------------
                                                                                     1999                 1999
                                                                             -------------------- --------------------
Current assets:
Cash and cash equivalents                                                             $9,601,744          $15,032,473

Investments in marketable securities                                                   3,446,994            2,961,602

Accounts receivable (net of allowances of
 $1,201,357 and $1,115,285, respectively)                                             19,469,625           39,275,404

Other receivables, net                                                                 2,795,371            5,924,332
Income tax receivable                                                                  3,962,405            1,147,324
Deferred income taxes                                                                  1,123,776            1,419,854
Prepaid expenses and other current assets                                              1,632,130            1,537,633
                                                                             -------------------- --------------------
   Total current assets                                                               42,032,045           67,298,622


Property and equipment, net                                                           16,387,549           16,277,473

Other assets:
Excess of cost over fair value of assets acquired
(net of accumulated amortization of $5,383,648
and  $4,212,956 respectively)                                                          2,774,885            3,276,524
Deferred income taxes                                                                  9,689,436            9,603,277
Deferred Direct Costs                                                                 86,041,468           86,107,696
Investments in marketable securities                                                   1,602,803            1,321,019
Restricted cash                                                                          800,000              800,000
Split dollar life insurance policies                                                   1,435,756            1,370,010
Notes receivable                                                                       1,507,733              477,767
Collateral security fund                                                                 199,389              199,389
Other assets                                                                             165,151              178,493
                                                                             -------------------- --------------------
          Total other assets                                                         104,216,621          103,334,175


                                                                             -------------------- --------------------
                    Total Assets                                                    $162,636,215         $186,910,270
                                                                             ==================== ====================


                                        LIABILITIES AND STOCKHOLDERS' EQUITY
                                                                                  (unaudited)
                                                                                 December 31,          March 31,
                                                                             -------------------- --------------------
                                                                                     1999                 1999
                                                                             -------------------- --------------------
Current liabilities:
Current maturities of long-term debt and capital lease obligations                    $1,415,678           $1,558,447
Insurance premiums payable                                                            23,809,449           36,585,920
Accounts and commissions payable                                                       9,087,705            8,524,040
Legal settlements payable                                                             -                       100,000
Accrued expenses and other current liabilities                                         7,337,538            8,346,440
                                                                             -------------------- --------------------
   Total current liabilities                                                          41,650,370           55,114,847

Deferred revenues                                                                    116,402,565          118,497,564

Long-term debt and capital lease obligations                                           1,927,869            2,420,967

Deferred rent payable                                                                    392,404              476,890
                                                                             -------------------- --------------------
   Total liabilities                                                                 160,373,208          176,510,268

Commitments and contingencies


Stockholders' equity:
   Preferred stock - $.0007 par value authorized - 15,000,000
     issued  - none at December 31, 1999 and March 31, 1999
   Common stock - $.007 par value: authorized - 30,000,000
    Shares  issued;  - 16,505,911  shares at December 31,1999
     and 16,501,786 shares at March 31, 1999                                             115,541              115,513
   Additional paid-in capital                                                         23,737,835           23,728,881
   Loans to directors and officers                                                   (9,408,052)          (9,006,699)
   Accumulated  other comprehensive income, net of taxes                               (132,418)             (93,534)
   Retained earnings                                                                 (7,563,395)              105,154
                                                                             -------------------- --------------------
                                                                                       6,749,511           14,849,315
Treasury stock - at cost, 1,330,300 shares at December 31, 1999 and
1,280,300 shares at March 31, 1999                                                   (4,486,504)          (4,449,313)
                                                                             -------------------- --------------------
        Total Stockholders' Equity                                                     2,263,007           10,400,002

                                                                             -------------------- --------------------
        Total Liabilities and Stockholders' Equity                                  $162,636,215         $186,910,270
                                                                             ==================== ====================

See accompanying notes to condensed consolidated financial statements.

</TABLE>

                                        3

<PAGE>

                                  WARRANTECH CORPORATION AND SUBSIDIARIES
                              CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                                (Unaudited)


<TABLE>
<S>                                               <C>              <C>              <C>               <C>

                                                      For the Three Months Ended        For the Nine Months Ended
                                                             December 31,                      December 31,
                                                  ---------------- ---------------- ----------------- ---------------
                                                        1999             1998             1999             1998
                                                  ---------------- ---------------- ----------------- ---------------
Gross revenues                                        $26,830,325      $37,865,775       $78,864,182    $108,529,304
Net decrease(increase) in deferred revenues             3,914,525      (7,593,094)         2,112,273    (22,592,813)
                                                  ---------------- ---------------- ----------------- ---------------
Net revenues                                           30,744,850       30,272,681        80,976,455      85,936,491

Costs and expenses:
   Direct costs                                        20,028,836       16,994,480        50,697,253      48,108,692
   Service, selling, and general and administrative    11,311,378       13,756,606        36,869,128      41,169,354
   Depreciation and amortization                        1,504,709        1,336,174         4,375,387       3,747,815
                                                  ---------------- ---------------- ----------------- ---------------
Total costs and expenses                               32,844,923       32,087,260        91,941,768      93,025,861

                                                  ---------------- ---------------- ----------------- ---------------
(Loss) from operations                                (2,100,073)      (1,814,579)      (10,965,313)     (7,089,370)

Other income                                              275,742          311,217           786,189         828,438
                                                  ---------------- ---------------- ----------------- ---------------

(Loss) before benefit for income taxes                (1,824,331)      (1,503,362)      (10,179,124)     (6,260,932)
(Benefit) for income taxes                              (172,119)        (263,838)       (2,510,575)     (2,150,327)
                                                  ---------------- ---------------- ----------------- ---------------

Net (loss)                                           ($1,652,212)     ($1,239,524)      ($7,668,549)    ($4,110,605)
                                                  ================ ================ ================= ===============

Earnings per share:
Basic                                                     ($0.11)          ($0.08)           ($0.50)         ($0.27)
                                                  ================ ================ ================= ===============
Diluted                                                   ($0.11)          ($0.08)           ($0.50)         ($0.27)
                                                  ================ ================ ================= ===============

Weighted average number of shares outstanding:
Basic                                                  15,196,263       15,520,411        15,214,422      14,981,328
                                                  ================ ================ ================= ===============
Diluted                                                15,196,263       15,520,411        15,214,422      14,981,328
                                                  ================ ================ ================= ===============


</TABLE>

See accompanying notes to condensed consolidated financial statements.


                                        4

<PAGE>


                     WARRANTECH CORPORATION AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)

<TABLE>
<S>                                                              <C>                <C>

                                                                        For the Nine Months Ended
                                                                               December 31,
                                                                  -----------------  ------------------
                                                                        1999                1998

Cash flows from (used in) operating activities                            $925,322       ($10,166,006)
                                                                  -----------------  ------------------
Cash flows from investing activities:
   Property and equipment purchased                                    (3,280,179)         (3,813,415)
   Purchase of marketable securities                                   (3,600,000)         (2,205,420)
   Proceeds from sales of marketable securities                          2,835,000             542,586

                                                                  -----------------  ------------------
Net cash (used in) investing activities                                (4,045,179)         (5,476,249)
                                                                  -----------------  ------------------
Cash flows from financing activities:
    (Increase) decrease in notes receivable                            (1,029,966)             110,219
    Exercise of common stock options and stock grants                        8,982             268,733
    Issue treasury stock                                                  (37,191)           -
    Purchase treasury stock                                               -                (3,126,743)
    Repayments, notes and capital leases                               (1,252,697)         (1,839,694)
                                                                  -----------------  ------------------
Net cash (used in) financing activities                                (2,310,872)         (4,587,485)
                                                                  -----------------  ------------------

Net increase (decrease) in cash and cash equivalents                   (5,430,729)        (20,229,740)

Cash and cash equivalents at beginning of period                        15,032,473          24,062,052
                                                                  -----------------  ------------------
Cash and cash equivalents at end of period                              $9,601,744          $3,832,312
                                                                  =================  ==================


Supplemental Cash Flow Information:
Cash payments for:
   Interest                                                               $276,663            $346,967
                                                                  =================
                                                                                     ==================
   Income taxes                                                            $95,238          $1,033,436
                                                                  =================  ==================

Non-Cash Investing and financing activities:
    Property and equipment financed through capital leases                $616,830          $1,348,614
    Exercise of restricted common stock options                           -                  9,335,588
    Increase in loans to officers and directors                          (401,353)         (8,291,784)


</TABLE>

See accompanying notes to condensed consolidated financial statements.


                                                5

<PAGE>


                     WARRANTECH CORPORATION AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                                December 31, 1999
                                   (Unaudited)

1.  THE COMPANY

Warrantech,  through its wholly  owned  subsidiaries,  markets  and  administers
service  contracts  and  extended  warranties.  The  Company  is a  third  party
administrator for a variety of dealer/clients in selected  industries and offers
call center and technical computer services.  The Company assists dealer/clients
in  obtaining  insurance  policies  from  highly  rated  independent   insurance
companies for all contracts and programs offered.  The insurance company is then
responsible  for  the  cost  of  repairs  or  replacements   for  the  contracts
administered by Warrantech.

The Company operates under three major business segments:  Automotive,  Consumer
Products and  International.  The  Automotive  segment  markets and  administers
extended  warranties on  automobiles,  light trucks,  recreational  vehicles and
automotive  components.  These  products are sold  principally by franchised and
independent  automobile dealers,  leasing companies,  repair facilities,  retail
stores and financial  institutions.  The Consumer  Products  segment markets and
administers extended warranties on household appliances,  electronics and homes.
These  products  include home  appliances,  consumer  electronics,  televisions,
computers,  home office equipment and homes. These products are sold principally
by  retailers,  distributors,  manufacturers,  utility  companies  and financial
institutions.  Warrantech  also direct  markets  these  products to the ultimate
consumer  through  telemarketing  and direct mail campaigns.  The  International
segment markets and administers outside the United States predominately the same
products and services of the other business segments.  The International segment
is currently operating in the United Kingdom,  Central and South America, Puerto
Rico and the Caribbean.

The predominant  terms of the service  contracts and extended  warranties  range
from twelve (12) to eighty-four  (84) months.  The Company acts as a third party
administrator  on behalf of the  dealer/clients  and  insurance  companies.  The
actual repairs and replacements  required under the service contract  agreements
are performed by independent third party authorized repair facilities.  The cost
of these  repairs is borne by the  insurance  companies  which have the ultimate
responsibility   for  the  claims.   The  insurance   policy   indemnifies   the
dealer/clients  against  losses  resulting  from  service  contract  claims  and
protects the consumer by ensuring their claims will be paid.

The Company's  service contract  programs benefit consumers with expanded and/or
extended  product coverage for a specified period of time (and/or mileage in the
case of  automobiles  and  recreational  vehicles),  similar to that provided by
manufacturers  under  the  terms  of their  product  warranties.  Such  coverage
generally provides for the repair or replacement of the product,  or a component
thereof,  in the event of its failure.  The Company's  service contract programs
benefit the dealer/clients by providing enhanced value to the goods and services
they offer. It also provides the  opportunity  for increased  revenue and income
while  outsourcing  the costs and  responsibilities  of  operating  an  extended
warranty program.

2.  BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial  information and with the  instructions to Form 10-Q and Article 10 of
Regulation S-X.  Accordingly,  they do not include all information and footnotes
required by generally  accepted  accounting  principles  for complete  financial
statements. In the opinion of management,  all adjustments (consisting of normal
recurring  accruals)  considered  necessary  for a fair  presentation  have been
included.  Operating  results for the three and nine Months  ended  December 31,
1999 are not necessarily  indicative of the results that may be expected for the
year ending March 31, 2000. For further  information,  refer to the consolidated
financial  statements and footnotes thereto included in the Company's Form 10K/A
for the year ended March 31, 1999.

Certain prior year amounts may have been reclassified to conform to current year
presentation.


                                        6

<PAGE>

Revenue  Recognition  Policy  - The  Company's  revenue  recognition  policy  is
segregated into two distinct categories  depending on whether the Company or the
retailer/dealer  is designated as the obligor on the service  contract  sale. In
either case, a highly rated  independent  insurance  company  assumes all claims
liabilities of the service contracts administered by the Company.

Dealer  obligor  service  contracts  are sales in which the  retailer/dealer  is
designated  as  the  obligor.  For  these  service  contract  sales,  using  the
proportional  performance  method,  the  Company  recognizes  revenues in direct
proportion to the costs incurred in providing the service  contract  programs to
the  Company's   clients.   Revenues  in  amounts   sufficient  to  meet  future
administrative  costs and a reasonable gross profit thereon are deferred.  Sales
of dealer  obligor  service  contracts  are  reflected in gross  revenues net of
premiums  paid to  insurance  companies  as well as  related  sales  commissions
associated with the contracts.

Administrator  obligor  service  contracts  are  sales  in which  Warrantech  is
designated  as the  obligor.  For these  service  contract  sales,  the  Company
recognizes  revenues in accordance  with Financial  Accounting  Standards  Board
Technical  Bulletin 90-1 ("TB 90-1"),  Accounting for Separately Priced Extended
Warranty  and  Product  Maintenance   Contracts,   and  Statement  of  Financial
Accounting  Standards No. 60 ("SFAS 60"),  Accounting and Reporting by Insurance
Enterprises.  These accounting standards require the recognition of revenue over
the  life  of  the  contract  on  a  straight-line   basis,  unless  sufficient,
company-specific,  historical  evidence  indicates  that the costs of performing
services under these contracts are incurred on other than a straight-line basis.
The Company is recognizing revenue on administrative  obligor contracts based on
company specific historical claims experience over the life of the contract.



3. COMPREHENSIVE INCOME

The components of comprehensive income are as follows:

<TABLE>
<S>                                                        <C>                 <C>                <C>                <C>

                                                                   For the Three Months Ended          For the Nine Months Ended

                                                                          December 31,                        December 31,
                                                            ------------------------------------   ---------------------------------
                                                                  1999               1998                1999              1998
                                                            ------------------------------------   ---------------------------------
              Net (loss)                                        ($1,652,212)       ($1,239,524)       ($7,668,549)      ($4,110,605)
              Other Comprehensive Income, net of tax
                 Foreign currency translation adjustments           (40,825)          (100,464)            (7,394)         (107,860)
                 Unrealized gain(loss) on investments               (11,939)                643           (31,490)           (1,912)
                                                            -----------------  -----------------   ----------------  ---------------
              Comprehensive Income (loss)                       ($1,704,976)       ($1,339,345)       ($7,707,433)      ($4,220,377)
                                                            =================  =================   ================  ===============

              The components of accumulated other comprehensive income, net of related tax, are as follows

                                                              December 31,         March 31,
                                                                  1999               1999
                                                            ------------------------------------
              Accumulated translation adjustments                 ($108,380)         ($100,986)
              Unrealized gain/(loss) on investments                 (24,038)              7,452
                                                            -----------------  -----------------
              Accumulated other comprehensive income              ($132,418)          ($93,534)
                                                            =================  =================


                                                7

<PAGE>

4.  EARNINGS PER SHARE

         The computation of earnings per share was as follows:

                                                                For the Three Months Ended           For the Nine Months Ended
                                                                         December 31,                       December 31,
                                                                            ----              -----              ----
                                                            -----------------  ----------------  -----------------  ---------------
                                                                  1999               1998              1999              1998
                                                            -----------------  ----------------  -----------------  ---------------
              Numerator:
                 Net (loss) applicable to common stock          ($1,652,212)      ($1,239,524)       ($7,668,549)     ($4,110,605)
                                                            =================  ================  =================  ===============
              Denominator:
                  Average outstanding shares used in the
                  computation of per share earnings:
                    Common Stock issued-Basic shares              15,196,263        15,520,411         15,214,422       14,981,328
                    Stock Options (treasury method)                 -                 -                  -                 -
                                                            -----------------  ----------------  -----------------  ---------------
                    Diluted shares                                15,196,263        15,520,411         15,214,422       14,981,328
                                                            =================  ================  =================  ===============
              Earnings Per Common Share:
                 Basic                                               ($0.11)           ($0.08)            ($0.50)          ($0.27)
                                                            =================  ================  =================  ===============
                 Diluted                                             ($0.11)           ($0.08)            ($0.50)          ($0.27)
                                                            =================  ================  =================  ===============

</TABLE>


In a net loss position options are anti-dilutive.

5.   SEGMENTS

The Company  defines its operations  into three business  segments:  Automotive,
Consumer  Products and  International  operations.  All Other  includes  general
corporate  income  and  expenses,  inter-segment  sales and  expenses  and other
corporate assets not related to the three business segments.

<TABLE>
<S>                              <C>           <C>           <C>            <C>            <C>          <C>

                                                 Consumer                    Reportable        All
Three Months Ended               Automotive      Products    International    Segments        Other         Total
December 31, 1999
Revenues                          $10,483,139   $12,862,372     $3,580,484   $26,925,995      ($95,670)    $26,830,325
Pretax Income (Loss)                (627,999)       629,235    (2,632,118)   (2,630,882)        806,551    (1,824,331)
Net Interest Income                    12,782        31,179          (162)        43,799        291,418        335,217
Depreciation/Amortization             183,593       409,495        230,614       823,702        681,007      1,504,709

December 31, 1998
Revenues                          $10,139,724   $25,144,519     $4,645,930   $39,930,173   ($2,064,398)    $37,865,775
Pretax Income (Loss)                (938,716)     (273,686)       (39,173)   (1,251,575)      (251,787)    (1,503,362)
Net Interest Income                    17,154        54,120         19,548        90,822        202,217        293,039
Depreciation/Amortization             178,582       300,207        216,225       695,014        641,160      1,336,174

                                                 Consumer                    Reportable        All
Nine Months Ended                Automotive      Products    International    Segments        Other         Total
December 31, 1999
Revenues                          $32,879,659   $38,251,062     $8,955,869   $80,086,590   ($1,222,408)    $78,864,182
Pretax Income (Loss)              (1,611,456)   (5,092,023)    (4,792,653)  (11,496,132)      1,317,008   (10,179,124)
Net Interest Income                    31,259        54,492            338        86,089        717,812        803,901
Depreciation/Amortization             553,858     1,139,977        668,499     2,362,334      2,013,053      4,375,387

December 31, 1998
Revenues                          $35,964,480   $66,033,507    $12,301,317  $114,299,304   ($5,770,000)   $108,529,304
Pretax Income (Loss)              (1,095,238)   (5,014,221)      (362,267)   (6,471,726)        210,794    (6,260,932)
Net Interest Income                    33,301       102,252         91,287       226,840        508,482        735,322
Depreciation/Amortization             539,491       918,710        450,670     1,908,871      1,838,944      3,747,815

</TABLE>

                                        8

<PAGE>


6. SIGNIFICANT CUSTOMERS

The  Company  had  one  significant  customer,   CompUSA,  which  accounted  for
approximately 34%, 34% and 32%, respectively, of consolidated gross revenues for
the years ended March 31, 1999, 1998 and 1997. The Company  notified  CompUSA in
May 1999 of price increases  resulting from premium  increases  imposed by CIGNA
Insurance Company. On June 28, 1999,  Warrantech received formal notification of
termination  from CompUSA  effective  July 28, 1999. The loss of CompUSA had and
will have a significant impact on current and future revenues.


                                                9
<PAGE>


                     WARRANTECH CORPORATION AND SUBSIDIARIES

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

Except for the historical  information  contained herein,  the matters discussed
below or elsewhere in this quarterly report are forward looking  statements that
involve  risks  and  uncertainties.   The  Company  makes  such  forward-looking
statements  under the  provisions  of the "safe  harbor"  section of the Private
Securities Litigation Reform Act of 1995.  Forward-looking  statements are based
on  management's  beliefs  and  assumptions,  as well as  information  currently
available to management.  Such beliefs and assumptions are based on, among other
things, the Company's operating and financial  performance over recent years and
its  expectations  about its business for the current fiscal year.  Although the
Company  believes  that  the  expectations  reflected  in such  forward  looking
statements are reasonable,  it can give no assurance that such expectations will
prove to be correct. Such statements are subject to certain risks, uncertainties
and assumptions,  including (a) prevailing economic conditions may significantly
deteriorate,  thereby  reducing  the  demand  for  the  Company's  products  and
services,  (b) unavailability of technical support personnel or increases in the
rate of  turnover  of such  personnel,  reflecting  increased  demand  for  such
qualified  personnel,  (c)  changes in the terms or  availability  of  insurance
coverage for the Company's programs or (d) regulatory or legal changes affecting
the  Company's  business,  although none of these risks are  anticipated  at the
present  time.  Should one or more of these or any other risks or  uncertainties
materialize,  or should  the  underlying  assumptions  prove  incorrect,  actual
results may vary materially from those anticipated, estimated or expected.

Results of Operations

Three Months Ended December 31, 1999 Compared to the Three Months ended December
31, 1998

Gross  revenues  for the three month period  ended  December 31, 1999  decreased
$11,035,450 or 29.1% to $26,830,325  as compared with  $37,865,775  for the same
period last year.  This decrease is directly  attributable to decreased sales in
the  Consumer  Products and  International  business  segments.  In the Consumer
Products and International  business  segments,  the decrease in revenue for the
three months ended December 31, 1999 occurred from  decreased  sales in computer
related  extended  warranties  as a result of the  termination  of the Company's
relationship  in July 1999 with its most  significant  customer,  CompUSA.  This
decrease was partially  offset by an increase in sales of home warranty  service
contracts.  During  the  fiscal  year  March 31,  1999,  CompUSA  accounted  for
approximately 34% of consolidated gross revenues.

The net decrease in deferred  revenues  for the three months ended  December 31,
1999 was  $3,914,525 as compared with a net increase of $7,593,094  for the same
period last year. This current quarter decrease is directly  attributable to the
sales of service  contracts in the current  period with a service  duration over
one year being less than the  amortization  of revenues  from  previous  periods
being recognized in the current year. The year to year change is also the result
of the  increase  in  deferred  revenue  for dealer  obligor  service  contracts
necessary  to meet  future  administrative  costs to  service  these  contracts.
Lastly,  the net change in  deferred  revenue is  significantly  impacted by the
decreased  revenues  resulting from the  termination of the Company's  agreement
with CompUSA.

Direct costs, which consist primarily of insurance premiums and commissions, are
those  costs  directly  related to the  production  and  acquisition  of service
contracts  where  Warrantech  is  named  as  the  obligor.   Direct  costs  were
$20,028,836  for the three month period ended December 31, 1999 as compared with
$16,994,480  for the  comparable  period last year. The increase in direct costs
are primarily the result of prior period  amortization  costs being greater than
the current  period costs being deferred to future periods offset by the reduced
revenues due to the termination of the Company's  administrative  agreement with
CompUSA.  This  increase  is  also  the  result  of a  premium  increase  in the
Automotive business segment in the current period.

Service,  selling and general and  administrative  expenses (SG&A) for the three
months  ended  December  31,  1999  were  reduced  by  $2,445,228  or  17.8%  to
$11,311,378 as compared to  $13,756,606  for the three months ended December 31,
1998.  The  decrease  in  SG&A  expenses  reflects  the  Company's   operational
efficiency  initiatives  which  include  the  reengineering  of its call  center
process and  consolidation of certain  operating and  administrative  functions.
These  initiatives  resulted  in lower  payroll and  payroll  related  expenses,
telephone and other miscellaneous operating costs.


                                10

<PAGE>

Depreciation and amortization was $1,504,709 for the three months ended December
31, 1999 compared to  $1,336,174  for the same period last year due primarily to
capital  additions  related to the  Company's  ongoing  upgrade of its  computer
systems.

The provision (benefit) for income taxes is based on the Company's projection of
its estimated effective tax rate for the fiscal year.

Net loss for the three months ended  December 31, 1999 was  $1,652,212  or $0.11
per  diluted  share  compared to a net loss of  $1,239,524  or $0.08 per diluted
share for the comparable  period last year.  This change is the result of losses
incurred  in  the  International  segment,  the  termination  of  the  Company's
relationship with its most significant  customer during the period and the other
factors listed above.

Nine Months Ended  December 31, 1999 Compared to the Nine Months ended  December
31, 1998

Gross revenues for the nine months ended December 31, 1999 decreased $29,665,122
or 27.3% to $78,864,182 as compared with  $108,529,304  for the same period last
year.  This  decrease  is  directly  attributable  to  decreased  revenue in the
Automotive,  Consumer  Products  and  International  business  segments.  In the
Automotive segment,  the decrease in revenue was primarily the result of a sales
mix change  created by an increase in dealer  obligor  business and a decline in
the Company's  private label business  resulting from the  termination of a high
volume/low margin account.  In the Consumer Products and International  business
segments,  the decrease in revenue for the nine months  ended  December 31, 1999
occurred primarily from decreased sales in computer related extended  warranties
as a result  of the  termination  of the  Company's  relationship  with its most
significant customer, CompUSA. This decrease was partially offset by an increase
in sales of home warranty  service  contracts.  During the fiscal year March 31,
1999, CompUSA accounted for approximately 34% of consolidated gross revenues.

The net decrease in deferred  revenues  for the nine months  ended  December 31,
1999 was $2,112,273 as compared with a net increase of $22,592,813  for the same
period last year.  These  decreases  are directly  attributable  to the sales of
service  contracts in the current  period with a service  duration over one year
being  less than the  amortization  of  revenues  from  previous  periods  being
recognized  in the current  year.  The year to year change is also the result of
the increase in deferred revenue for dealer obligor service contracts  necessary
to meet future administrative costs to service these contracts.  Lastly, the net
change in deferred revenue is significantly  impacted by the decreased  revenues
resulting from the termination of the Company's agreement with CompUSA.

Direct costs, which consist primarily of insurance premiums and commissions, are
those  costs  directly  related to the  production  and  acquisition  of service
contracts  where  Warrantech  is  named  as  the  obligor.   Direct  costs  were
$50,697,253  for the nine months  ended  December  31,  1999,  as compared  with
$48,108,692  for the nine months ended December 31, 1998. The increase in direct
costs are primarily the result of prior period  amortization costs being greater
than the current  period costs being  deferred to future  periods  offset by the
reduced  revenues  due  to  the  termination  of  the  Company's  administrative
agreement with CompUSA.  This increase is also the result of a premium  increase
in the Automotive business segment in the current period.

Service,  selling and general and  administrative  expenses  (SG&A) for the nine
months  ended  December  31,  1999  were  reduced  by  $4,300,226  or  10.4%  to
$36,869,128,  compared to  $41,169,354  for the nine months  ended  December 31,
1998.  The  decrease  in  SG&A  expenses  reflects  the  Company's   operational
efficiency  initiatives  which  included  the  reengineering  of its call center
process and  consolidation of certain  operating and  administrative  functions.
These  initiatives  resulted in lower payroll and payroll  related  expenses and
other miscellaneous operating costs.

Depreciation  and amortization was $4,375,387 for the nine months ended December
31, 1999 compared to $3,747,815  for the same period last year  primarily as the
result of capital  additions  related to the  Company's  ongoing  upgrade of its
computer systems.

The provision (benefit) for income taxes is based on the Company's projection of
its estimated effective tax rate for the fiscal year.


                                                11

<PAGE>

Net loss for the nine months ended December 31, 1999 was $7,668,549 or $0.50 per
diluted  share  compared to a net loss of  $4,110,605 or $0.27 per diluted share
for the  comparable  period  last  year.  This  change  is the  result of losses
incurred  in  the  International  segment,  the  termination  of  the  Company's
relationship with its most significant  customer during the period and the other
factors listed above.

Liquidity and Financial Resources

The Company has ongoing  relationships  with equipment  financing  companies and
intends to continue  financing  certain future  equipment  needs through leasing
transactions.  In addition,  the Company had a revolving credit agreement with a
bank which originally provided for maximum aggregate borrowings up to $1,500,000
with interest at the bank's  prevailing prime rate or LIBOR plus 2% that expired
on December 31, 1999. The Company is presently in  negotiations  to replace this
line of credit.  Although it is anticipated that this will be completed by March
2000,  no  assurances  can be given this will be  accomplished.  During the nine
months  ended  December  31, 1999 and the fiscal  years ended March 31, 1998 and
1999 the Company did not have any borrowings under this line of credit.

Cash provided by operating  activities during the nine months ended December 31,
1999 was $.9 million as compared to cash used by operating  activities  of $10.2
million  during 1998.  For the nine months ended  December 31, 1999 and December
31, 1998,  these amounts were not sufficient for the Company to fund its regular
operating needs primarily as a result of capital expenditures and the repayments
on capital  leases  which  amounted to $1.3  million in 1999 and $1.8 million in
1998. The Company has now substantially completed its investment in information
and telecommunications technology. Capital spending is continuously reviewed and
subject to change,  however the Company does not expect to continue these levels
of expenditures.

Cash flow from current operations and its equipment  financing  arrangements are
expected to be sufficient to meet its foreseeable liquidity and capital resource
needs.

On July 6, 1998,  Joel San Antonio,  Warrantech's  Chairman and Chief  Executive
Officer,  and William Tweed and Jeff J. White, members of the Warrantech's Board
of Directors, exercised 3,000,000 of their vested options to purchase Warrantech
common stock.  Promissory  notes totaling  $8,062,500  were signed with interest
payable over three years at an annual interest rate of 6%. The promissory notes,
which are with  recourse and secured by the stock  certificates  issued,  mature
July 5, 2001. An additional  promissory  note was signed by Joel San Antonio for
$595,634 on March 22, 1999 which  represents  the amounts  funded by the Company
with  respect to his  payroll  taxes for the  exercise of these  options.  These
amounts have been recorded as a contra-equity  account,  which is a reduction of
stockholders'  equity.  The Company is currently in discussions with the Messrs.
San Antonio,  Tweed and White to renegotiate the payment terms of the notes. The
payment of  interest,  which was due July 6,  1999,  has been  deferred  pending
finalization of such discussions.

The  effect of  inflation  has not been  significant  to the  Company  since its
formation.

Year 2000

The Company has addressed the business,  financial,  technical,  legal and other
implications  related to the various Year 2000 date issues. A comprehensive Year
2000 program was put into place during fiscal 1998 and executed through December
31, 1999. The primary goal of the Year 2000 program was to implement the changes
needed  to  answer  functionality  in the Year  2000,  as cost  effectively  and
expeditiously as possible.  As of February 11, 2000, the Company  experienced no
significant interruptions from any computer hardware, software or other business
operations.


                                                12

<PAGE>

PART II. Other Information

Item 1.       Legal Proceedings

     Effective  with the  business  written  August 1,  1999,  Warrantech  began
     placing its automotive  service contract  business with Reliance  Insurance
     Company. On December 18, 1999, American  International Group (AIG), who was
     the   previous   insurance   carrier  for  the   Automotive   business  for
     substantially  all contracts sold from March 1, 1993 through July 31, 1999,
     assumed the administration of these service contracts.

     On December 9, 1999, a complaint and order to show cause were filed against
     Warrantech  in the Supreme  Court of the State of New York by American Home
     Assurance  Company,  Illinois National  Insurance  Company,  National Union
     Insurance  Company of Louisiana  and The New  Hampshire  Insurance  Company
     (collectively, "AIG") in which AIG sought to inspect and copy certain books
     and records kept by  Warrantech  in the course of the business it conducted
     under a General  Agency  Agreement  ("GAA") with AIG. On December 14, 1999,
     this action was removed by Warrantech to the United States  District  Court
     for the Southern  District of New York.  American Home Assurance Co. et al,
     v. Warrantech Automotive, Inc., 99 Civ. 12040 (BSJ). At a December 16, 1999
     hearing, Warrantech agreed to make the books and records at issue available
     to AIG for  copying.  On  January  24,  2000 AIG made a motion to amend its
     complaint  to add claims for replevin and a  declaratory  judgment  seeking
     possession  of the originals of the books and records and to add claims for
     breach  of  contract,  breach  of  fiduciary  duty,  negligence  and  gross
     negligence based on allegations that Warrantech mishandled claims under the
     GAA. AIG seeks damages in excess of $20 million. AIG also moved for summary
     judgment  on its  claims  seeking  possession  of the  books  and  records.
     Warrantech  believes all of these  claims are without  merit and intends to
     defend  them  vigorously.  On  February 7, 2000,  Warrantech  filed  papers
     opposing  AIG's motion to amend its complaint  insofar as it seeks to add a
     claim for replevin and a  declaratory  judgment and opposing its motion for
     summary judgment. Warrantech intends to bring a claim against AIG.

     Service Guard Insurance Agency,  Inc. v. Warrantech  Automotive,  Inc., New
     Hampshire  Insurance Company,  Ronald Glime and Christopher Ford, Cause No.
     99-12650,  pending in the 126th  Judicial  District Court of Travis County,
     Texas.  Service  Guard filed suit  against  Warrantech  Automotive  and New
     Hampshire  Insurance Company on October 28, 1999,  seeking an injunction to
     transfer claims-handling  administration over automobile warranty claims to
     a third-party,  and seeking an unspecified  amount of damages attributed to
     alleged improper claims handling and tortious  interference  with contract.
     Service Guard never pursued its original request for injunctive  relief. On
     January 27, 2000,  Service  Guard  amended its petition to add AIG Warranty
     Services as a defendant,  again seeking to recover an unspecified amount of
     damages from all  defendants.  On February 2, 2000,  Service Guard filed an
     application  for  a  temporary  restraining  order  against  New  Hampshire
     Insurance Company and AIG Warranty Services,  and at a hearing conducted on
     February 8, 2000, the Court ordered Service Guard, New Hampshire  Insurance
     Company and AIG Warranty  Services to mediate  within  twenty-one  days the
     disputes  that  form  the  basis  for  the  requested   injunctive  relief.
     Warrantech,  Ford and Glime believe Service Guard's claims against them are
     wholly without merit and intend to vigorously defend against those claims.



                                        13

<PAGE>

Item 2.       Changes in Securities

              Not applicable.

Item 3.       Defaults Upon Senior Securities

              Not applicable.

Item 4.       Submission of Matters to Vote of Security Holders

              Not applicable.

Item 5.       Other Information

              Not applicable.

Item 6 (a)                 Exhibits

 (27)         Financial Data Schedule

Item 6 (b)                 Reports on 8-K

     Report on Form 8-K reporting item 5 dated October 1, 1999 filed October 18,
     1999

     Report on Form 8-K reporting  item 5 dated November 19, 1999 filed November
     23, 1999


                                        14

<PAGE>

                                   SIGNATURES


Pursuant  to the  requirements  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.

                                      WARRANTECH CORPORATION



                                      By:  /s/ Joel San Antonio
                                          ------------------------------------
                                          Joel San Antonio - Chairman of the
                                          Board and Chief Executive Officer
Date:  February 14, 2000



                                       By:  /s/ Richard F. Gavino
                                          ------------------------------------
                                          Richard F. Gavino - Executive Vice
                                          President and Chief Financial Officer

Date:  February 14, 2000




                                        15